UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D. C. 20549

FORM 10-Q

þ QUARTERLY REPORT ~~UNDER~~PURSUANT TO SECTION 13 orOR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

OFFor ~~THE~~the ~~SECURITIES~~quarterly ~~EXCHANGE~~period ~~ACT~~ended OFMay ~~1934~~31, 2013

~~For~~o ~~the~~TRANSITION ~~quarterly~~REPORT ~~period~~PURSUANT ~~ended~~TO ~~November~~SECTION ~~30,~~13 ~~2012~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____.

Commission file number 000-23561

PAN AMERICAN GOLDFIELDS LTD.

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

Delaware		84-1431797
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)

1200 – 570 Granville Street Vancouver, BC	V6C 3P1
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (604) 681-1163

~~Check~~Indicate by check mark whether the ~~issuer~~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 ~~past~~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 þ No o~~

~~Indicate~~ Yes byþ No check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o þ

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

Large accelerated filer o ~~Accelerated~~Non-accelerated filer o ~~Non-accelerated~~Accelerated filer o Smaller reporting company þ

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

As of ~~January~~July 1410, 2013, the registrant had 94100,~~007~~340,~~801~~026 shares of common stock issued and outstanding.

INDEX

PART I — FINANCIAL INFORMATION

Item 1.	Condensed Unaudited Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	32

Item 4.	Controls and Procedures	32

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	33

Item 4.	Mine Safety Disclosures	33

Item 5.	Other Information	33

Item 6.	Exhibits.	33

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PAN AMERICAN GOLDFIELDS LTD.

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Expressed in U.S. Dollars)

~~November~~MAY 3031, ~~2012~~ 2013

PAN AMERICAN GOLDFIELDS LTD.

(An Exploration Stage Company)

Consolidated Balance Sheets

(Expressed in U.S. Dollars)

	November 30 2012 (Unaudited) $			February 29 2012 (Audited) $
	May 31 2013		February 28 2013
Assets
	(Unaudited)		(Audited)
Current
	$		$
Cash and cash equivalents		263,978			117,892
Assets
Accounts receivable		850,576			282,683
Current
Inventory		-			64,202
Cash and cash equivalents	231,071		176,538
Prepaid expenses		36,630			50,686
Accounts receivable	514,456		189,149
Real estate held for sale		1,050,000			-
Prepaid expenses	23,722		25,663
		2,201,184			515,463
Real estate held for sale	640,000		640,000
Equipment (note 4)		26,657			166,204
	1,409,249		1,031,350
Total assets		2,227,841			681,667
Equipment (note 4)	23,404		25,033
Liabilities
Total assets	1,432,653		1,056,383
Current
Liabilities
Accounts payable and accrued liabilities		1,088,364			1,358,302
Current
Loans payable (note 8)		25,247			12,887
Accounts payable and accrued liabilities	1,288,816		976,934
Total liabilities		1,113,611			1,371,189
Loans payable (note 7)	3,557		10,867
Stockholders’ equity (deficiency)
Total liabilities	1,292,373		987,801
Capital stock
Stockholders’ equity (deficiency)
Preferred stock
Capital stock
Authorized: 20,000,000 shares without par value (note 9)
Preferred stock
Issued: nil
Authorized: 20,000,000 shares, $0.01 par value (note 8)
Common stock
Issued: nil
Authorized: 200,000,000 shares without par value
Common stock
Issued: 94,007,801 (2012 – 71,192,397) (note 10)		37,000,359			34,232,125
Authorized: 200,000,000 shares, $0.01 par value
Additional paid-in capital		16,355,680			15,986,080
Issued: 96,507,801 (2013 – 94,507,801) (note 9)	965,078		945,078
Stock subscriptions		299,904			557,238
Additional paid-in capital	52,848,181		52,567,111
Accumulated deficit from prior operations		(2,003,427	)		(2,003,427	)
Stock subscriptions	299,904		299,904
Accumulated deficit during the exploration stage		(50,771,592	)		(49,701,810	)
Accumulated deficit from prior operations	(2,003,427)		(2,003,427)
Accumulated other comprehensive income		233,306			240,272
Accumulated deficit during the exploration stage	(52,187,178)		(51,962,796)
Total stockholders’ equity (deficiency)		1,114,230			(689,522	)
Accumulated other comprehensive income	217,722		222,712
Total liabilities and stockholders’ equity (deficiency)		2,227,841			681,667
Total stockholders’ equity (deficiency)	140,280		68,582
Total liabilities and stockholders’ equity (deficiency)	1,432,653		1,056,383

Going-concern (note 3)

Commitments (notes 6 and 1211)

Subsequent events (note 1514)

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

PAN AMERICAN GOLDFIELDS LTD.

(An Exploration Stage Company)

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Expressed in U.S. Dollars)

(Unaudited)

		Three Months Ended November 30							Nine Months Ended November 30						Period From March 1, 2004 (Inception of Exploration Stage) to November 30
		Three Months Ended May 31				Period From March 1, 2004 (Inception of Exploration Stage) to May 31
		2012				2011			2012			2011			2012
		2013		2012		2013
Net sales	$	$1,848,686	~~878,023~~$	1,053,354	$	$10,492,981	~~687,211~~		$	~~3,889,753~~		$	~~1,482,242~~		$	~~7,675,198~~
Cost of goods sold		712,484	~~334,178~~	323,602		4,279,074	~~248,857~~			~~1,259,416~~			~~570,106~~			~~2,944,791~~
Gross margin		1,136,202	~~543,845~~	729,752		6,213,907	~~438,354~~			~~2,630,337~~			~~912,136~~			~~4,730,407~~
Expenses
General and administrative		1,102,809	~~696,795~~	825,715		27,832,446	~~689,745~~			~~2,377,089~~			~~2,482,427~~			~~25,593,248~~
Mineral exploration (note 6)		287,975	~~316,528~~	644,940		12,038,226	~~217,254~~			~~1,326,403~~			~~337,007~~			~~11,458,258~~
Impairment of mineral property costs		90,000	~~90,000~~	160,000		18,840,059	~~643,151~~			~~400,000~~			~~844,977~~			~~18,660,059~~
Operating loss		(344,582)	~~(559,478~~	(900,903)		(52,496,824)	~~(1,111,796~~	)		~~(1,473,155~~	)		~~(2,752,275~~	)		~~(50,981,158~~	)
Other income (expenses)
Deposit on equipment written off		-	-	-		(25,300)	-			-			-			~~(25,300~~	)
Foreign exchange			7,661				(130,908	)		3,713			(270,250	)		(586,136	)
Real estate impairment		-		-		(60,000)
Interest expense			(1,732	)			1,571			(9,046	)		(41,051	)		(5,364,352	)
Foreign exchange (loss)		(14,274)		(17,933)		(606,244)
Other income			150,123				61,307			419,095			73,282			838,411
Interest		(6,656)		(6,493)		(5,374,602)
Gain on disposal of assets			-				-			-			-			15,130
Other income		181,198		242,056		1,122,195
Gain on sale of assets			-				-			31,691			-			4,420,065
Gain on disposal of assets		-		-		15,130
Gain (loss) on settlement of debt			166,656				712,494			(42,080	)		937,159			911,748
Gain (loss) on sale of assets		-		32,143		4,400,065
Net loss			(236,770	)			(467,332	)		(1,069,782	)		(2,053,135	)		(50,771,592	)
Gain (loss) on settlement of debt		(40,068)		(50,616)		838,402
Accumulated deficit, beginning			(50,534,822	)			(47,879,726	)		(49,701,810	)		(46,293,923	)		-
Net loss		(224,382)		(701,746)		(52,187,178)
Accumulated deficit, ending		$	(50,771,592	)		$	(48,347,058	)	$	(50,771,592	)	$	(48,347,058	)	$	(50,771,592	)
Other comprehensive income (loss)
Other comprehensive income
Foreign exchange translation adjustment		(4,990)		(41,874)		217,722
Foreign exchange gain (loss) on translation		$	17,550			$	57,408		$	(6,966	)	$	87,785		$	233,306
Total comprehensive loss	$	(229,372)	$	(743,620)	$	(51,969,456)
Total comprehensive loss		$	(219,220	)		$	(409,924	)	$	(1,076,748	)	$	(1,965,350	)	$	(50,538,286	)
Total loss per share – basic and diluted		(0.00)		(0.01)
Total loss per share – basic and diluted		$	(0.00	)		$	(0.01	)	$	(0.01	)	$	(0.03	)
Weighted average number of shares of common stock – basic and diluted		95,268,671		71,439,584
Weighted average number of shares of common stock – basic and diluted			93,555,420				62,822,951			82,017,733			60,863,756

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

PAN AMERICAN GOLDFIELDS LTD.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Expressed in U.S. Dollars)

(Unaudited)

		Nine Months Ended November 30							Period from March 1, 2011 (Inception of Exploration Stage) to November 30
		Three Months Ended May 31				Period from March 1, 2004 (Inception of Exploration Stage) to May 31
		2012				2011			2012
		2013		2012		2013
Cash flows from operating activities
Operating activities
Net loss	$	$(224,382)	~~(1,069,782~~$	(701,746)	$	$(52,187,178)	~~(2,053,135~~	)	$	~~(50,771,592~~	)
Adjustments to reconcile net (loss) to net cash flows:
Write off of note receivable		-	-	-		57,500	-			~~57,500~~
Impairment of mineral property costs		-	-	-		14,421,668	~~776,668~~			~~14,421,668~~
Issuance of shares for consulting services			-				-			510,590
Real estate impairment		-		-		60,000
Issuance of shares for interest costs			-				-			82,500
Issuance of shares for consulting services		-		-		510,590
Discount on convertible debenture			-				-			569,549
Issuance of shares for interest costs		-		-		82,500
Deposit on equipment written off			-				-			25,300
Discount on convertible debenture		-		-		569,549
Gain on disposal of assets			-				-			(15,130	)
Deposit on equipment written off		-		-		25,300
Gain on sale of assets			31,952				-			(4,358,002	)
Gain on disposal of assets		-		-		(15,130)
Non-cash component of gain on settlement of debt			42,080				(937,159	)		(953,563	)
Gain (loss) on sale of assets		-		77,572		(4,357,748)
Beneficial conversion feature			-				-			4,081,091
Non-cash component of loss (gain) on settlement of debt		40,068		50,616		(880,217)
Stock-based compensation			540,000				921,825			12,780,436
Beneficial conversion feature		-		-		4,081,091
Amortization			10,803				31,961			357,106
Stock-based compensation		61,070		258,750		12,997,656
Net change in operating assets and liabilities:
Amortization		1,954		7,017		360,992
Prepaid expense			13,343				(67,125	)		(38,285	)
Net change in operating assets and liabilities:
Accounts receivable			(587,939	)			(276,745	)		(573,382	)
Prepaid expense		2,035		19,164		(25,019)
Inventory			64,202				-			-
Accounts receivable		(333,165)		(386,118)		(317,824)
Customer deposits			-				-			(194,809	)
Inventory		-		64,202		64,202
Notes payable			-				-			109,337
Customer deposits		-		-		(194,809)
Accounts payable and accrued liabilities			49,872				(456,817	)		7,296,948
Notes payable		-		-		109,337
Cash used in operating activities			(905,469	)			(2,060,527	)		(16,612,738	)
Accounts payable and accrued liabilities		271,292		505,554		7,441,100
Investing activities
Cash used in operating activities		(181,128)		(104,989)		(17,196,440)
Sale of equipment			49,650				-			82,966
Investing activities
Purchase of property and equipment			(584	)			-			(604,201	)
Sale of equipment		-		49,650		82,966
Cash provided (used) in investing activities			49,066				-			(521,235	)
Purchase of property and equipment		-		-		(604,201)
Financing activities
Cash used in investing activities		-		49,650		(521,235)
Proceeds from loans payable			32,250				28,550			348,867
Financing activities
Proceeds from notes payable			-				-			3,162,196
Proceeds from loans payable		-		-		348,867
Proceeds from convertible debentures			-				-			7,462,500
Proceeds from notes payable		-		-		3,162,196
Proceeds from exercise of options			-				-			78,000
Proceeds from convertible debentures		-		-		7,462,500
Proceeds from exercise of warrants			-				-			3,144,377
Proceeds from exercise of options		-		-		78,000
Repayment of loans payable			(19,890	)			(19,757	)		(316,739	)
Proceeds from exercise of warrants		-		-		3,144,377
Repayment of notes payable			-				-			(586,620	)
Repayment of loans payable		(7,310)		(6,403)		(338,429)
Repayment of convertible debentures			-				-			(2,051,047	)
Repayment of notes payable		-		-		(586,620)
Stock subscriptions			1,008,600				2,033,672			3,326,862
Repayment of convertible debentures		-		-		(2,051,047)
Issuance of common stock			-				-			2,756,994
Stock subscriptions (net)		240,000		45,000		3,896,862
Cash provided (used) by financing activities			1,020,960				2,042,465			17,325,390
Issuance of common stock (net)		-		-		2,756,994
Net change in cash			164,557				(18,062	)		191,417
Cash provided by financing activities		232,690		38,597		17,873,700
Effect of foreign currency translation on cash			(18,471	)			112,224			50,484
Net change in cash		51,562		(16,742)		156,025
Cash and cash equivalents, beginning			117,892				407,912			22,077
Effect of foreign currency translation on cash		2,971		(26,331)		52,969
Cash and cash equivalents, ending		$	263,978			$	502,074		$	263,978
Cash and cash equivalents, beginning		176,538		117,892		22,077
Cash and cash equivalents, ending	$	231,071	$	74,819	$	231,071

Supplemental cash flow information (note 1413)

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

PAN AMERICAN GOLDFIELDS LTD. (An Exploration Stage Company) Notes to the Consolidated Financial Statements (Unaudited) (Expressed in U.S. Dollars) ~~Nine~~Three Months Ended ~~November~~May 3031, ~~2012~~2013

1.	BASIS OF PRESENTATION

Pan American Goldfields Ltd. (formerly Mexoro Minerals, Ltd and Sunburst Acquisitions IV, Inc.) ("Panam" or the “Company”) was incorporated in the state of Delaware on March 23, 2010 and on July 2, 2010 changed its name to Pan American Goldfields Ltd. pursuant to an agreement and plan of merger between the Company and Mexoro Minerals Ltd. The Company was formed to seek out and acquire business opportunities. Between 1997 and 2003, the Company was engaged in two business acquisitions and one business opportunity, none of which generated a significant profit or created sustainable business. All were sold or discontinued. The Company had previously been pursuing various business opportunities and, effective March 1, 2004, the Company changed its operations to mineral exploration. Currently, the main focus of the Company’s operations is in Mexico ~~and Argentina~~.

On May 25, 2004, the Company completed a “Share Exchange Agreement” with Sierra Minerals and Mining, Inc. (“Sierra Minerals”), a Nevada corporation, which caused Sierra Minerals to become a wholly-owned subsidiary of the Company. Sierra Minerals held certain rights to properties in Mexico that the Company now owns or has an option to acquire. Through Sierra Minerals, the Company entered into a joint venture agreement with Minera Rio Tinto, S.A. de C.V. (“MRT”), a private company duly incorporated pursuant to the laws of Mexico. In August 2005, the Company cancelled the joint venture agreement in order to directly pursue mineral ~~Exploration~~ exploration opportunities through a wholly-owned Mexican subsidiary, Sunburst Mining de Mexico S.A. de C.V. (“Sunburst de Mexico”). On August 25, 2005, the Company, Sunburst de Mexico and MRT entered into agreements providing Sunburst de Mexico the right to explore and exploit certain properties in Mexico. In December 2005, the Company and Sunburst de Mexico entered into a new agreement with MRT (the “New Agreement”) (note 6). On January 20, 2006, Sierra Minerals was dissolved.

InOn February ~~2011~~12, 2009, the Company entered into ana ~~agreement~~joint ~~with~~venture ~~Compañia~~through ~~Minera Alto Rio Salado S.A. (“Compañia Minera”),~~ a ~~private~~definitive ~~Argentine~~agreement ~~entity,~~ for ~~the~~development ~~acquisition~~ of ~~the~~its ~~15,000~~Cieneguita ~~hectares~~project ~~Cerro~~with ~~Delta~~MRT. ~~Project~~The inpurpose ~~northwest~~of Lathe ~~Rioja~~joint ~~Province,~~venture ~~Argentina.~~is ~~The~~to ~~agreement~~put ~~became~~the ~~effective~~Cieneguita inproperty ~~March~~into ~~2011~~production. ~~Under~~Pursuant ~~the~~to ~~terms of~~ the agreement, ~~the~~MRT ~~Company~~was ~~is required~~ to ~~pay~~provide ~~$150,000~~the ~~upon~~necessary ~~signing~~working ~~(paid)~~capital ~~the~~to ~~agreement,~~begin ~~$200,000~~and onmaintain ~~the~~mining ~~first~~operations ~~anniversary~~at ~~(paid)~~Cieneguita, ~~$500,000~~which onare ~~the~~estimated ~~second~~to ~~anniversary,~~be $~~750~~3,000 ~~on the third anniversary~~, $1000.2 ~~million~~MRT onplanned ~~the~~to ~~fourth~~spend ~~anniversary,~~100% ~~and $2.2 million on the fifth anniversary~~ of the ~~signing,~~money ~~with a final option payment of $5 million~~ to ~~purchase~~earn ~~a 100~~74% ~~interest~~of in the ~~Cerro~~net ~~Delta~~cash ~~project~~flow ~~payable~~from onproduction ~~the~~(notes ~~sixth~~5 ~~anniversary~~and ~~of the signing~~6). The ~~vendor~~Company ~~will~~was ~~retain~~expected ato 1receive 20% ~~net~~of ~~smelter~~the ~~return~~net ~~(“NSR”)~~cash ~~(note~~flows 6)from production.

On February 12, 2009, the Company entered into a joint venture through a definitive agreement for development of its Cieneguita project with Minera Rio Tinto, S.A. de C.V. (“MRT”), a private company duly incorporated pursuant to the laws of Mexico. The purpose of the joint venture is to put the Cieneguita property into production. Pursuant to the agreement, MRT was to provide the necessary working capital to begin and maintain mining operations at Cieneguita, which are estimated to be $3,000,000. MRT planned to spend 100% of the money to earn 74% of the net cash flow from production (notes 5 and 6). The Company was expected to receive 20% of the net cash flows from production.

In September 2011, the Company executed an amended and restated development agreement for the restructure of its Cieneguita joint venture related to the Cieneguita project. Under the restructured joint venture agreement the Company was to receive 20% of the net operating profits after royalties for material processed through a small-scale pilot operation and mined from the first 15 meters depth of the Cieneguita deposit until December 31, 2012. For all other material processed from the property, the Company's interest is 80% and MRT is reduced to a 20% working interest, subject to certain dilution provisions (note 6).

In September, 2012, the Company entered into a second amended and restated development agreement (“Second Amended and Restated Development Agreement”) with MRT related to the mineral exploration, production and development of the Company’s Cieneguita ~~Project~~project. Under the Second Amended and Restated Development Agreement, the Company’s share of net cash flow from the pilot project operated by MRT on the Cieneguita project increases from 20% to 29% beginning retroactive to March 1, 2012 through December 31, 2012. Beginning January 1, 2013 through December 31, 2013, the Company’s share of net cash flow from the pilot project increases to 35%. At all times, the Company retains its 80% ownership interest in the entire Cieneguita ~~Project~~project. This agreement eliminates the additional fees previously payable by MRT for minerals mined below the first 15 meters.

The Second Amended and Restated Development Agreement extended the date of the pilot project from December 31, 2012 to December 31, 2013. MRT may terminate the pilot project by providing the Company with ~~ninety (~~90) days advanced written notice, and the Company may terminate the pilot project upon an uncured breach of the Second Amended and Restated Development Agreement by MRT.

2.	SIGNIFICANT ACCOUNTING POLICIES

(a)	Recent accounting pronouncements

(i) On June 16, 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance removes the presentation options in ASC 220 and requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The ASU does not change the items that must be reported in other comprehensive income. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. ~~Implementation~~The ofCompany does not expect the provisions of ASU 2011-05 ~~did~~to ~~not~~ have a material effect on the financial position, results of operations or cash flows of the Company, as the Company currently presents a continuous statement of operations and comprehensive income (loss).

(ii) On May 12, 2011, the FASB issued ASU 2011-04. The ASU is the result of joint efforts by the FASB and IASB to develop a single, converged fair value framework. Thus, there are few differences between the ASU and its international counterpart, IFRS 13. This ASU is largely consistent with existing fair value measurement principles in U.S. GAAP; however it expands ASC 820’s existing disclosure requirements for fair value measurements and makes other amendments. The ASU is effective for interim and annual periods beginning after December 15, 2011. ~~Implementation~~The ofCompany does not expect the provisions of ASU 2011-05 ~~did~~to ~~not~~ have a material effect on the financial position, results of operations or cash flows of the Company.

(iii)

In May 2010, the FASB issued ASU 2010-19, Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in this update are effective as of the announcement date of March 18, 2010. Implementation of ASU 2010-19 did not have a material effect on the financial position, results of operations or cash flows of the Company.

(iv) In April 2010, the FASB issued ASU 2010-17, Revenue Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The amendments in this update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption ~~was~~is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity should apply the amendments retrospectively from the beginning of the year of adoption. Implementation of ASU 2010-17 did not have a material effect on the financial position, results of operations or cash flows of the Company.

3.	GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis. The Company has a history of operating losses and will need to raise additional capital to fund its planned operations. As at ~~November~~May 3031, ~~2012~~2013, the Company had a cumulative loss, during its exploration period, of $5052,~~771~~187,~~592~~178 (February 2928, ~~2012~~2013 - $4951,~~701~~962,~~810~~796). These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company intends to reduce its cumulative loss through the attainment of profitable operations from its investment in Mexican ~~and Argentine~~ mining ~~ventures~~venture (note 6). In addition, the Company has conducted private placements of common stock and convertible debt (note 10), which have generated a portion of the initial cash requirements for its planned mining ventures (note 6).

In April 2013, the Company’s Canadian bank accounts were frozen due to a garnishing order for a judgement against the Company by a vendor in the amount of $120,000 plus interest. The Company has accrued the amounts due to this vendor at May 31, 2013.

In March 2013, the Company completed a private placement of 2,400,000 shares at $0.12 per share for total gross proceeds of $240,000 in cash (note 6).

In July 2012, the Company completed a private placement of 17,500,000 shares at $0.12 per share for total gross proceeds of $1,050,000 in cash and an additional $1,050,000 of real property in Argentina.

In May 2012, the Company converted subscription proceeds of $45,000 and issued 300,000 shares of common stock in a private placement. The subscribers to the subscription proceeds have agreed to purchase one unit for each $0.20 of subscription proceeds. Each unit consists of one share of the Company’s common stock and one warrant each exercisable at $0.30, which expires in two years.

In February 2012, the Company completed a private placement of 4,500,000 units at $0.20 per unit for total gross proceeds of $900,000. Each unit consisted of one share of common stock and one warrant to purchase one share of common stock, each exercisable at $0.30, expiring in two years from the closing date.

In June 2011, the Company completed a private placement of 1,500,000 units at $0.20 per unit, for total proceeds of $300,000. Each unit consisted of one share of common stock and one warrant to purchase one share of common stock, each exercisable at $0.30, expiring in two years from the closing date.

In March 2011, the Company completed a private placement of 6,560,000 units at $0.20 per unit, for total proceeds of $1,312,000. Each unit consisted of one share of common stock and one warrant to purchase one share of common stock. Each warrant is exercisable for one share of common stock at an exercise price of $0.30 per share for a period of two years from the closing date.

In July 2009, the Company signed a definitive agreement to sell its Guazapares project located in southwest Chihuahua, Mexico to Paramount Gold de Mexico, SA de C.V., the Mexican subsidiary of Paramount Gold and Silver Corp. (“Paramount”) for a total consideration of up to $5,300,000. The purchase price iswas to be paid in two stages. The first payment of $3,700,000 was released from escrow in February 2010, as the transfer of the 12 claims to Paramount was completed. An additional payment of $1,600,000 iswould have been due if, within 36 months following execution of the letter of agreement (July 10, 2009), either (i) Paramount Gold de Mexico SA de C.V. ishad been sold by Paramount, either through a stock sale or a sale of substantially all of its assets, or (ii) Paramount’s San Miguel project iswould have been put into commercial production. As of ~~January~~July 1410, ~~2013~~2012, none of these two events occurred.

EQUIPMENT

		November 30, 2012							February 29 2012
	May 31, 2013			February 28 2013
	Cost	~~Cost~~Accumulated Depreciation	Net Book	Net Book	~~Accumulated Depreciation~~		~~Net Book~~		~~Net Book~~
			Value	Value			~~Value~~		~~Value~~
	$	$	$	$		$		$		$
Software	24,222	18,706	245,~~061~~516	5,557		~~18,458~~		~~5,603~~		~~5,944~~
Machinery	14,806	7,768	147,~~509~~038	7,329		~~6,887~~		~~7,622~~		~~142,957~~
Vehicles	78,271	74,431	763,~~700~~840	4,676		~~71,201~~		~~5,499~~		~~9,418~~
Computers	14,137	12,930	131,~~853~~207	1,318		~~12,422~~		~~1,431~~		98
Office equipment	16,638	10,835	165,~~304~~803	6,153		~~9,802~~		~~6,502~~		~~7,787~~
			145,427			118,770		26,657		166,204
	148,074	124,670	23,404	25,033

5.	JOINT VENTURE WITH MRT

On February 12, 2009, the Company entered into a joint venture through a definitive agreement for development of its Cieneguita project with MRT. The purpose of the joint venture iswas to put Cieneguita property into production. As per the agreement, MRT iswas to provide the necessary working capital to begin and maintain mining operations estimated to be $3,000,000. MRT ~~will~~was to spend 100% of the funds in exchange for a 75% interest in the net cash flow from production. The agreement was amended in December 2009 for MRT to earn a 74% interest in the net cash flow from production (note 6).

In September 2011, the Company executed an amended and restated development agreement for the restructure of its Cieneguita joint venture related to the Cieneguita project. Under the restructured joint venture agreement the Company ~~receives~~was to receive 20% of the net operating profits after royalties for material processed through a small-scale pilot operation and mined from the first 15 meters depth of the Cieneguita deposit until December 31, 2012. For all other material processed from the property, the Company's interest iswas 80% and MRT iswas reduced to a 20% working interest, subject to certain dilution provisions (note 6).

The agreement ~~limits~~limited the mining of the mineralized material that is available from the surface to a depth of 15 meters or approximately 10% of the mineralized material found as of the date of the definitive agreement. The Company incurs no obligations to the joint venture’s creditors as the operations and working capital requirements are controlled by MRT and as such, the Company has concluded that it is not the primary beneficiary of the joint venture. Accordingly, the Company’s share of income and expenses are reflected in these financial statements under the proportionate consolidation method.

In September, 2012, the Company entered into a Second Amended and Restated Development Agreement with MRT related to the mineral exploration, production and development of the Company’s Cieneguita Project. Under the Second Amended and Restated Development Agreement, the Company’s share of net cash flow from the pilot project operated by MRT on the Cieneguita project increases from 20% to 29% beginning retroactive to March 1, 2012 through December 31, 2012. Beginning January 1, 2013 through December 31, 2013, the Company’s share of net cash flow from the pilot project increases to 35%. At all times, the Company retains its 80% ownership interest in the entire Cieneguita ~~Project~~project. This agreement eliminates the additional fees previously payable by MRT for minerals mined below the first 15 meters.

The Company’s proportionate share of revenues was $31,~~889~~848,~~753~~686 and proportionate share of the net profit was $2734,~~020,738~~298 for the ~~nine~~three months ended ~~November~~May 3031, ~~2012~~2013. The Company’s proportionate share of accounts receivable of the joint venture was $~~770~~372,~~150~~011, at ~~November~~May 3031, ~~2012~~2013. The joint venture did not have any other assets or liabilities at ~~November~~May 3031, ~~2012~~2013.

PAN AMERICAN GOLDFIELDS LTD. (An Exploration Stage Company) Notes to the Consolidated Financial Statements (Unaudited) (Expressed in U.S. Dollars) Nine Months Ended November 30, 2012

6. MINERAL PROPERTIES

The Company incurred exploration expenses as follows in the nine months ended November 30, 2012:

	Cieneguita		Cerro Delta		New Projects		Total
		$		$		$		$
Drilling and sampling		3,592		13,910		3,854		21,356
Field work preparations		-		369,204		-		369,204
Salaries		86,340		-		-		86,340
Land use permits		8,675		-		-		8,675
Travel		18,441		-		-		18,441
Consulting		594,147		7,265		-		601,412
Equipment		159,539		-		-		159,539
General		9,885		892		50,659		61,436
		880,619		391,271		54,513		1,326,403

The Company incurred exploration expenses as follows in the nine months ended November 30, 2011:

	Cieneguita		Cerro Delta		Encino Gordo		Total
		$		$		$		$
Geological, geochemical, geophysics		20,640		28,751		-		49,391
Land use permits		7,503		910		2,166		10,579
Automotive		-		-		-		-
Travel		8,138		-		-		8,138
Consulting		107,859		30,930		-		138,789
Equipment		86,759		-		-		86,759
General		6,199		37,152		-		43,351
		237,098		97,743		2,166		337,007

6. MINERAL PROPERTIES ~~(continued)~~

The Company incurred exploration expenses as follows in the three months ended May 31, 2013:

	Cieneguita	Total
	$	$

Geological, geochemical, geophyics	2,074	2,074
Travel	7,091	7,091
Consulting	200,798	200,798
Equipment	76,873	76,873
General	1,139	1,139
	287,975	287,975

The Company incurred exploration expenses as follows in the three months ended May 31, 2012:

	Cieneguita	Cerro Delta	New Projects	Total
	$	$	$	$

Geological, geochemical, geophysics	-	130,000		130,000
Field work preparations	-	239,178	-	239,178
Travel	3,904	-	-	3,904
Consulting	231,637	-	-	231,637
Equipment	36,055	-	-	36,055
General	2,615	892	659	4,166
	274,211	370,070	659	644,940

Since May 2004, the Company has held interests in gold exploration properties in Mexico.

In August 2005, the Company formed its wholly owned subsidiary, Sunburst de Mexico, which allowed the Company to take title to the properties in the name of Sunburst de Mexico. On August 25, 2005, the Company entered into property agreements with MRT, which provided Sunburst de Mexico options to purchase the mineral concessions of the Cieneguita and Guazapares properties and the right of refusal on three Encino Gordo properties. The Company also entered into ana development and sale agreement, in October 2006, with Minera Emilio S.A. de C.V. for the mineral concessions of the Sahuayacan property.

In August 2005, the parties also entered into an operator’s agreement, that gave MRT the sole and exclusive right and authority to manage the Cieneguita property, and a share option agreement which granted MRT the exclusive option to acquire up to 100% of all outstanding shares of Sunburst de Mexico if the Company did not comply with the terms of the property agreements. The operator’s agreement and share option agreement were subsequently cancelled when the Company and Sunburst de Mexico entered into a new contract with MRT as described below under “Encino Gordo”.

In February 2009, the Company entered into an exploration agreement with MRT, which was amended in December 2009~~. Pursuant to the terms of the amended development agreement~~, ~~MRT~~then ~~agreed~~in toSeptember ~~invest~~2011 ~~up to $8,000,000 to put the first phase of the Cieneguita project into production~~ and ~~complete~~finally ain ~~feasibility~~September ~~study~~2012. The first phase of production was limited to the mining of the mineralized material that is available from the surface to a depth of 15 meters (“First Phase Production”). In exchange, the Company assigned MRT an interest to 74% of the net cash flows from First Phase Production and MRT would have earned a 54% ownership interest by spending up to $4,000,000 to take the Cieneguita project through the feasibility stage.

In September 2011, the Company executed an amended and restated development agreement for the restructure of its Cieneguita joint venture related to the Cieneguita project. Under the restructured joint venture agreement the Company was to receive 20% of the net operating profits after royalties for material processed through a small-scale pilot operation and mined from the first 15 meters depth of the Cieneguita deposit until December 31, 2012. For all other material processed from the property, the Company's interest was 80% and MRT was reduced to a 20% working interest, subject to certain dilution provisions.

In September, 2012, the Company entered into a Second Amended and Restated Development Agreement with MRT related to the mineral exploration, production and development of the Company’s Cieneguita Project. Under the Second Amended and Restated Development Agreement, the Company’s share of net cash flow from the pilot project operated by MRT on the Cieneguita project increases from 20% to 29% beginning retroactive to March 1, 2012 through December 31, 2012. Beginning January 1, 2013 through December 31, 2013, the Company’s share of net cash flow from the pilot project increases to 35%. At all times, the Company retains its 80% ownership interest in the entire Cieneguita Project. This agreement eliminates the additional fees previously payable by MRT for minerals mined below the first 15 meters.

The Second Amended and Restated Development Agreement extended the date of the pilot project from December 31, 2012 to December 31, 2013. MRT may terminate the pilot project by providing the Company with ninety (90) days advanced written notice, and the Company may terminate the pilot project upon an uncured breach of the Second Amended and Restated Development Agreement by MRT.

6.MINERAL PROPERTIES (continued)

The material provisions of the property agreements are as follows:

Cieneguita

MRT assigned to Sunburst de Mexico, with the permission of the Cieneguita property’s owner, Corporativo Minero, S.A. de C.V. (“Corporativo Minero”), all of MRT’s rights and obligations acquired under a previous agreement (the Cieneguita option agreement), including the exclusive option to acquire the Cieneguita property for a price of $2,000,000. Prior to assigning the Cieneguita property to the Company, MRT had paid $350,000 to Corporativo Minero. As the Cieneguita property was not in production by May 6, 2006, Sunburst de Mexico was required to pay $120,000 to Corporativo Minero to extend the contract. Corporativo Minero agreed to reduce the obligation to $60,000, of which $10,000 was paid in April 2006 and the balance paid on May 6, 2006. The Company made this payment to Corporativo Minero and the contract was extended.

The Company had the obligation to pay a further $120,000 per year for the next 13 years and the balance of the payments in the 14th year, until the total amount of $2,000,000 was paid. The Company renegotiated the payment due May 6, 2007, to $60,000 payable on November 6, 2007, which was paid, and the balance of $60,000 was paid on December 20, 2007. The Company paid $60,000 on May 12, 2008, of the $120,000 due on May 6, 2008, and the balance was paid in June 2008. The Company paid $30,000 each for a total of $120,000 on May 22, 2009, June 26, 2009, September 4, 2009 and November 20, 2009. In 2010, the Cieneguita project was put into production under the development agreement as described above and the payment terms were changed based on the following formula:

The Company must pay the Cieneguita owners $20 per ounce of gold produced from the Cieneguita property to the total of $2,000,000 due. In the event that the price of gold is above $400 per ounce, the property payments payable to the Cieneguita owners from production will be increased by $0.10 for each dollar increment over $400 per ounce. The total payment of $2,000,000 does not change with fluctuations in the price of gold. Non-payment of any portion of the $2,000,000 total payment will constitute a default. In such case, the Cieneguita owners will retain ownership of the concessions, but the Company will not incur any additional default penalty.

In September 2011, the Company, MRT and Corporativo Minero entered into a new agreement, where Corporativo Minero was entitled to a monthly payment of $30,000, to be paid from the net cash flows from production at Cieneguita until the completion of the first 15 meters of production or December 31, 2012, whichever occurs first.

In September 2012, the Company entered into a Second Amended and Restated Development Agreement with MRT whereby the Company’s share of net cash flow from the pilot project operated by MRT increases from 20% to 29% beginning retroactively from March 1, 2012 to December 31, 2012. From January 1, 2013 to December 31, 2013, this amount increases to 35%.

Based on production at Cieneguita, the joint venture paid $~~240~~90,000 during the ~~nine~~three months ended ~~November~~May 3031, ~~2012~~2013 (February 2928, ~~2012~~2013 - $~~227~~330,~~241~~000) to the Cieneguita owners. As of ~~November~~May 3031, ~~2012~~2013, Corporativo Minero has been paid a total of $1,~~417~~597,241 for the Cieneguita property. The Company is not ~~presently~~ in default on its payments for the Cieneguita property.

6.MINERAL PROPERTIES (continued)

On February 12, 2009, the Company entered into a definitive agreement for development of the Cieneguita project with MRT. The definitive agreement covered project financing of up to $9,000,000. The major points of the agreement were as follows:

(i)

MRT and/or its investors will subscribe for $1,000,000 of a secured convertible debenture at 8% interest (payable in stock or cash). The debenture was convertible into units at $0.60 per unit. Each unit comprised two common shares and one warrant. Each warrant is exercisable at $0.50 per share for a period of three years. The placement will be used for continued development of the Company’s properties and general working capital.

(ii)

MRT is to provide the necessary working capital to begin and maintain mining operations estimated to be $3,000,000 used for the purpose of putting the Cieneguita property into production. MRT will spend 100% of the money to earn 75% of the net cash flow from production. The agreement will limit the mining to the mineralized material that is available from surface to a depth of 15 meters or approximately 10% of the mineralized material found to date.

(iii)

MRT will spend up to $5,000,000 to take the Cieneguita property through the feasibility stage. In doing so, MRT will earn a 60% interest in the Company’s rights to the property. After the expenditure of the $5,000,000 all costs will be shared on a ratio of 60% to MRT and 40% to the Company. If the Company elects not to pay its portion of costs after the $5,000,000 has been spent, the Company’s position shall revert to a 25% carried interest on the property.

To generate funding for the Company’s continued operations, the Company issued $1,500,000 of convertible debentures in March 2009, of which an aggregate of $880,000 was issued to Mario Ayub, a former director of the Company, and his affiliated entity, MRT. Pursuant to the terms of the convertible debentures, the holders irrevocably converted the debentures into a 10% ownership interest in the Cieneguita project and a 10% interest in the net cash flow from First Phase Production.

In December 2009, Mario Ayub and MRT agreed to resell an aggregate 4% ownership interest in the Cieneguita project back to the Company, along with 4% of the net cash flow from First Phase Production, in return for $550,000. In a private transaction not involving the Company, the other holders contributed their remaining 6% ownership interest in the Cieneguita project to a newly formed entity, Marje Minerals SA (“Marje Minerals”).

In December 2009, the Company amended the development agreement and its agreements with the debenture holders. According to the amended development agreement, the ownership interest in the Cieneguita project and the net cash flows from the First Phase Production were held by the Company, MRT and Marje Minerals as follows:

Holder	Ownership Percentage	Net Cash Flow Interest From First Phase Production	Net Cash Flow Interest ~~From~~Following First Phase Production	~~Net Cash Flow Interest Following First Phase Production~~
MRT	54% (1)	74%	7454% (1)	~~54%~~
Marje Minerals	6%	6%	6%	6%
Panam	40%	20%	2040%	~~40%~~

(1) Was to be earned by MRT by spending $4,000,000 to take the Cieneguita project through the feasibility stage.

Any additional costs for the First Phase Production and the feasibility study for the Cieneguita project, after MRT invested $8,000,000, would have been shared by the Company, MRT and Marje Minerals on a pro-rata basis based on their respective ownership percentages in the Cieneguita project.

6.MINERAL PROPERTIES (continued)

The major terms of the amended development agreement with MRT and Marje Minerals were as follows:

(i)

MRT purchased $1,000,000 of secured convertible debentures at 8% interest (payable in stock or cash). The proceeds from this investment were used for continued development and exploration of the Cieneguita project and general working capital. On November 5, 2009, MRT exercised its conversion rights on the debenture and MRT was issued 3,333,333 common shares and a warrant to purchase 1,666,667 shares of common stock at an exercise price of $0.50 per share.

(ii)

MRT agreed to provide the necessary working capital to begin and maintain mining operations, estimated to be $3,000,000, to put the first phase of the Cieneguita project into production. In exchange for these funds, the Company assigned MRT an interest to 74% of the net cash flow from First Phase Production. The agreement limits the mining during First Phase Production to the mineralized material that is available from the surface to a depth of 15 meters.

(iii)

MRT committed to spend up to $4,000,000 to take the Cieneguita project through the feasibility stage. In doing so, the Company assigned MRT a 54% interest in its rights to the Cieneguita project. After the expenditure of the $4,000,000, all costs will be shared on a pro rata ownership basis (i.e. 54% to MRT, 40% to the Company and 6% to Marje Minerals). If any party cannot pay its portion of the costs after the $4,000,000 has been spent, then their ownership position in the Cieneguita project will be reduced by 1% for every $100,000 invested by the other owners. The Company’s ownership interest in the Cieneguita project, however, cannot be reduced below 25%. In addition, the Company has the right to cover Marje Minerals’ pro rata portion of costs if they cannot pay their portion of the costs. In return, the Company will receive 1% of Marje Minerals’ ownership position in the Cieneguita project for every $100,000 the Company invests on their behalf.

(iv)

The MRT agreement was contingent on the Company repaying its debenture to Paramount. In March 2009, the Company repaid $1,000,000, or approximately two-thirds of the debt, and Paramount released a security interest it had on the Cieneguita project. In October 2009, the Company repaid the remaining amount of the debt and Paramount released its security interests on the Sahuayacan, Guazapares and Encino Gordo properties.

In September 2011, the Company executed a new amended and restated development agreement with MRT and Marje Minerals, for the restructure of its Cieneguita joint venture. Under the restructured joint venture agreement the Company receives 20% of the net operating profits after royalties for material processed through a small-scale pilot operation and mined from the first 15 meters depth of the Cieneguita deposit until December 31, 2012. For all other material processed from the property, the Company's interest is 80% and MRT is reduced to a 20% working interest, subject to certain dilution provisions. The Company also bought back 6% interest in Cieneguita from Marje Minerals in exchange for 3,333,333 common shares of the Company.

6.MINERAL PROPERTIES (continued)

Under the agreement, the parties agreed to restructure their respective ownership interests in the Cieneguita project as follows:

Holder	Ownership Percentage	Net Cash Flow Interest From First Phase Production	Net Cash Flow Interest Following First Phase Production
MRT	20%	74%	20%
Marje Minerals	0%	6%	0%
Panam	80%	20%	80%

The Company and MRT shall be responsible for the cost of a feasibility study on a pro rata basis based on their respective amended ownership percentages of the Cieneguita project.

Marje Minerals will also assume approximately $490,000 in debt of the Company in consideration for receiving half of all monthly net cash flows that the Company is entitled from operations on the first 15 meters, if any, until the sooner of December 31, 2012 or until Marje Minerals receives $490,000 from these cash flows (note 7).

In connection with the revised development agreement, MRT also purchased 2,000,000 ~~million~~ shares of the Company’s common stock at a price of $0.12 per share for net proceeds of $240,000 pursuant to the Company’s private placement subscription agreement. The Company will issue the shares to MRT in reliance on exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder.

6.MINERAL PROPERTIES (continued)

Encino Gordo

On December 8, 2005, the Company and Sunburst de Mexico entered into a “New Agreement” with MRT to exercise their option under the sale and purchase of the mining concessions agreement, dated August 18, 2005, to obtain two mining concessions in the Encino Gordo region. The New Agreement also provided the Company the option to obtain three additional concessions in the Encino Gordo region.

The following were additional material terms of the New Agreement:

(a)	The share option agreement with MRT was cancelled;

(b)

The Company granted MRT the option to buy all of the outstanding shares of Sunburst de Mexico for $100 if the Company failed to transfer $1,500,000 to Sunburst de Mexico by April 30, 2006. On April 6, 2006, MRT agreed to waive its option to purchase the shares of Sunburst de Mexico and also waived the Company’s obligation to transfer $1,500,000 to Sunburst de Mexico. The property agreements were modified to change the NSR to a maximum of 2.5% for all properties covered by the agreements. The property agreements contained NSRs ranging from 0.5% to 7%;

(c)

The Company agreed to issue 2,000,000 shares of the Company’s common stock to MRT within four months of the date of signing of the New Agreement. These shares were issued to MRT and its assignee at the market value of $1.05 per share on February 23, 2006, and $2,100,000 was charged to operations for the year ended February 28, 2006. This issuance fulfilled the Company’s payment obligations under the previous property agreements;

(d)	The Company agreed to issue 1,000,000 additional shares of the Company’s common stock to MRT if and when the Cieneguita property is put into production and reaches 85% of production capacity over a 90-day period, as defined in the New Agreement; and

(e)	The operator’s agreement with MRT was cancelled.

Sunburst de Mexico purchased two of the Encino Gordo concessions from MRT for a price of 1,000 pesos (approximately US$100), and MRT assigned to Sunburst de Mexico a first right of refusal to acquire three additional Encino Gordo concessions. The total payments to acquire 100% of these three additional concessions were as follows: $10,000 on June 30, 2006 (paid); $25,000 on December 31, 2006 (paid), $50,000 on December 31, 2007 ($20,000 of this payment was made on January 3, 2008 and the balance was paid on February 29, 2008) and $75,000 on December 31, 2008 (the payment was not made and the Company was in default). In August 2009, the Company decided to surrender the Encino Gordo 2 mining concession eliminating any future concession payments on these properties.

In May 2012, the Company transferred its interest in concessions at the Encino Gordo project located in the Barranca region of Chihuahua State in Mexico, which included two concessions owned by the Company and two additional concessions the Company had the option to acquire, to MRT. In connection with the transfer, MRT paid $100,000 cash, waived $200,000 in payments the Company owed to MRT in connection with the Encino Gordo Project and agreed to assume all of the Company’s obligations related to the transferred concessions.

Cerro Delta

In February 2011, the Company management entered into an agreement with Compania Minera Alto Rio Salado S.A., a private Argentine entity, for the acquisition of the 15,000 -hectare Cerro Delta project in northwest La Rioja Province, Argentina. Under the terms of the agreement, the Company must pay $150,000 upon signing (paid), and $200,000 on the first anniversary (paid), $500,000 on the second anniversary, $750,000 on the third anniversary, $1.2 million on the fourth anniversary, and $2.2 million on the fifth anniversary of the signing, with a final option payment of $5 million to purchase a 100% interest in the project payable on the sixth anniversary of the signing. The vendor ~~will~~was to retain a 1% NSR.

In December 2012, due to the significantly deteriorating political and working environment in Argentina and the difficulty to fund Maricunga belt projects, the Company froze all spending in Argentina. In January 2013, the Company cancelled the contract with Compania Minera Alto Rio Salado S.A. to acquire the Cerro Delta project.

7. ~~PROMISSORY~~LOANS ~~NOTES~~PAYABLE

As at ~~November~~May 3031, ~~2012~~2013, there were loans payable in the ~~Company~~amount ~~had~~of $~~nil~~3,557 (February 2928, ~~2012~~2013 - $~~nil~~10,867), which are all current. The loans are repayable in monthly instalments of ~~promissory~~$3,702 ~~notes~~(February ~~outstanding~~28, ~~comprising~~2013 ~~the~~– ~~following:~~$3,702), including interest of 7.50% per annum.

~~(a) During the year ended February 29, 2008, the Company converted accounts payable of $465,994 (Swiss Franc (“CHF”) 565,000) into promissory notes~~8. ~~The~~PREFERRED Company had an implied obligation to pay the accounts payable in CHF as the funds to pay the expense came from Swiss investors in CHF. Accordingly, the promissory notes were issued in CHF. The notes consisted of one warrant for each CHF 5.00 of notes issued, exercisable at $1.00 each. The principal and interest on the notes became due and payable on April 30, 2008. The interest rate payable during the default period was 12%. In September 2011, the Company executed debt conversion and release agreements to convert promissory notes and related interest charges in the amount of $1,091,645 into Company’s common shares for a total of 3,340,880 shares (note 10).STOCK

~~(b)~~The ~~During~~Company ~~the~~is ~~year~~authorized ~~ended~~to ~~February~~issue 2920, ~~2012~~000,000 ~~the~~shares of preferred stock. The Company’s ~~entered~~board of directors is authorized to divide the preferred stock into anseries, ~~agreement~~and with respect to ~~convert~~each ~~$17~~series,~~778~~ ofto determine the ~~promissory~~preferences ~~notes~~and rights and qualifications, limitations or restrictions thereof, including ~~accrued~~the ~~interest~~dividend byrights, ~~issuing~~conversion 55rights,~~000~~ voting rights, redemption rights and terms, liquidation preferences, sinking fund provisions, and the number of shares constituting the series and the designations of such series. The board of directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the ~~Company’s~~voting rights of the holders of common stock, ~~(note~~which ~~10)~~issuance could have certain anti-takeover effects. There were no shares of preferred stock issued or outstanding at May 31, 2013 or May 31, 2012.

(c) $10,358 of promissory notes were to be repaid over a 12 month period as part of a debt settlement agreement. These notes bore no interest. In September 2011, the Company assigned these notes to Marje Minerals as part of the amended and restated development agreement (note 6).

(d) $28,113 of promissory notes bore no interest and had no repayment terms. In September 2011, the Company assigned these notes to Marje Minerals as part of the amended and restated development agreement (note 6).

8. LOANS PAYABLE

As at November 30, 2012, there were loans payable in the amount of $25,247 (February 29, 2012- $12,887). The loans were repayable in monthly instalments of $3,702 (February 29, 2012 – $3,272), including interest of 7.50% per annum.

9. PREFERRED STOCK

The Company is authorized to issue 20,000,000 shares of preferred stock. The Company’s board of directors is authorized to divide the preferred stock into series, and with respect to each series, to determine the preferences and rights and qualifications, limitations or restrictions thereof, including the dividend rights, conversion rights, voting rights, redemption rights and terms, liquidation preferences, sinking fund provisions, and the number of shares constituting the series and the designations of such series. The board of directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting rights of the holders of common stock, which issuance could have certain anti-takeover effects. There were no shares of preferred stock issued or outstanding at November 30, 2012 or February 29, 2012.

109. COMMON STOCK

In March 2013, the Company completed a $240,000 private placement offering, whereby the Company issued 2,400,000 shares of its common stock at a subscription price of $0.12 per share.

In January 2013, the Company issued 500,000 common shares to a consultant pursuant to a consulting agreement. The shares were valued at the time of issuance at $0.13 per share.

In November 2012, the Company issued 250,000 common shares to a consultant pursuant to a consulting agreement. The shares were valued at the time of issuance at $0.12 per share.

In September 2012, the Company issued 500,000 common shares to a consultant pursuant to a consulting agreement. The shares were valued at the time of issuance at $0.13 per share.

In September 2012, the Company issued the remaining 2,166,666 common shares relating to the acquisition of 6% of ownership interest in the Cieneguita project (see December 2011 issuance below).

In November 2012, the Company issued 250,000 common shares to a consultant pursuant to a consulting agreement. The shares were valued at the time of issuance at $0.12 per share.

In July 2012, the Company converted outstanding fees in the amount of $71,900 owed to the Company’s directors into shares of the Company’s common stock, at a conversion price of $0.10 per share (note 13).

In July 2012, the Company completed a $2.1 million private placement offering, whereby the Company issued 17,500,000 shares of its common stock at a subscription price of $0.12 per share. Of the aggregate purchase price, $1,050,000 was paid in cash and $1,050,000 was paid through the transfer of real property in Argentina. The Company intends to liquidate this property as soon as practical. In conjunction with the offering, the Company paid a finder’s fee of $84,000 and 700,000 shares of common stock.

In June 2012, the Company issued 194,444 common shares pursuant to a debt settlement agreement to settle $20,000 of debt. The shares were valued at the time of issuance at $0.10 per share.

In May 2012, the Company converted subscription proceeds of $45,000 and issued 300,000 shares of common stock in a private placement. The subscribers to the subscription proceeds have agreed to purchase one unit for each $0.20 of subscription proceeds. Each unit consists of one share of the Company’s common stock and two warrants each exercisable at $0.20 and $0.30, which expire in two years. In July 2012, the Company paid a finder’s fee of $2,400 related to the private placement.

In April 2012, the Company issued 235,294 common shares pursuant to a debt settlement agreement to settle $40,000 of debt. The shares were valued at the time of issuance at $0.17 per share.

In April 2012, the Company issued 250,000 common shares to a consultant pursuant to a consulting agreement. The shares were valued at the time of issuance at $0.18 per share.

~~In February 2012, the Company issued 500,000 shares of common stock and warrants to purchase 500,000 shares of common stock at $0~~10.~~30,~~ ~~expiring~~STOCK onCOMPENSATION ~~February 29, 2014, to a consultant.~~PROGRAM

Between September 2011 and February 2012, the Company converted subscription proceeds of $900,000 and issued 4,500,000 shares of common stock in a private placement. The subscribers to the subscription proceeds have agreed to purchase one unit for each $0.20 of subscription proceeds. Each unit consists of one share of the Company’s common stock and one warrant each exercisable at $0.30, which expires in two years.

In December 2011, the Company acquired 6% ownership interest in the Cieneguita project in exchange for 3,333,333 common shares, of which, the Company had issued 1,166,667 common shares as of February 29, 2012.

In October 2011, the Company and note holders agreed to cancel $979,476 of outstanding debt in exchange for 3,340,880 shares of the Company’s common shares. The Company recognized a gain on settlement of debt in the amount of $277,891. In November 2011, the Company also issued 267,271 shares to a consultant as consulting fee relating to the settlement of debt.

In August 2011, the Company negotiated return of 750,000 shares to the treasury from a former president. The shares were valued at the time of issuance at $0.28 per share.

In July 2011, the Company issued 500,000 shares of common stock and warrants to purchase 500,000 shares of common stock at $0.30, expiring on July 21, 2013, to a consultant.

In June 2011, the Company converted subscription proceeds of $300,000 and issued 1,500,000 shares of common stock in a private placement. The subscribers to the subscription proceeds have agreed to purchase one unit for each $0.20 of subscription proceeds. Each unit consists of one share of the Company’s common stock and one warrant each exercisable at $0.30, which expires in two years.

In June 2011, the Company issued 125,000 shares to a consultant pursuant to a consulting agreement.

In June 2011, the Company issued the 423,752 shares pursuant to the April 2011 debt settlement agreement. The shares were valued at the time of the debt settlement agreement of $0.28 per share.

PAN AMERICAN GOLDFIELDS LTD. (An Exploration Stage Company) Notes to the Consolidated Financial Statements (Unaudited) (Expressed in U.S. Dollars) Nine Months Ended November 30, 2012

10. COMMON STOCK (continued)

In April 2011, the Company converted subscription proceeds of $347,000 and issued 1,735,000 shares of common stock in a private placement. The subscribers to the subscription proceeds have agreed to purchase one unit for each $0.20 of subscription proceeds. Each unit consists of one share of the Company’s common stock and one warrant each exercisable at $0.30, which expires in two years.

In March 2011, the Company converted subscription proceeds of $665,000 and issued 3,325,000 shares of common stock in a private placement. The subscribers to the subscription proceeds have agreed to purchase one unit for each $0.20 of subscription proceeds. Each unit consists of one share of the Company’s common stock and one warrant each exercisable at $0.30, which expires in two years.

In March 2011, the Company and a note holder agreed to cancel $17,778 in outstanding debt in exchange for 55,000 shares of the Company’s common stock.

In March 2011, the Company issued 500,000 shares of common stock and warrants to purchase 500,000 shares of common stock at $0.30, expiring on December 31, 2012, to a consultant.

11. STOCK COMPENSATION PROGRAM

On March 18, 2009, the board of directors approved the granting of stock options according to the 2009 Nonqualified Stock Option Plan (“2009 Option Plan”) whereby the board is authorized to grant to employees and other related persons stock options to purchase an aggregate of up to 6,000,000 shares of the Company's common stock. Subject to the adoption of the 2009 Option Plan, the options were granted and vest, pursuant to the terms of the 2009 Option Plan, in six equal instalments, with the first instalment vesting at the date of grant, and the balance vesting over 2.5 years, every six months.

In the ~~nine~~three months ended ~~November~~May 3031, ~~2012~~2013, the Company awarded nil options to purchase common shares (~~November~~May 3031, ~~2011~~2012 – ~~1,600,000~~nil) and recorded stock-based compensation expense for the vesting options of $~~153~~24,~~300~~700 (~~November~~May 3031, ~~2011~~2012 - $~~272~~86,~~075~~600). The following weighted average assumptions were used for the Black-Scholes option-pricing model to value stock options granted in ~~fiscal~~ 2013 and 2012:

	2013	2012
Expected volatility	-	110.11%
Weighted-average volatility	-	110.11%
Expected dividend rate	-	-
Expected life of options in years	-	10
Risk-free rate	-	3.38%

~~There~~PAN ~~were~~AMERICAN noGOLDFIELDS ~~capitalized~~LTD. ~~stock-based~~(An ~~compensation~~Exploration ~~costs~~Stage atCompany) ~~November~~Notes ~~30,~~to ~~2012~~the orConsolidated ~~November~~Financial ~~30,~~Statements ~~2011~~(Unaudited) (Expressed in U.S. Dollars) Three Months Ended May 31, 2013

~~The~~10.STOCK ~~weighted-average~~COMPENSATION ~~grant-date~~PROGRAM ~~fair value of options granted during the nine months ended November 30, 2012 and November 30, 2011 was $nil and $0.29, respectively.~~(continued)

	2013	2012
Expected volatility	-	-
Weighted-average volatility	-	-
Expected dividend rate	-	-
Expected life of options in years	-	-
Risk-free rate	-	-

There were no capitalized stock-based compensation costs at May 31, 2013 or May 31, 2012.

The summary of option activity under the 2009 Option Plan as of May 31, 2013, and changes during the period then ended, is presented below:

	Weighted	Number of	Weighted-	Aggregate
	Average	Shares	Average	Intrinsic
	Exercise		Remaining	Value
	Price		Contractual
Options	$		Term

Balance at March 1, 2013	0.29	4,961,669
Options granted	-	-
Options exercised	-	-
Options cancelled/forfeited	0.23	(1,166,669)

Balance at May 31, 2013	0.30	3,795,000	6.41	-

Exercisable at May 31, 2013	0.30	3,611,668	6.33	-

The weighted-average grant-date fair value of options granted during the three months ended May 31, 2013 and May 31, 2012 is $nil and $nil, respectively.

A summary of the status of the Company’s non-vested options as of May 31, 2013, and changes during the three months ended May 31, 2013, is presented below:

		Weighted-average
		Grant-Date
Non-vested options	Shares	Fair Value
		$

Non-vested at February 28, 2013	533,332	0.25
Granted	-	-
Vested	(183,332)	0.27
Cancelled/forfeited	(166,668)	0.26
Non-vested at May 31, 2013	183,332	0.27

As of May 31, 2013, there was an estimated $74,100 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2009 nonqualified stock option plan. That cost is expected to be recognized over a weighted-average period of approximately 0.38 years.

11.~~STOCK~~ ~~COMPENSATION PROGRAM (continued)~~WARRANTS

~~The~~As ~~summary~~at ofMay ~~option~~31, ~~activity~~2013, ~~under~~ the ~~2009~~Company ~~Option~~had ~~Plan~~a astotal of ~~November~~19,900,000 30warrants (February 28, ~~2012~~2013 – 29,160,000) ~~and~~outstanding ~~changes~~to ~~during~~purchase common stock. Each warrant entitles the ~~period~~holder ~~then~~to ~~ended~~purchase one share of the Company’s common stock. The Company has reserved 19,900,000 isshares ~~presented~~of ~~below:~~common stock in the event that these warrants are exercised.

	Weighted		Number of		Weighted-		Aggregate
	Average		Shares		Average		Intrinsic
	Exercise				Remaining		Value
	Price				Contractual
Options	$				Term
Balance at March 1, 2012		0.34		6,215,000
Options granted		-		-
Options exercised		-		-
Options cancelled/forfeited		-		-
Balance at November 30, 2012		0.34		6,215,000		6.89		-
Exercisable at November 30, 2012		0.36		5,348,336		6.66		-

During the three months ended May 31, 2013, the Company received $nil from warrants exercised.

A summary of the status of the Company’s non-vested options as of November 30, 2012, and changes during the nine months ended November 30, 2012, is presented below:

				Weighted-average
				Grant-Date
Non-vested options	Shares			Fair Value
					$
Non-vested at February 29, 2012		1,566,665			0.26
Granted		-			-
Vested		(700,001	)		0.27
Cancelled/forfeited		-			-
Non-vested at November 30, 2012		866,664			0.27

As of November 30, 2012, there was an estimated $224,300 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2009 nonqualified stock option plan. That cost is expected to be recognized over a weighted-average period of approximately 0.80 years.

On April 29, 2011, the Company repriced the exercise price of 1,125,000 vested stock options by reducing the exercise prices of $0.36 and $0.44 to $0.28. As a result, the Company recorded incremental stock-based compensation of $6,000 during the year ended February 29, 2012.

PAN AMERICAN GOLDFIELDS LTD. (An Exploration Stage Company) Notes to the Consolidated Financial Statements (Unaudited) (Expressed in U.S. Dollars) Nine Months Ended November 30, 2012

12. WARRANTS

As at November 30, 2012, the Company had a total of 29,160,000 warrants (February 29, 2012 – 32,011,733) outstanding to purchase common stock. Each warrant entitles the holder to purchase one share of the Company’s common stock. The Company has reserved 29,160,000 shares of common stock in the event that these warrants are exercised.

During the nine months ended November 30, 2012, the Company received $nil from warrants exercised.

The following table summarizes the continuity of the Company’s share purchase warrants:

	Number of Warrants	~~Number~~Weighted ofAverage ~~Warrants~~Exercise Price			~~Weighted Average Exercise Price~~
Balance, February 28, 2011			25,826,733		$	0.41
Balance, February 29, 2012	32,011,733	$	0.35
Issued	2,100,000		~~19,060,000~~0.26			~~0.30~~
Cancelled/expired	(4,951,733)		~~(12,875,000~~0.68	)		~~0.30~~
Exercised	-		-			-
Balance, February 29, 2012			32,011,733		$	0.35
Balance, February 28, 2013	29,160,000	$	0.29
Issued	300,000		~~2,100,000~~0.30			~~0.26~~
Cancelled/expired	(9,560,000)		~~(4,951,733~~0.30	)		~~0.68~~
Exercised	-		-			-
November 30, 2012			29,160,000		$	0.29
May 31, 2013	19,900,000	$	0.29

As at ~~November~~May 3031, ~~2012~~2013, the following share purchase warrants were outstanding:

Number of Warrants	Exercise Price $	Expiry Date
300,000	0.20	May 22, 2014
	$
600,000	0.20	May 15, 2014
1,000,000	0.25	April 30, 2022
3,000,000	0.25	July 26, 2020
300,000	0.25	August 22, 2021
200,000	0.25	September 6, 2013
300,000	0.30	~~May~~March 1513, ~~2014~~2015
500,000	0.30	December 31, 2012
3,325,000	0.30	March 17, 2013
1,735,000	0.30	April 13, 2013
500,000	0.30	April 29, 2021
1,500,000	0.30	June 2, 2013
500,000	0.30	July 21, 2013
4,400,000	0.30	December 30, 2013
5,000,000	0.30	December 29, 2016
1,000,000	0.30	December 29, 2016
500,000	0.30	February 20, 2014
100,000	0.30	February 28, 2014
500,000	0.30	February 15, 2022
5,000,000	0.3025	~~December~~September 2419, ~~2020~~2019
500,000	20.0030	August 28, 2014
29,160,000
500,000	0.30	December 31, 2015
19,900,000

2120

1312. RELATED PARTY TRANSACTIONS

For the ~~nine~~three months ended ~~November~~May 3031, ~~2012~~2013, the Company paid or accrued management and directors’ ~~fees~~fee of $~~371~~97,~~600~~500 (~~November~~May 3031, ~~2011~~2012 - $~~293~~120,~~000~~500) to certain officers and directors. The Company also paid or accrued $~~332~~82,~~908~~986 (~~November~~May 3031, ~~2011~~2012 - $~~558~~150,~~460~~556) to certain officers and directors for ~~exploration property, finders’ fee,~~ travel, office and other related expenses.

~~During~~The ~~the nine months ended November 30, 2012, the~~ Company ~~converted~~also ~~outstanding~~paid consulting fees ~~in the amount~~ of $7121,~~900~~139 ~~owed~~(May to31, ~~the~~2012 ~~Company’s~~- ~~directors~~$nil) ~~into~~to ~~shares~~a director of the Company~~’s common stock (note 10)~~.

~~The~~As ~~Company~~at ~~also~~May ~~paid~~31, ~~consulting~~2013, ~~fees~~accounts payable of $29111,~~250~~650 (~~November~~May 3031, ~~2011~~2012 - $49273,~~500~~531) was owing to adirectors ~~company~~and ~~owned~~officers byof athe ~~director~~Company.

As at November 30, 2012, accounts payable of $129,414 (November 30, 2011 - $50,534) was owing to directors and officers of the Company and $13,545 (August 31, 2011 - $nil) was owing to a company controlled by a director.

All related party transactions are in the normal course of business at the exchange amount agreed to by each party.

1413. SUPPLEMENTAL CASH FLOW INFORMATION

	Nine months ended November 30, 2012	Nine months ended November 30, 2011	Period From Inception of Exploration Stage (March 1, 2004) to November 30, 2012
	Three months ended May 31, 2013	Three months ended May 31, 2012	Period From Inception of Exploration Stage (March 1, 2004) to May 31, 2013
	$	$	$
Interest paid	-	-	310,053
Common stock issued on conversion of debt	~~131,900~~-	~~128~~40,~~651~~000	4,453,551
Common stock issued on settlement of notes payable	-	~~775,490~~-	3,908,812
Common stock issued for interest costs	-	-	82,500
Common stock issued for financing costs	~~84,000~~-	-	229,000
Common stock issued for mineral property costs	~~407,334~~-	-	1,206,667
Common stock issued for bonuses	-	-	512,750
Shares issued for services	~~138,250~~-	~~268~~45,~~750~~000	1,~~015~~080,090

2214. SUBSEQUENT EVENTS

In June 2013, the Company converted $60,533 of debt owed to certain directors for directors’ fee into 289,775 common shares.

In June 2013, the Company issued 3,500,000 common shares in exchange for 10,000,000 warrants to certain directors and an officer under a settlement agreement.

In June 2013, the Company issued 42,450 common shares to a consultant pursuant to a consulting agreement.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Form 10-Q, including statements in the following discussion which are not statements of historical fact, constitute "forward-looking statements". These statements, which may be identified by words such as “plans”, “intends”, "anticipates", “hopes”, “seeks”, “will”, "believes", "estimates", "should", "expects" and similar expressions include our expectations and objectives regarding our present and future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in such forward-looking statements. Numerous factors and future events could cause us to change such plans and objectives or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce revenues, income or profits. Such risks and uncertainties include those set forth under this Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Form 10-Q and in our Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). These forward-looking statements represent beliefs and assumptions only as of the date of this report. We undertake no obligation to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. No statements contained in the following discussion should be construed as a guarantee or assurance of future performance or future results. We advise you to carefully review the reports and documents we file from time to time with the SEC, particularly our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K. As used in this management’s discussion and analysis, the terms “Pan American”, the “Company”, “we”, “us”, and “our” mean Pan American Goldfields Ltd.

Overview

We are an exploration stage company ~~and~~focused ~~have~~on ~~generated~~mineral ~~only~~exploration ~~limited~~activities ~~revenues~~in ~~from~~Mexico through our ~~Cieneguita~~wholly ~~project~~owned toMexican ~~date~~subsidiary, ~~and~~Sunburst ~~have~~Mining ~~not~~de ~~yet~~Mexico, ~~generated~~S.A. orde ~~realized~~C.V., ~~any~~(“Sunburst”). ~~revenue~~We ~~from~~are ~~our~~currently ~~other~~engaged in the exploration ~~projects.~~and Asdevelopment of ~~November~~one ~~30,~~gold ~~2012~~and silver project, wenamed ~~had~~the ~~$263~~Cieneguita Project,~~978~~ which is made up of several mining concessions. The Cieneguita Project is located in ~~our~~the ~~bank~~Sierra ~~account~~Madre region of the State of Chihuahua, Mexico.

InTo ~~September~~help ~~2012~~support our exploration activities, in February 2009 we entered into a ~~second~~joint ~~amended~~venture ~~and~~agreement ~~restated~~with ~~development~~Minera ~~agreement~~Rio ~~(“Second~~Tinto, ~~Amended~~S.A. ~~and~~de ~~Restated~~C.V. ~~Development Agreement~~(“MRT”), ~~with~~a ~~MRT~~mining ~~related~~operator toin ~~the mineral exploration~~Chihuahua, ~~production~~Mexico ~~and development of~~ (the ~~Company’s~~“Joint ~~Cieneguita~~Venture ~~Project~~Agreement”). Under the ~~Second~~Joint ~~Amended~~Venture ~~and~~Agreement, ~~Restated~~we ~~Development~~authorized ~~Agreement,~~MRT ~~our~~to ~~share~~commence ofa ~~net~~small ~~cash~~scale ~~flow~~milling ~~from~~operation at our Cieneguita Project (the “pilot project” ~~operated~~or by“pilot operation”). MRT oncommenced the ~~Cieneguita~~pilot ~~project~~operation ~~increases~~in ~~from~~March ~~20%~~2010 toafter ~~29%~~the ~~beginning~~construction ~~retroactively~~of tosystems ~~March~~and 1,initial ~~2012~~plant ~~through~~facilities ~~December~~for ~~31,~~crushing ~~2012.~~and ~~Beginning~~gravity ~~January~~and 1,flotation ~~2013~~circuits ~~through~~were ~~December~~complete ~~31,~~and ~~2013,~~adequate ~~our~~water ~~share~~supplies ofestablished. ~~net~~Operations ~~cash~~have ~~flow~~since ~~from~~been ~~the~~expanded ~~pilot~~from ~~project~~one ~~increases~~ to ~~35%.~~two At12-hour ~~all~~shifts ~~times,~~per weday ~~retain~~with ~~our~~a ~~80%~~processing ~~ownership~~rate ~~interest~~up into ~~the~~750 ~~entire~~tonnes ~~Cieneguita~~per ~~Project~~day. ~~This~~The ~~agreement~~terms ~~eliminates~~of the ~~additional~~Joint ~~fees~~Venture ~~previously~~Agreement ~~payable~~(as byamended) with MRT ~~for~~are ~~minerals~~discussed ~~mined~~in ~~below~~detail ~~the first 15 meters~~below.

~~The~~Our ~~Second~~financial ~~Amended~~condition ~~and~~has ~~Restated~~improved ~~Development~~substantially ~~Agreement~~since ~~extended~~late ~~the~~2009. ~~date~~At of the ~~pilot~~time, ~~project~~the ~~from~~Company’s ~~December~~working ~~31,~~capital ~~2012~~deficiency towas ~~December~~approximately ~~31, 2013~~$4.7 ~~MRT~~million ~~may~~and ~~terminate~~ the ~~pilot~~Company ~~project~~received byno ~~providing~~revenues usfrom ~~with~~its 90operations. ~~days~~Because ~~advanced~~of ~~written~~lack ~~notice~~of capital, ~~and we may terminate~~ the ~~pilot~~Company ~~project~~faced ~~upon~~having anits ~~uncured~~interests ~~breach~~in of the ~~Second~~Cieneguita ~~Amended~~Project ~~and~~reduced ~~Restated~~from ~~Development~~40% ~~Agreement~~to ~~by MRT~~25%.

InSince ~~connection~~then, ~~with~~ the ~~revised~~Company’s ~~development~~position ~~agreement,~~has ~~MRT~~improved ~~also~~dramatically. ~~purchased~~The 2Company ~~million~~now ~~shares~~receives 35% of ~~Pan~~net ~~American’s~~cash ~~common~~flow ~~stock~~from pilot operations at athe ~~price~~Cieneguita ofProject, ~~$0.12~~which ~~per~~were ~~share~~100% ~~for~~financed ~~net~~by ~~proceeds~~MRT ofunder ~~$240~~the Joint Venture Agreement,~~000.~~ ~~The~~and ~~Company~~it ~~will~~retains ~~issue~~at ~~the~~all ~~shares~~times toan ~~MRT~~80% ownership interest in ~~reliance~~the onCieneguita ~~exemptions~~Project. ~~from~~In ~~registration~~addition, ~~pursuant~~the toCompany ~~Section~~has ~~4(2)~~substantially ~~under~~reduced the ~~Securities~~nearly ~~Act~~$5 ofmillion ~~1933,~~in debt it had incurred as ~~amended~~of 2009, and ~~Rule~~has ~~506~~achieved ~~promulgated~~positive ~~thereunder~~working capital.

In September 2011, webecause ~~executed~~MRT anexperienced ~~amended~~delays ~~and~~in ~~restated~~achieving ~~development~~a ~~agreement~~steady ~~pursuant~~state of production at the pilot project and was unable to complete a ~~binding~~feasibility ~~letter~~study ~~agreement~~for ~~signed~~the inCieneguita ~~June~~Project ~~2011~~within ~~with~~the ~~Minera~~prescribed ~~Rio~~time ~~Tinto,~~by ~~S.A.~~the deinitial ~~C.V.~~terms anof ~~entity~~the ~~organized~~Joint ~~under~~Venture Agreement, we were able to renegotiate the ~~laws~~terms of the ~~United~~Joint ~~Mexican~~Venture ~~States~~Agreement ~~(“MRT”)~~to ~~and~~increase ~~Marje~~the ~~Minerals~~Company’s ~~S.A.,~~cash anflow ~~entity~~from ~~organized~~the ~~under~~pilot ~~the~~project ~~laws~~and its percentage ownership of the ~~United~~overall ~~Mexican~~Cieneguita ~~States~~Project. ~~(“Marje~~We ~~Minerals”),~~assumed ~~concerning~~ the ~~restructuring~~responsibility ofto complete a preliminary economic assessment for the ~~prior~~Cieneguita ~~agreements~~Project, ~~between~~and the parties, ~~including~~agreed ~~their~~to ~~respective~~fund ~~ownership~~the ~~interests~~future infeasibility ~~our~~study for the Cieneguita ~~project~~Project inon ~~Chihuahua~~a ~~State,~~pro-rata ~~Mexico~~basis according to their respective ownership percentages.

In September 2012, the Company negotiated a second amendment to the Joint Venture Agreement with MRT, as discussed in more detail below. In the second amendment to the Joint Venture Agreement, we were further able to increase cash flow to the Company from the pilot project at the Cieneguita Project, on a retroactive basis to March 2012. The ~~parties~~second ~~agreed~~amendment to ~~restructure~~the ~~their~~Joint ~~respective~~Venture Agreement also increased our ownership interests in the Cieneguita ~~project~~Project, as ~~follows:~~well as removed the depth limitations for the pilot project, giving MRT more incentive to implement project efficiencies and increase the production rate of the pilot project. Now, due to the second amendment of the Joint Venture Agreement, we are not wholly dependent on the equity markets for funding the Company’s development, a strategy that has turned out to be prescient given the current market conditions.

Holder	Ownership Percentage	Net Cash Flow Interest From First Phase Production	Net Cash Flow Interest Following First Phase Production
MRT	20%	74%	20%
Marje Minerals	0%	6%	0%
Pan American	80%	20%	80%

As a result of our efforts and strategy, the Company has received revenues from MRT on a regular monthly basis to support the Company's activities since late 2011.

Recent Developments

Change in Board of Directors

As previously disclosed in its Current Report on Form 8-K filed with the Securities and Exchange Commission on June 21, 2013, pursuant to an Order Setting Meeting Date and Quorum Rule, which the Delaware Court of Chancery entered on March 1, 2013 (the “Order”), the Company held its annual meeting of stockholders on June 17, 2013 (the “Annual Meeting”). On March 19, 2013, Emilio Alvarez, a stockholder associated with Vortex Capital Ltd. (“Vortex”), subsequently submitted a Stockholder Notice (the “Notice”) of his intention to nominate five individuals (the “Vortex Nominees”) at the Annual Meeting. Mr. Alvarez and Vortex solicited proxies on behalf of the Vortex Nominees in advance of the Annual Meeting. At the Annual Meeting, the Company questioned the Notice’s compliance with one of the Company’s Bylaw requirements for stockholder nominations and took the position at the meeting that the Notice did not comply with such Bylaw requirement and that the Vortex Nominees were excluded from consideration at the Annual Meeting. Vortex disputed the Company’s position and took the position that Mr. Alvarez submitted a valid Notice and asserted the nomination of the Vortex Nominees was valid and sufficient.

Following the Annual Meeting, the Company and Vortex entered into discussions to resolve the dispute and avoid litigation and, as a result, entered into a settlement agreement (the “Settlement Agreement”), which was to become effective following formal approval by the Board of Directors. Among other things, the Settlement Agreement provided that the following persons, all of whom are Vortex Nominees, would serve as directors and hold office for the terms designated, (i) Laurent Deydier to hold office until the 2014 Annual Meeting, (ii) Balbir Bindra and William R. Majcher to hold office until the 2015 Annual Meeting, and (iii) Emilio Alvarez and Bruno Le Barber to hold office until the 2016 Annual Meeting. In addition, pursuant to the terms of the Settlement Agreement, Ricardo Ernesto Marcos Touche has been appointed to hold office until the 2014 Annual Meeting. Accordingly, there is one vacancy in the class of directors holding office until the 2015 Annual Meeting. The Settlement Agreement additionally provides for mutual releases by the Company, Vortex, the Vortex Nominees and the departing members of the Board.

Additionally, pursuant to the terms of the Settlement Agreement, Messrs. Neil Maedel, Hernan Celorrio, George Young, Randy Buchamer and Gary Parkison agreed that they were no longer members of the Board of Directors of the Company (the “Board”) and each of Messrs. Maedel, Celorrio, Young, Buchamer and Parkison entered into an option and warrant exchange and share issuance agreement (the “Share Issuance Agreements”), pursuant to which they exchanged warrants issued in connection with Board service for shares of the Company’s common stock. Pursuant to each of their respective Share Issuance Agreements, Mr. Maedel exchanged warrants to purchase 6,000,000 shares of the Company’s common stock for the issuance of 2,100,000 shares of the Company’s common stock and Messrs. Celorrio, Young, Buchamer and Parkison each exchanged a warrant to purchase 1,000,000 shares of common stock for the issuance of 350,000 shares of the Company’s common stock. The shares issued in exchange for the warrants, were issued pursuant to Section 3(a)(9) and Section 4(2) of the Securities Act of 1933, as amended. Mr. Maedel also entered into a consulting agreement with the Company for a consulting fee of $5,000 per month for a term ending December 31, 2013, to provide transition services as requested by the Company.

Project Developments Joint Venture Agreement

In September 2011, because MRT experienced delays in achieving a steady state of production at the pilot project and was unable to complete a feasibility study for the Cieneguita Project within the prescribed time by the initial terms of the Joint Venture Agreement, we were able to renegotiate the terms of the Joint Venture Agreement to increase the Company’s cash flow from the pilot project and its percentage ownership of the overall Cieneguita Project. We assumed responsibility to complete a preliminary economic assessment for the Cieneguita Project, and the parties agreed to fund the future feasibility study for the Cieneguita Project on a pro-rata basis according to their respective ownership percentages.

In September 2012, we entered into the second amendment of the Joint Venture Agreement with MRT. The parties agreed to the following provisions pursuant to the second amendment of the Joint Venture Agreement:

Our share of net cash flow from the pilot project operated by MRT on the Cieneguita Project increased from 20% to 29% beginning retroactive to March 1, 2012 through December 31, 2012. Beginning January 1, 2013 through December 31, 2013, our share of net cash flow from the project increases to 35%. After December 31, 2013, we receive 80% of the net cash flow. At all times, the Company retains its 80% ownership interest in the entire Cieneguita project.

·	Additional fees previously payable by MRT for minerals processed below the first 15 meters have been eliminated.

We· ~~receive~~MRT, ~~20%~~which ofis the ~~net~~exclusive ~~operating~~operator, ~~profits~~must ~~after~~provide ~~royalties~~us ~~for~~financial ~~material~~information ~~processed~~related ~~through~~to athe ~~small-scale~~calculation ~~pilot~~of ~~operation~~net ~~and~~cash ~~mined~~flow ~~from~~within ~~the~~30 ~~first~~days ~~15 meters depth~~ of the ~~Cieneguita~~end ~~deposit~~of ~~until~~each ~~December~~month ~~31, 2012. To discourage deeper mining by MRT, our interest is 80%~~ and ~~MRT~~will ispay ~~reduced to~~ a ~~20%~~minimum ~~working~~US ~~interest~~$150,000 ~~subject~~ to ~~certain~~us ~~dilution~~within ~~provisions~~the ~~for~~first ~~all~~10 ~~other~~days ~~material~~of ~~processed~~each ~~(below~~month 15as ~~meters)~~a ~~from~~good ~~the~~faith ~~property~~advance ~~following~~against the ~~first~~previous ~~phase.~~month’s Innet ~~comparison,~~cash ~~the~~flow. ~~current~~The ~~market~~balance ~~rate~~of ~~for~~monies ~~contract~~owed ~~mining~~(if inany) ~~the~~to ~~region~~us is for the ~~property~~previous ~~owner~~quarter is to ~~receive~~be ~~approximately~~paid ~~20%~~within of45 ~~net~~days ~~cash~~from ~~flow while~~ the ~~contract~~end ~~miner~~of ~~receives~~each ~~80%~~fiscal ~~for mining, processing and selling the resulting concentrate~~quarter.

~~Pan~~· ~~American~~MRT ~~and~~must ~~MRT~~provide ~~shall~~us bewith ~~responsible~~quarterly ~~for~~reports ~~the~~summarizing ~~cost~~exploration, ofdevelopment aand ~~feasibility~~operations ~~study~~and onall arelated ~~pro~~technical ~~rata~~results ~~basis~~from ~~based~~activities on ~~their~~the ~~respective~~Cieneguita ~~amended~~Project. ~~ownership~~All ~~percentages~~ of the ~~Cieneguita~~books ~~project~~and records and the operations of MRT are subject to audit by us.

In· ~~August~~MRT ~~2011~~must, weat ~~appointed~~its ~~Hernan~~cost, ~~Celorrio~~provide, asa anquarterly ~~advisor~~audit towithin ~~the~~thirty ~~board~~(30) days of ~~directors~~the ~~and~~end asof aeach ~~director~~fiscal ofquarter ~~Recursos~~regarding ~~Argentinos~~compliance ~~SA,~~with ~~our~~environmental ~~newly~~laws ~~formed~~and ~~subsidiary~~steps inrequired ~~Argentina.~~to ~~Mr.~~effect ~~Celorrio,~~remediation aor ~~lawyer,~~other isrequired anactions ~~expert~~(if inany) ~~Argentinean~~to ~~mining~~maintain ~~law~~ and/or ~~has~~bring anthe ~~extensive~~project ~~background~~operations ininto ~~the~~compliance ~~industry.~~with Heall isapplicable ~~currently~~environmental ~~the~~laws. ~~vice~~The ~~president~~audit ofis ~~the~~to ~~Argentine-Chilean~~be ~~Chamber~~performed ofby ~~Commerce~~an ~~and~~independent aexpert ~~director~~environmental ofconsulting ~~the~~firm ~~executive~~selected ~~committee~~by us and ~~president~~MRT. ofMRT ~~the~~is ~~Mining~~solely ~~Committee~~responsible offor ~~the~~any ~~Argentine~~costs ~~Canadian Chamber~~ of ~~Commerce.~~effecting Heany isremediation ~~also~~recommended ~~the~~by ~~president of~~ the ~~Argentine Mining Foundation (FUNDAMIN)~~audit.

In· ~~July~~The ~~2011,~~date weof ~~entered~~the ~~into~~pilot anproduction ~~agreement~~was ~~with~~extended M3from ~~Engineering~~December ~~and~~31, ~~Technology~~2012 ~~Corporation~~to ~~(“M3~~December ~~Engineering”)~~31, ~~for~~2013. ~~the~~MRT ~~execution~~may ~~and~~terminate ~~completion~~the ofproject aby ~~National~~providing ~~Instrument~~us ~~43-~~with ~~101~~ninety (~~“NI 43-101”~~90) ~~compliant~~days ~~Preliminary~~advanced ~~Economic~~written ~~Assessment~~notice, ~~(“PEA”)~~and ~~for~~we ~~the~~may ~~Cieneguita~~terminate the project upon an uncured breach of the Joint Venture Agreement by MRT.

In· ~~February~~At ~~2011,~~all ~~we entered into an agreement with Compania Minera Alto Rio Salado S.A.~~times, ~~a private Argentine entity, for the acquisition of the 15,000-hectare Cerro Delta Project in northwest La Rioja Province, Argentina. Under the terms of the agreement,~~ we ~~must~~retain ~~pay~~our $150,000 upon signing (paid), $200,000 (the Company has paid $140,000 and is negotiating payment for the remainder) on the first anniversary, $500,000 on the second anniversary, $750,000 on the third anniversary, $1.2 million on the fourth anniversary, and $2.2 million on the fifth anniversary of the signing, with a final option payment of $5 million to purchase a 10080% ownership interest in the ~~Cerro~~entire ~~Delta~~Cieneguita Project ~~payable on the sixth anniversary of the signing~~. ~~The vendor will retain a 1% net smelter revenue (“NSR”).~~

InThe ~~conjunction~~map ~~with~~below shows the ~~acquisition~~location of the ~~Cerro~~Cieneguita ~~Delta~~ Project, wein ~~completed~~the aSierra ~~private~~Madre ~~placement~~Sierra region of ~~6,560,000~~the ~~units~~State ~~at $0.20 per unit, for total proceeds~~ of $1Chihuahua,~~312,000.~~ ~~Each unit consists of one share of common stock and a warrant to purchase one share of common stock~~Mexico. ~~Each warrant is exercisable for one share of common stock at a conversion price of $0.30 for a period of two years from the closing date.~~

In October 2010, we appointed Miguel F. Di Nanno as President and Chief Operating Officer, replacing George Young effective as of October 15, 2010. Mr. Young remains on our board of directors. Mr. Di Nanno has experience in mining and energy exploration and most recently served as president of Somuncurah S.R.L. and AupaS.A., both exploration and development firms focused in Argentina. He has also previously served as the chief operating officer of the Grosso Group, an exploration and new mining business development firm and as the representative and country manager in Argentina for Palladon Ventures Ltd., a gold and silver exploration company. He has a degree in Mining Engineering – Ore Dressing from the National University of San Juan.

In July 2010, we appointed Neil Maedel, Randy Buchamer and Gary Parkison to our board of directors. Mr. Maedel is an investment banker specializing in international resource projects; Mr. Buchamer has extensive experience in business administration and finance; and Mr. Parkison is qualified geologist and project manager with expertise in exploration and development of minerals and metals projects. All of the newly appointed directors have technical and financial industry experience base that will assist us with operations and our planned listing on either the Toronto Stock Exchange or the TSX Venture Exchange, consistent with our status as a producing resource company.

In July 2010, we reincorporated from the State of Colorado to the State of Delaware. The reincorporation was effected pursuant to an agreement and plan of merger (the “Merger Agreement”), by and between us and Pan American Goldfields Ltd., a Colorado corporation (formerly Mexoro Minerals Ltd.), with Pan American being the surviving corporation. Accordingly, the rights of our shareholders are now governed by Delaware General Corporation Law and the certificate of incorporation and bylaws of Pan American are filed with the State of Delaware.

In May 2010, management decided to drop the Sahuayacan Project due to lack of economic thicknesses and grades of gold mineralization encountered in the drilling program, eliminating any future concession payments for this Project.

Our continued existence and plans for future growth depend on the receipt of funds from our partner MRT from the ongoing operations at the Cieneguita Project. Should there be an interruption in this cash flow it will be necessary to obtain additional capital to operate either through the issuance of additional debt or equity.

~~For~~Other the nine months ended November 30, 2012, the joint venture with MRT, as described further below, had generated net cash flows from the tuning and start-up operations of approximately $13,413,000 of which $3,890,000 is attributable to us under the joint venture agreement. During September, October and November 2012, mining continued to focus on a higher grade zone. Gold and silver production levels continued to increase. Daily production of ore processed during the month of November ended at about 660 tonnes per day. The addition of a conditioner, disc filter and an additional flotation cell and a conventional thickener are expected to be result in a further increase to about 800 tonnes per day. Higher gold grades encountered mined during the month resulted in gold production reported in the sulfide concentrate increasing to 757.69 ounces compared to the 506 ounces produced in October and 311 ounces of gold produced in September. Silver production also increased to 75,330 ounces compared to 68,758 ounces in October and 48,215 ounces produced in September. It should be noted that production has steadily increased during 2012 from the low levels reached in March 2012 when production at Cieneguita was 36,517 ounces silver and 629 ounces gold.Projects

~~Mining~~In ~~continues~~February in2011, we had entered into an ~~area~~agreement ofwith ~~higher~~Compañia ~~silver~~Minera ~~and~~Alto ~~gold~~Rio ~~grades~~Salado ~~which~~S.A., ~~appear~~a toprivate ~~increase~~Argentine ~~with~~entity, ~~depth~~for ~~below~~the acquisition of the 15,000 ~~meters.~~hectares ~~The~~Cerro ~~area~~Delta ~~being~~Project ~~mined~~in isnorthwest ~~contiguous~~La ~~with~~Rioja Province, ~~but~~Argentina. ~~located~~Under the terms of the agreement, we were required to pay $150,000 upon signing the ~~northeast~~agreement, of$200,000 ~~where~~on ~~MRT~~the ~~has~~first ~~been~~anniversary, ~~mining~~$500,000 inon the ~~past~~second anniversary, $750,000 on the third anniversary, $1.2 ~~MRT~~million ~~has~~on ~~given~~the ~~guidance~~fourth ~~that~~anniversary, itand ~~expects~~$2.2 ~~this~~million ~~area~~on ~~being~~the ~~mined~~fifth toanniversary beof ~~sufficient~~the signing, with a final option payment of $5 million to ~~supply~~purchase a 100% interest in the ~~pilot~~Cerro ~~operation~~Delta ~~for~~Project payable on the ~~duration~~sixth anniversary of ~~2013~~the ~~based~~signing. onHowever, due to poor results from a field reconnaissance program, a worsening business environment in the country and the approach of an ~~average~~option ~~processing~~payment ~~rate~~in the amount of 20$500,000, ~~tonnes~~we ~~per~~elected ~~month~~to terminate the project in January 2013 in order to focus our resources on the development of the Cieneguita project. Additionally, we sold our Encino Gordo Project in Mexico in May 2012 for a total consideration of $300,000.

~~This~~In isJuly a2011, ~~pilot~~we ~~operation~~entered byinto ~~MRT~~an ~~which~~agreement ~~ends~~with ~~December~~M3 ~~31,~~Engineering ~~2013.~~and ~~Our~~Technology ~~portion~~Corporation of(“M3 ~~net~~Engineering”) ~~cash~~for ~~flow~~the isexecution ~~currently 29%~~ and ~~will~~completion ~~rise~~of toa ~~35%~~NI ~~beginning~~43-101 ~~January~~compliant 1,PEA ~~2013.~~for ~~Following~~ the ~~expiry~~Cieneguita ofProject. ~~the~~In ~~agreement~~June ~~on December 31~~2013, ~~2013~~we ~~MRT~~finalized ~~will~~and ~~have~~released the ~~opportunity~~PEA towhich ~~earn~~can abe ~~20%~~found ~~interest~~on ~~from~~ our ~~100%~~website, ~~interest~~www.panamgoldfields.com, inwith ~~the~~additional ~~deposit~~information assummarized ~~it is developed according to the results of an ongoing Preliminary economic assessment (PEA) which is~~ under the ~~guidance~~“Recent ofNews” M3section, ~~Engineering~~June ~~of Tucson~~12, ~~for~~2013 ~~what~~and isMarch ~~expected to be a 6000 to 7~~13,~~000~~ ~~ton per day operation~~2013. ~~Good~~We ~~progress~~believe ~~continues~~the ~~however,~~preliminary ~~delays~~data insupports ~~receiving~~a ~~results~~decision ~~for~~to ~~independent~~proceed ~~metallurgical~~with ~~tests~~the ~~and~~completion ~~an updated geologic model~~ of ~~the~~a ~~deposit~~full ~~and~~feasibility ~~associated~~study ~~mineralization~~to ~~has~~show ~~resulted in~~ the ~~completion~~potential ~~date~~of ~~for~~ the ~~PEA~~Cieneguita toProject. beThe ~~extended~~PEA toconfirms that the ~~first~~Cieneguita ~~quarter~~project orrepresents ~~2013.~~an ~~Preliminary~~exceptional ~~site~~opportunity ~~layout~~to ~~work~~develop ~~has~~a ~~been~~highly ~~completed~~economic, ~~and~~relatively islow-cost ~~awaiting~~mine in the ~~results~~prolific ofSierra ~~ongoing~~Madre ~~geotechnical~~gold ~~work related to mine waste rock dumps~~ and ~~sulfide~~silver ~~flotation~~belt ~~tailings~~in Mexico.

At its current 500 TPD rate of production, we estimate that mining until December 2013 would affect approximately 2% of the current resource, without attributing any of the potential additions to the resource from the north-east extension. MRT has advised the company that additions to the Cieneguita mill are planned with the intention of increasing the amount processed per day from 500 tons to approximately 700 tons per day.

Current cash and receivables from mining operations are sufficient to fund the Cieneguita PEA.

Despite the improvements there remains significant risk to us for this type of extracting of mineralized material because we will not have established reserves at Cieneguita until an independent feasibility study is complete. Consequently, without a feasibility study we cannot predict if the extraction and processing of mineralized material from the Cieneguita property will result in future cash flow.

Accordingly, in order to not depend on continued production at the Cieneguita project for the 12-month period from December 2012 through November 2013, we will need to raise additional capital to pursue our business plan of preparing a feasibility study and acquiring, exploring and developing additional high impact mineral properties and to provide a buffer for the possibility that the expected net cash flow currently generated by MRT is interrupted.

During this period, we will need to receive from production at the Cieneguita operations a minimum of $2.4 million, a portion of which will be used for general and administrative costs. As continuous operations have only recently begun, we cannot ascertain how reliable this income will be. This does not include any capital needed to pay our accounts payables and to execute our exploration programs as described below.

Plan of Operation

Summary

Our business plan is to focus on the development of our Mexican project while we continue to evaluate the viability of the Argentine project and the merits of further exploration of its mineral properties to determine whether they contain commercially exploitable reserves of gold, silver or other metals. During the past year the political and working environment in Argentina has deteriorated significantly, as has the financial environment and the ability to fund Maricunga belt projects. This combined with lacklustre field results during the past exploration season, in the Company’s view, makes the probability very low that a positive economic benefit for the Company would be produced as a result of further exploration expenditures. This reality has lead the Company to reconsider the merits of the project and to freeze spending at the Argentina project so that we may concentrate our resources on expanding operations at the Cieneguita project in Mexico.

In May 2012, we appointed Andrey Koniuhov as a member of the board of directors. Mr. Koniukov is currently the Director of Advanced Projects for Polyus Gold, the third largest company in the world by reserves. As the Deputy CEO of Polyus Exploration, he directed the brownfield exploration campaigns between 2009 and 2011 that led to the discovery of more than 40 million ounces of gold in the proven, probable, drill indicated and inferred categories,

In January 2012, we appointed Hernan Celorrio as a member of the board of directors. Mr. Celorrio was the President of Barrick Exploraciones Argentina S.A. and a Vice President of Minera Peñoles in Argentina, in addition he was on the board of Directors of Northern Orion Resources and Yamana Resources (Compañia Minera Polimet S.A.) in Argentina.Financings

In ~~July~~connection ~~2011~~with the Second Amended Agreement, weMRT ~~entered~~purchased ~~into~~2,000,000 anshares ~~agreement~~of ~~with~~our M3common ~~Engineering~~stock at a price of $0.12 per share for net proceeds of $240,000 pursuant to the ~~execution~~our ~~and~~private ~~completion~~placement ofSubscription aAgreement. NIWe ~~43-~~issued ~~101~~the ~~compliant~~shares ~~PEA~~to ~~for~~MRT in reliance on exemptions from registration pursuant to Section 4(2) under the ~~Cieneguita~~Securities ~~project~~Act of 1933, as amended, and Rule 506 promulgated thereunder.

On July 13, 2012 we entered into a $2.1 million private placement offering. In ~~June~~the ~~2011~~offering, we ~~appointed~~issued ~~Neil~~17,500,000 ~~Maedel~~shares of our common stock at a subscription price of $0.12 per share. Of the aggregate purchase price, $1,050,000 was paid in cash and $1,050,000 was paid through the transfer of real property in Argentina valued at $1,050,000. The shares were acquired by an accredited investor (as ~~chairman~~defined under Rule 501(a) of Regulation D promulgated under the ~~board~~Securities Act). The Company intends to liquidate the real property it acquired as soon as practical and has so far sold one unit for total proceeds of $330,000. We have used the net proceeds we received from the offering for working capital and general corporate purposes, including supporting the PEA for the Cieneguita Project.

InRevenue ~~May 2011, we appointed Dr. Alexander Becker as advisor to the board of directors, who has a PhD in Structural Geology,~~ and ~~an extensive history as an exploration geologist to assist us with the selection and development of exploration projects.~~Production

InPursuant ~~February~~to ~~2011, we entered into an agreement with Compania Minera Alto Rio Salado S.A., a private Argentine entity, for~~ the ~~acquisition~~amended ofJoint ~~the~~Venture 15Agreement,~~000-hectare~~ ~~Cerro Delta Project in northwest La Rioja Province, Argentina. Under~~ the ~~terms~~parties ofagreed ~~the~~to ~~agreement,~~restructure wecash ~~must~~flows ~~pay~~payments ~~$150,000 upon signing (paid), $200,000 on the first anniversary (the Company has paid $140,000~~ and isownership ~~negotiating payment for the remainder), $500,000 on the second anniversary, $750,000 on the third anniversary, $1.2 million on the fourth anniversary, and $2.2 million on the fifth anniversary~~ of the ~~signing,~~Cieneguita ~~with a final option payment of $5 million to purchase a 100% interest in the Cerro Delta~~ Project ~~payable~~as ~~on the sixth anniversary of the signing. The vendor will retain a 1% NSR.~~follows:

In conjunction with the acquisition of the Cerro Delta Project, we completed a private placement of 6,560,000 units at $0.20 per unit, for total proceeds of $1,312,000. Each unit consists of one share and one share purchase warrant. Each warrant is convertible into one share at a conversion price of $0.30 for a period of two years from the closing date.

Holder	Ownership Percentage	Net Cash Flow Interest (March 1, 2012 until December 31, 2012)	Net Cash Flow Interest (January 1, 2013 until December 31, 2013)	Net Cash Flow Interest (After December 31, 2013)
MRT	20%	65%	65%	20%
Marje Minerals	0%	6%	0%	0%
Pan American	80%	29%	35%	80%

InFor ~~March 2011, we appointed Bruno Le Barber as a member of~~ the ~~board~~three ofmonths ~~directors.~~ended ~~Mr.~~May Le31, ~~Barber has extensive financial expertise and is a co-founder of Vortex~~2013, athe ~~Hong~~joint ~~Kong~~venture based gold fund. Previously he was a Vice President at Morgan Stanley in London where he advised trading desks and a large investor base while publishing macro-economic studies. Mr. Le Barber was also a global technical strategist with ~~ABN~~MRT ~~Amro~~generated innet ~~Paris.~~cash Heflows ~~manages~~to ~~Vortex~~the ~~together~~Company ~~with~~of ~~Emilio Alvarez~~$734, ~~former Executive Director, Equity Research with Morgan Stanley in London~~000.

InWe ~~October~~expect ~~2010~~that certain capital improvements, weincluding ~~appointed~~an ~~Miguel~~improved F.water Dicollection ~~Nanno~~system asand ~~president,~~the ~~replacing~~construction ~~George~~of ~~Young~~a ~~effective~~small aswater ofreservoir ~~October~~adjacent ~~15,~~to ~~2010.~~the ~~Mr.~~Cieneguita ~~Young~~mill, ~~remains~~along onwith ~~our~~the ~~board~~addition of ~~directors.~~a ~~Mr.~~conditioner, Dia ~~Nanno~~disc ~~has~~filter, ~~experience~~additional inflotation ~~mining~~cell capacity and ~~energy~~a ~~exploration~~conventional ~~and~~thickener, ~~most~~should ~~recently~~result ~~served~~in asincreased ~~president~~production ofto ~~Somuncurah~~approximately ~~S.R.L.~~800 ~~and~~tons ~~AupaS.A.,~~per ~~both~~day ~~exploration~~from ~~and~~the ~~development~~current ~~firms~~rate ~~focused~~of in715 ~~Argentina.~~tons Heper ~~has~~day ~~also~~rate ~~previously~~at ~~served~~the asend ~~the~~of ~~chief~~fiscal ~~operating~~2013. ~~officer~~Monthly ofgold ~~the~~and ~~Grosso~~silver ~~Group,~~production anreporting ~~exploration~~to ~~and~~the ~~new~~sulfide ~~mining~~bulk ~~business~~concentrate ~~development~~at ~~firm~~Cieneguita ~~and~~was as1,346 ~~the~~oz ~~representative~~Au and ~~country~~123,405 ~~manager~~oz inAg ~~Argentina~~during ~~for~~quarter ~~Palladon~~ended ~~Ventures~~May ~~Ltd.~~31, a2013 ~~gold~~compared ~~and~~to ~~silver~~1,805 ~~exploration~~oz ~~company.~~Au Heand ~~has~~107,461 aoz ~~degree~~Ag in ~~Mining~~the ~~Engineering~~quarter –ended ~~Ore~~May ~~Dressing~~31, ~~from~~2012. The production averaged 690 tonnes milled per day during the ~~National~~quarter ~~University~~ended ofMay ~~San~~31, ~~Juan~~2013.

InGross ~~July~~revenue ~~2010,~~derived wefrom ~~appointed~~the ~~Neil~~pilot ~~Maedel,~~project ~~Randy~~pursuant ~~Buchamer~~to ~~and~~the ~~Gary~~Joint ~~Parkison~~Venture toAgreement ~~our~~for ~~board~~the ofthree ~~directors.~~months ~~Mr.~~ended ~~Maedel~~May is31, an2013 ~~investment~~was ~~banker~~$5,282,000 ~~specializing~~compared into ~~international~~$5,267,000 ~~resource~~for ~~projects;~~the ~~Mr.~~three ~~Buchamer~~months ~~has~~ended ~~extensive~~May ~~experience~~31, in2012, ~~business~~a ~~administration~~nominal ~~and~~increase. ~~finance;~~Net ~~and~~of ~~Mr.~~operating ~~Parkison~~costs, isthe aCompany’s ~~qualified~~net ~~geologist~~cash ~~and~~flow from pilot project, ~~manager~~was ~~with~~$734,000 ~~expertise~~for the three months ended May 31, 2013 compared to $592,000 in ~~exploration~~the ~~and~~three ~~development~~months ofended ~~minerals~~May ~~and~~31, ~~metals~~2012, ~~projects~~an increase of 24%. ~~All~~This was primarily due to the efforts of the ~~newly~~Company ~~appointed~~in ~~directors~~renegotiating ~~have~~the ~~technical~~Joint Venture Agreement with MRT and ~~financial~~obtaining ~~industry~~the ~~experience~~improved ~~base~~business ~~that~~terms ~~will~~discussed ~~assist~~above. usThe ~~with~~increase ~~operations~~was ~~and~~also ~~our~~due ~~planned~~to ~~listing~~increase onin ~~either~~the production rate at the ~~Toronto~~pilot ~~Stock~~plant, ~~Exchange~~increased orefficiencies in the ~~TSX~~overall ~~Venture~~operation ~~Exchange,~~and ~~consistent~~higher ~~with~~availability ~~our~~of ~~status~~the asmilling afacilities ~~producing~~resulting ~~resource~~from ~~company~~the amendments of the Joint Venture Agreement.

InFinancing July 2010, we reincorporated from the State of Colorado to the State of Delaware. The reincorporation was effected pursuant to an agreement and the Merger Agreement, by and between us and Pan American Goldfields Ltd., a Colorado corporation (formerly Mexoro Minerals Ltd.), with Pan American being the surviving corporation. Accordingly, the rights of our shareholders are now governed by Delaware General Corporation Law and the certificate of incorporation and bylaws of Pan American are filed with the State of Delaware.Needs

InThe ~~May~~term ~~2010,~~of ~~management~~the ~~decided~~pilot toproject ~~drop~~ends ~~the~~in ~~Sahuayacan~~December ~~properties~~31, ~~due~~2013. toWe ~~lack~~may extend the term of ~~economic~~the ~~thicknesses~~Joint ~~and~~Venture ~~grades~~Agreement with the goal of ~~gold~~reducing ~~mineralization~~our ~~encountered~~future inequity ~~the~~financing ~~drilling~~needs ~~program,~~to ~~eliminating~~support ~~any~~our future ~~concession~~development ~~payments~~of onthe ~~these~~Cieneguita ~~properties~~Project.

InAfter ~~May~~the ~~2009,~~term weof ~~entered~~the ~~into~~pilot aproject ~~letter~~ends, ofthe ~~agreement~~Company will earn 80% and inMRT ~~July~~will ~~2009,~~earn we20% ~~signed~~of the ~~definitive~~net ~~agreement~~cash toflow ~~sell~~interest ~~our~~earned ~~Guazapares~~from ~~project,~~the ~~located~~extraction inand ~~south~~processing ~~western~~of ~~Chihuahua,~~mineralized ~~Mexico~~material tofrom ~~Paramount~~the ~~Gold~~Cieneguita ~~de Mexico~~Project, SAif ~~de C.V.~~any, ~~and~~whether ~~the~~by ~~Mexican~~extension ~~subsidiary~~ of ~~Paramount~~the ~~for~~pilot aoperation ~~total~~thereafter ~~consideration~~operated ofby upthe toCompany, ~~$5.3~~or ~~million.~~from ~~The~~the ~~Guazapares~~development ~~Project is comprised~~ of 12a ~~claims~~much ~~close~~larger, tocommercial ~~Paramount’s San Miguel discovery~~operation. The ~~purchase~~final ~~price~~results isof tothe bePEA ~~paid~~are inexpected ~~two~~to ~~stages,~~be ~~with~~released during the ~~first~~second ~~payment~~quarter of $32013.7 ~~million~~We ~~released~~have ~~from~~summarized ~~escrow~~some inof ~~February 2010, as~~ the ~~transfer~~preliminary ofwork from the 12PEA ~~claims~~ to ~~Paramount~~date, ~~was~~which ~~completed.~~can Anbe ~~additional~~found ~~payment~~on ofour $1website, www.6panamgoldfields.com, ~~million~~under isthe ~~due~~“Recent ifNews” section, byMarch ~~July 10~~13, ~~2012,~~2013. ~~either~~We ~~(i)~~believe ~~Paramount~~the ~~sells~~preliminary ~~its~~data ~~Mexican~~supports ~~subsidiary~~a ordecision ~~(ii)~~to ~~Guazapares~~proceed iswith ~~put~~the ~~into~~completion ~~production.~~of ~~The~~a ~~definitive~~full ~~agreement~~feasibility ~~closed~~study into ~~October~~show ~~2009~~the ~~and~~potential aof 5the Cieneguita Project.7% ~~commission~~We, ~~was~~however, ~~paid~~can onmake ~~the~~no ~~closing~~assurances ofregarding the ~~sale.~~final Asresults of ~~July~~the 18PEA, ~~2012,~~which ~~none~~is ofbeing ~~the~~conducted ~~two~~by ~~events~~a ~~had~~third-party ~~occurred~~engineering firm.

For the fiscal year ending February 28, 2014, our current operating budget is based on receiving a minimum of $1,200,000 from the pilot project. We believe we will receive more than $1,200,000 from the operations of the pilot project, but we have prepared a conservative operating budget to allow for unexpected operating issues at the pilot project. In the event we do not receive the projected amount from our pilot project, we will have to raise additional capital through the sale of securities or other methods of financings to meet our projected working capital requirements. We may also need capital to pay our outstanding accounts payable or to pursue a feasibility study for the Cieneguita Project.

In ~~February~~the ~~2009,~~event wethat ~~entered~~the ~~into~~PEA shows a ~~development~~mineral ~~agreement~~deposit ~~with~~at ~~MRT, which we amended in December 2009. Pursuant to~~ the ~~terms~~Cieneguita Project, of ~~the~~which ~~development~~there ~~agreement,~~is asno ~~amended~~guarantee, ~~MRT~~we ~~has~~would ~~agreed~~need to ~~invest~~raise upadditional tocapital ~~$8 million~~ to ~~initiate~~prepare ~~the first phase of production and to complete~~ a feasibility study onand put the Cieneguita Project. ~~The~~into ~~first~~production, ~~phase~~if ofso ~~production~~warranted, isor, ~~limited~~alternatively, topursue the ~~mining~~possibility of ~~the~~selling ~~mineralized material that is available from~~ the ~~surface~~property. toThe aamount ~~depth~~ of 15additional ~~meters~~capital ~~(“First Phase Production”). In exchange,~~ we ~~assigned~~would ~~MRT~~need ais ~~74%~~indeterminable ~~interest~~at ofthis ~~the~~time ~~net~~until ~~cash~~we ~~flows~~receive ~~from First Phase Production and a 54% ownership interest in~~ the ~~Cieneguita~~final ~~Project~~PEA results.

ToIn ~~fund~~the ~~our~~event ~~continued~~that ~~operations,~~ we ~~issued~~should ~~$1.5~~find million of convertible debentures in March 2009, of which an aggregate of $880,000 was issued to Mario Ayub, one of our former directors, and to his affiliated entity, MRT. Pursuant to the terms of the convertible debentures, the holders irrevocably converted the debentures into a ~~10%~~mineable ~~ownership~~reserve ~~interest~~at in the Cieneguita ~~project and a 10% interest in the net cash flow from First Phase Production. In December 2009~~Project, ~~Mario~~it ~~Ayub~~is ~~and~~management’s ~~MRT~~intention ~~agreed~~ to ~~resell~~contract ~~an aggregate 4% ownership interest in~~ the ~~Cieneguita~~mining ~~project~~and ~~back~~milling ~~to us, along with 4%~~ of ~~the~~any ~~net~~mineralized ~~cash~~reserves ~~flow~~out ~~from~~to ~~First~~third ~~Phase Production, in return for $550,000~~parties. InWe ado ~~private transaction~~ not ~~involving~~have ~~us,~~any ~~the~~known ~~other~~reserves ~~holders~~at ~~contributed~~this ~~their~~time ~~remaining~~at ~~6% ownership interest in~~ the Cieneguita ~~project to Marje Minerals~~Project.

AsExploration aProjects ~~result~~– ofCurrent ~~our~~Status amended development agreement and our agreements with the debenture holders, the ownership interest in the Cieneguita Project and the net cash flows from the First Phase Production are held by us, MRT and Marje Minerals as follows:

Holder	Ownership Percentage	Net Cash Flow Interest From First Phase Production	Net Cash Flow Interest Following First Phase Production
MRT	54%	74%	54%
Marje Minerals	6%	6%	6%
Pan American	40%	20%	40%

Our exploration activities in 2012 focused on the Cieneguita Project. A small reconnaissance drill program was completed in the Piedras Blancas area, approximately 500 meters south of the Cieneguita deposit. The best intercept was hole SM-06 with 39 meters averaging approximately 0.84 g/t Au eq. The next phase of drilling is to focus on the Cieneguita deposit and will consist of infill drilling and defining the southeastern boundaries of the Cieneguita deposit.

~~Any~~In ~~additional~~December ~~costs~~2011, ~~for~~we hired Dr. Fedor Zhimulev, MSc., PhD Honors as our chief geologist. He was a former senior researcher at the ~~First~~Sobolev ~~Phase~~Institute ~~Production~~of Geology and ~~the~~Mineralogy ~~feasibility~~and ~~study~~has ~~for~~extensive ~~the~~experience ~~Cieneguita~~conducting ~~Project~~fieldwork. From 2009 to 2011, ~~after~~he ~~MRT~~was ~~invests~~appointed $8as ~~million,~~leader ~~will~~of bethe ~~shared~~Sobolev byInstitute’s ~~us,~~Junior ~~MRT~~Scientists Community, and ~~Marje~~last ~~Minerals~~year onwas aawarded ~~pro-rata~~the ~~basis~~Academican ~~based~~Sobolev onprize ~~their~~for ~~respective~~junior ~~ownership~~scientists ~~percentages~~from inthe Siberian Branch of the ~~Cieneguita~~Academy ~~Project~~of Sciences. Dr. Zhimulev will work with Alexander Becker PhD, who retains actual management of our exploration programs.

~~The~~We ~~major~~have ~~terms~~conducted a series of ~~the~~exploration ~~development~~programs ~~agreement~~at Cieneguita since March 2007. The drilling exploration program commenced in December 2007 with ~~MRT~~one drill rig and ~~Marje~~a ~~Minerals~~second ~~are~~rig aswas ~~follows~~added in July 2008. The drilling was completed in December 2008. The figure below shows the location of the 103 diamond drill holes on the Cieneguita Project:

~~• MRT purchased $1 million of secured convertible debentures at 8% interest (payable in stock or cash).~~ The ~~proceeds~~figure ~~from~~below ~~this~~shows ~~investment~~the ~~were~~main ~~used~~mineralization ~~for~~zones ~~continued~~our ~~exploration~~drilling ~~and~~work ~~development~~identified ofat the Cieneguita Project ~~and general working capital~~. InAreas ~~November~~in ~~2009,~~red ~~MRT exercised its conversion rights~~ on the ~~debenture~~figure ~~and~~represent ~~MRT~~zones ~~was~~exhibiting ~~issued~~mineralization ~~3,333,333~~areas ~~common~~where ~~shares~~grades ~~and a warrant to purchase~~ are>1~~,666,667 shares of common stock at an exercise price of $0~~.505 ~~per~~g/t ~~share~~Au.

• MRT agreed to provide the necessary working capital to begin and maintain mining operations, estimated to be $3 million, to put the first phase of the Cieneguita Project into production. In exchange for these funds, we assigned MRT an interest to 74% of the net cash flow from First Phase Production. The agreement limits the mining during First Phase Production to the mineralized material that is available from the surface to a depth of 15 meters.

• MRT committed to spend up to $4 million to take the Cieneguita Project through the feasibility stage. In doing so, we assigned MRT a 54% interest in our rights to the Cieneguita Project. After the expenditure of the $4 million, all costs will be shared on a pro-rata ownership basis (i.e. 54% to MRT, 40% to us and 6% to Marje Minerals). If any party cannot pay its portion of the costs after the $4 million has been spent, then their ownership position in the Cieneguita Project will be reduced by 1% for every $100,000 invested by the other owners. Our ownership interest in the Cieneguita Project, however, cannot be reduced below 25%. In addition, we have the right to cover Marje Minerals’ pro rata portion of costs if they cannot pay their portion of the costs. In return, we will receive 1% of Marje Minerals’ ownership position in the Cieneguita Project for every $100,000 we invest on their behalf.

• The MRT agreement was contingent on our repaying a debenture to Paramount. In March 2009, we repaid $1 million, or approximately two-thirds of the debt, and Paramount released a security interest it had on the Cieneguita Project. In October 2009, we repaid the remaining amount of the debt, and Paramount released its security interests on the Sahuayacan, Guazapares and Encino Gordo properties.

In September 2011, we entered into the Agreement with MRT and Marje Minerals pursuant to the Letter Agreement of June 2011, concerning the restructuring of the amended development agreements between the parties, including their respective ownership interests in our Cieneguita project.

We receive 20% of the net operating profits after royalties for material processed through a small-scale pilot operation and mined from the first 15 meters depth of the Cieneguita deposit until December 31, 2012. For all other material processed from the property, our interest is 80% and MRT is reduced to a 20% working interest, subject to certain dilution provisions.

~~Under the agreement, the parties agreed to restructure their respective ownership interests in the~~ Cieneguita ~~project~~Preliminary asEconomic ~~follows:~~Assessment (PEA)

Holder	Ownership Percentage	Net Cash Flow Interest From First Phase Production	Net Cash Flow Interest Following First Phase Production
MRT	20%	74%	20%
Marje Minerals	0%	6%	0%
Pan American	80%	20%	80%

We commenced work on the Cieneguita PEA compliant with Canadian National Instrument 43-101 in October 2011. We retained M3 Engineering, Tucson, Arizona, based on the firm’s extensive recent and relevant experience with mining projects in Mexico.

~~Pan~~In ~~American~~June 2013, we finalized and ~~MRT~~released ~~shall~~the PEA which can be ~~responsible~~found ~~for~~on ~~the~~our ~~cost~~website, ofwww.panamgoldfields.com, with additional information summarized under the ~~feasibility~~“Recent ~~study~~News” onsection, June 12, 2013 and March 13, 2013. We believe the data supports a ~~pro~~decision ~~rata~~to ~~basis~~proceed ~~based~~with onthe ~~our~~completion ~~respective~~of ~~amended~~a ~~ownership~~full ~~percentages~~feasibility study to show the potential of the Cieneguita Project. The PEA confirms that the Cieneguita project represents an exceptional opportunity to develop a highly economic, relatively low-cost mine in the prolific Sierra Madre gold and silver belt in Mexico. A summary of the key findings of the PEA include:

On· ~~September~~The 5,PEA ~~2012,~~considers ~~the~~an ~~Company~~open ~~entered~~pit ~~into~~mining aoperation ~~Second~~using ~~Amended~~an ~~and~~operator ~~Restated~~owned ~~Development~~mining ~~Agreement~~fleet ~~with~~which ~~MRT~~feeds ~~related~~mineralized material to ~~the~~an ~~mineral~~adjacent ~~exploration,~~flotation ~~production~~plant and ~~development~~cyanide ofleach ~~the~~facility ~~Company’s~~with ~~Cieneguita~~dry ~~Project.~~stack ~~Under~~tailings ~~the~~disposal. ~~Second~~A ~~Amended~~processing ~~and~~rate ~~Restated~~of ~~Development Agreement~~15,000 ~~the~~tonnes ~~Company’s~~per ~~share~~day of(“tpd”) ~~net~~provides ~~cash~~for ~~flow~~an ~~from~~11 ~~the~~year ~~pilot~~mine ~~project~~life ~~operated~~while byprocessing ~~MRT~~a ontotal ~~the~~of ~~Cieneguita project increases from 20% to 29% beginning retroactive to March 1, 2012 through December 31, 2012~~56.7 ~~Beginning~~million ~~January~~tonnes ~~1, 2013 through December 31, 2013, the Company’s share~~ of ~~net~~material ~~cash flow~~ from ~~the~~an ~~pilot~~open ~~project~~pit ~~increases~~with toa ~~35%.~~low Atoverall ~~all~~stripping ~~times,~~ratio ~~the~~of ~~Company retains its 80% ownership interest in the entire Cieneguita Project~~1.2 ~~This~~to ~~agreement eliminates the additional fees previously payable by MRT for minerals mined below the first 15 meters~~1.

~~The~~· ~~Second~~Forecast ~~Amended~~life ~~and Restated Development Agreement extended the date~~ of ~~the~~mine ~~pilot~~(“LOM”) ~~project~~production ~~from~~is ~~December 31~~509,000 ~~2012~~ounces togold ~~December~~and ~~31, 2013~~55.5 ~~MRT~~million ~~may~~ounces ~~terminate~~silver, ~~the~~or ~~pilot~~1.50 ~~project~~million byounces ~~providing~~of ~~the~~gold ~~Company~~equivalent, ~~with~~worth ~~ninety~~a ~~(90)~~total ~~days~~of ~~advanced~~about ~~written~~$2.10 ~~notice~~billion, ~~and~~using the ~~Company~~base ~~may~~case ~~terminate~~metal ~~the~~prices ~~pilot project upon an uncured breach~~ of ~~the~~$1,400 ~~Second~~per ~~Amended~~ounce gold and ~~Restated~~$25 ~~Development~~per ~~Agreement~~ounce ~~by MRT~~silver.

In· ~~December~~The ~~2011,~~average weannual ~~hired~~LOM ~~Dr.~~production ~~Fedor~~is ~~Zhimulev~~forecast asto ~~our~~be ~~chief geologist. In September 2009~~46,300 weounces ~~hired~~of ~~George~~gold ~~Young as our chief operating officer, Salil Dhaumya as our chief financial officer~~ and ~~Manuel Flores as our operations manager~~5.05 Inmillion ~~November~~ounces ~~2009, Mr. Young was appointed president upon the resignation~~ of ~~Francisco “Barry” Quiroz. In October 2010~~silver, weor ~~appointed Miguel F. Di Nanno as president replacing Mr. Young. Other than these employees~~136,500 ~~all~~ounces of ~~the~~gold ~~employees we hire are contracted from third parties specializing in providing employees for Mexican companies~~equivalent. In using third party contractors we minimize our exposure to Mexican employment law and all liabilities are undertaken by the third party contractors providing the services. We pay a flat rate to the third parties for their services.

~~Our~~· ~~continued~~Average ~~existence~~annual ~~and~~production ~~plans~~in ~~for~~the ~~future~~first ~~growth~~three ~~depend~~years onof ~~our~~operation ~~ability~~is toforecast ~~obtain the additional capital necessary~~ to ~~operate~~be ~~either~~64,000 ~~through~~ounces ~~the~~gold ~~generation~~and of6.84 ~~revenue~~million orounces ~~the~~silver, ~~issuance of additional debt~~ or ~~equity. Additionally~~186,200 ifounces ~~our~~gold ~~exploration during that time period is successful~~equivalent, weor ~~may~~about ~~need~~36% topercent ~~raise~~higher ~~additional~~than ~~capital~~the toaverage ~~fund~~LOM ~~those~~annual ~~exploration programs. At this time~~production, wethrough ~~cannot~~mining ~~assess~~of ~~with~~a ~~any~~shallow, ~~accuracy~~higher-grade ~~our~~core ~~total~~of ~~capital~~the ~~needs~~deposit toin ~~fund~~the anearly ~~expanded~~years ~~exploration~~of ~~program~~the ~~beyond our basic program~~operation.

~~For~~· ~~the~~Estimated ~~12-month~~cash ~~period~~operating ~~from~~costs ~~September~~are ~~2012~~estimated ~~through~~to ~~August~~average ~~2013,~~$518 inper ~~order~~ounce togold ~~not~~equivalent ~~depend~~for onthe ~~income~~first ~~from~~three ~~our~~years ~~pilot~~of operation atand ~~the~~$701 ~~Cieneguita~~for ~~mine~~the welife ~~will~~of ~~need~~the tomine, ~~raise~~with ~~additional~~LOM ~~capital~~average toannual ~~maintain~~pre-tax ~~operations.~~net Weoperating ~~will~~income ~~need a minimum~~ of $~~2,400,000,~~97.1 ofmillion ~~which~~and $1.0507 ~~million~~billion ~~was recently raised in cash~~LOM, ausing ~~portion~~base ofcase ~~which~~metal ~~will be for general and administrative costs~~prices. ~~This does not include any capital needed to pay our accounts payables and to execute our exploration programs as detailed below.~~

In· ~~the~~Initial ~~event~~start-up ~~that~~capital wecosts doincluding ~~discover~~working acapital ~~mineral~~and ~~deposit~~owner’s oncosts ~~one~~are ofestimated ~~our~~to ~~properties,~~be of$484 ~~which there is no guarantee~~million, weincluding ~~would~~a ~~need~~25% tocontingency ~~expend~~($81.6 ~~substantial~~million). ~~amounts~~Sustaining ofLOM capital tocosts ~~put~~are ~~any~~estimated ofat ~~our properties into production, if so warranted~~$20.5 ~~The amount of such expenditures is indeterminable at this time as our exploration and development program has not advanced far enough to provide us with results to determine this information~~million.

~~Such~~· ~~expenditures~~Using ~~depend~~base ~~upon~~case ~~the~~metal ~~size~~prices of the ~~mineralized~~PEA ~~body,~~indicates the ~~grade~~Cieneguita ofproject ~~the~~has ~~mineralized~~a ~~body~~pre-tax ~~and~~Internal ~~the~~Rate ~~type~~ of ~~mining~~Return ~~that~~(“IRR”) isof ~~required to extract any minerals that may be found~~22. ~~Regardless~~4%, wea dopayback ~~not~~of ~~have~~3.0 ~~enough~~years ~~capital~~and ~~available~~a toNet usPresent toValue ~~make~~at ~~any~~an ~~such~~8% ~~expenditure~~discount ~~that~~rate ~~would~~(“NPV8”) beof ~~required~~$248 tomillion. ~~put~~The ~~any~~project ~~mineral~~is ~~property~~leveraged ~~into production, and we therefore would have~~ to ~~raise~~higher ~~the~~metal ~~additional~~prices ~~capital~~with ~~or, if possible, enter into a joint venture for~~ the ~~production~~pre-tax ~~phase.~~IRR Ifrising ~~we were~~ to ~~form a joint venture~~32.6%, weand ~~cannot assess what our final position in~~ the ~~Project~~NPV8 ~~would~~increasing ~~be.~~to We$462 domillion ~~not~~using ~~have~~recent ~~any~~metals ~~sources~~prices of ~~capital~~$1,600 ~~available~~per toounce usgold atand ~~this~~$30 ~~time~~per toounce ~~fund~~silver, ~~such~~while athe ~~Project~~payback ifdecreases ~~one~~to ~~should~~2.4 ~~be discovered~~years.

In the event that we should find a mineable reserve, it is management’s intention to contract the mining and milling of any mineralized reserves out to third parties. We do not have any known reserves at this time.

~~Exploration~~Additional ~~Projects~~information –on ~~Current~~the ~~Status~~Cieneguita project PEA, including a financial results analysis, is available on our website www.panamgoldfields.com.

To date the exploration program had been focused on preparing the Cerro Delta, Argentina exploration project for a drill program that was scheduled to begin in in the winter of 2012 - 2013. However, during the past year the political and working environment in Argentina has deteriorated significantly, as has the financial environment and the ability to fund Maricunga belt projects. Due to these factors, the Company has decided to freeze spending at the Argentina project

In December 2011, we hired Dr. Fedor Zhimulev MSc. PhD Honors as our chief geologist while actual management of exploration programs will be under the guidance of Dr. Alexander Becker PhD. He was a former senior researcher at the Sobolev Institute of Geology and Mineralogy and has extensive experience conducting fieldwork. In 2009 -2011 he was appointed as leader of the institute’s junior Scientists Community and last year was awarded the Academican Sobolev prize for junior scientists from the Siberian Branch of the Academy of Sciences.

In December 2011, a geological advisor team visited the Cerro Delta project area. The team was headed by Dr. Aleksandr Borisenko and composed of Dr. Alexander Becker, board advisor, and geologist Dr. Fedor Zhimulev.

Dr. Borisenko is the head of the ore-deposit geology department at Novosibirsk State University in Russia. He is a Doctor of Geology and Mineralogy and the Deputy Director on Scientific Work of the Sobolev Institute of Geology and Mineralogy, Siberian Branch of Russian Academy of Sciences where approximately 680 researchers work under his direction. His work resulted in the discovery of a 3.8 billion ounce silver belt in Mongolia and the Central Khangai gold-belt also in Mongolia.

The map below shows the location of the Cieneguita Project in the Sierra Madre Sierra region of the State of Chihuahua, Mexico.

Cerro Delta Exploration

As discussed above, due to the significantly deteriorating political and working environment in Argentina and the difficulty to fund Maricunga belt projects, the Company has frozen all spending in Argentina.

The map below indicates the location of our Cerro Delta Project:

Over the next 12 months, we intend to explore our one project, Cieneguita, to determine whether there are economically attractive concentrations of gold and gold-silver mineralization. We intend to hire additional employees but do not plan to make any purchase of equipment over the next 12 months. At this time, though, the exploration program is only planned for the next 12 months, which we will undertake when the necessary capital becomes available to complete these programs. We do not have any sources of capital identified at this time and no assurance can be given that we will be able to complete the proposed exploration program.

Cieneguita

The main exploration activities for the Cieneguita Project are described below:

• 100 diamond drill holes completed for a total of 20,215 meters of drilling;

• Broad mineralized intercepts identified, including 111.5 meters with 1.24 g/t Au, 99.6 g/t Ag, 0.45% Pb and 0.73% Zn (Drill Hole C-21) and 94 meters with 1.21 g/t Au, 79.8 g/t Ag, 0.78% Pb and 1.2% Zn (Drill Hole CI-30);

• Mineralization has been traced over 900 meters along strike and still remains open to the southwest and to depth; and

• Infill drilling program designed to identify size of the mineralized material.

We have conducted a series of exploration programs at Cieneguita since March 2007. The drilling exploration program commenced in December 2007 with one drill rig and a second rig was added in July 2008. The drilling was completed in December 2008. The figure below shows the location of the 100 diamond drill holes on the Cieneguita Project:

This figure is showing the geological units and distribution of the 100 drill holes.

Assay results and an analysis of the drilling and exploration work are compiled and described in our NI 43-101 technical report on the Cieneguita project, which was completed following the end of fiscal 2010, and is in compliance with the standards and requirements of Canadian security regulatory authorities. The NI 43-101 report is also available on our website, www.panamericangoldfields.com.

The figure below shows the main mineralization zones our drilling work identified at the Cieneguita Project. Areas in red on the figure represent zones exhibiting mineralization areas where grades are >1.5 g/t Au.

Planned Exploration

The recent exploration activities in Cieneguita have shown that additional exploration is warranted. Considering the latest results and findings the proposed work program for Cieneguita will include:

1. Completing the infill drilling program by doing an additional 10,000 meters of drilling to further identify and support mineralization zones;

2. Continue conducting metallurgical tests; and

3. Complete a Preliminary Economic Assessment and a feasibility study;

The proposed 2012 exploration budget for the Cieneguita project totals $790,000 to be primarily used for the funding of a PEA of the economics for a larger scale of gold and silver production that is currently occurring. The PEA has been initiated by us and is being conducted by M3 Engineering. It is anticipated that the results of the PEA will be available in the first quarter of 2013.

There are no known reserves on the Cieneguita property.

Encino Gordo

In May 2012, we transferred the concessions at the Encino Gordo project located in the Barranca region of Chihuahua State in Mexico, which included two concessions owned by us and two additional concessions we had the option to acquire, to MRT. In connection with the transfer, MRT paid $100,000 cash, waived $200,000 in payments the Company owed to MRT in connection with the Encino Gordo Project and agreed to assume all of the Company’s obligations related to the transferred concessions. The Company’s Board of Directors determined to transfer the concessions in order to focus its resources on completing the PEA study for the Cieneguita Project

Cerro Delta Project

The main exploration activities for the Cerro Delta have included soil sample and rock chip samples. Assay results and an analysis of the exploration work were compiled and described in our recently filed NI 43-101 for Cerro Delta, and is in compliance with the standards and requirements of Canadian security regulatory authorities. The NI 43-101 report is also available on our website, www.panamericangoldfields.com.

New Properties-Target Generation and Growth Strategy

A fundamental component of our business strategy is to advance all of our properties to the drilling stage and implement a strong generative and property acquisition program through a well-established and consistent financial and funding process.

Our goal is to establish a pipeline of two new drill-stage or near-to-drill stage projects per year. Our proposed exploration program consists of two main components:

• Create a pipeline of quality properties providing a steady stream of new prospects and/or projects to explore, contract-out and/or enter into development agreements with other mining companies in South America, Mongolia and Central Asia.

• Focus on large-sized prospects (minimum size 5,000,000 ounces gold-equivalent).

The proposed exploration program is being undertaken by our exploration team using in-house knowledge along with the support and guidance of consultants with expertise in these regions. We believe our existing management team and key advisors have the necessary exploration and mining expertise to locate, evaluate and bring mining properties to production.

We are continuing to evaluate potential new projects, but we currently do not have sufficient funds to implement our strategy of establishing two new drill-stage or near-to-drill stage projects per year.

Objectives

• Identify two to four target areas (approximately 20 x 30 kilometers) which have potential to host small- to medium-size gold and/or gold-silver deposits.

• Identify one or two specific opportunities with close to drill ready targets. For example, identify old workings or existing mines with good upside potential.

• Time frame: six months.

Key Steps and Exploration Tools

After initial evaluations of potential gold and gold-silver deposits, it has become evident that the acquisition and evaluation of more detailed geological maps and geochemistry with field follow-up is critically important in identifying new areas of mining potential. Careful and selective use of such data may be the most immediate and cost-effective way to focus exploration efforts toward prospective gold-silver areas.

Key steps may include mainly the following activities, among other considerations:

		•	Acquiring geological maps 1:250,000 and 1:50,000 (from Servicio Geologico Mexicano and Servicio Geologico Minero de Argentina);
		•	Generating geological and mineral occurrences base maps;
		•	Identifying key host rocks;
		•	Completing structural interpretation from known geology, TM imagery, and geophysical data (if available);
		•	Integrating mineral occurrences, alteration, lithology and structures;
		•	Completing initial targeting using the above compilation; and
		•	Selecting and prioritizing targets.

We do not have the necessary working capital at this time to implement this target generation program.

RESULTS OF OPERATIONS

Three ~~and nine~~ months ended ~~November~~May 3031, ~~2012~~2013 compared to the three ~~and nine~~ months ended ~~November~~May 3031, ~~2011~~2012.

In this discussion of the Company’s results of operations and financial condition, amounts, other than per-share amounts, have been rounded to the nearest thousand dollars.

The pilot project operations being conduct by MRT at our Cieneguita Project produced 2,519 ounces of gold and 210,781 ounces of silver in bulk concentrate during the quarter ended May 31, 2013, compared to and 1,739 ounces of gold and 101,647 ounces of silver in bulk concentrate for the quarter ended May 31, 2012, an increase of 45% and 107%, respectively. The following is the information on the mineralized materials processed and average sale price of metals received for quarters ended May 31, 2013 and 2012:

Mineralized Materials Processed

	Feed Grade (g/t) Au	Feed Grade (g/t) Ag	Recovery (%) Au	Recovery (%)Ag	Minerals Processed (tonnes)	Bulk Concentrate Produced (tonnes)
2013	1.40	115	93.12	94.78	59,992	8,155
2012	1.42	84	88.99	90.57	42,431	3,541

Average Price Received

	Gold (per ounce) $	Silver (per ounce) $	Lead (per tonne) $
2013	1,496.99	24.86	2,029.22
2012	1,612.62	29.43	1,975.68

This information was provided to us by MRT pursuant to the terms of the Joint Venture Agreement. Under the Joint Venture Agreement, MRT is responsible for processing and selling the concentrate from the pilot project. We are entitled to receive 35% of the net cash flows from January 1, 2013 to December 31, 2013 and 80% of the cash flows after December 31, 2013. We do not have any direct agreement with any third party regarding the sale of concentrate from the pilot project being conducted at the Cieneguita Project.

Revenues

~~Pan~~The ~~American~~pilot ~~earned~~project ~~its~~generated ~~29%~~approximately ~~proportionate net cash flows of~~ $21,~~021~~849,000 ~~(November~~in ~~30,~~revenues ~~2011~~allocable -to ~~$561,000)~~us ~~from~~for the ~~joint~~three ~~venture with MRT from the gold production during the nine~~ months ended ~~November~~May 3031, ~~2012.~~2013 ~~Other~~as ~~than~~compared ~~the~~to ~~revenue~~approximately ~~from the joint venture with MRT~~$1,053,000 wefor ~~did not have commercial production of any of our properties in~~ the ~~nine~~three months ended ~~November~~May 3031, ~~2012.~~2013, Wean ~~cannot~~increase ~~provide~~of ~~any~~76%. ~~assurances~~MRT ~~that~~sold weconcentrate ~~will continue to earn revenues of any significance~~ from the ~~joint~~pilot ~~venture~~project ~~with~~and ~~MRT,~~pursuant ifto ~~ever. We are presently in~~ the ~~exploration~~terms ~~stage~~ of ~~our~~the ~~business.~~Joint WeVenture ~~can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties or~~Agreement, ~~if such resources are discovered, that~~ we ~~will~~receive ~~enter~~a ~~into~~portion ~~commercial production~~ of ~~our~~the ~~mineral~~net ~~properties~~cash flows.

~~Operating~~Gross ~~Costs~~Margin

WeOur ~~incurred~~gross ~~operating~~margin ~~costs~~was ofapproximately $~~216~~1,~~000 and $610~~136,000 ~~during~~for the three ~~and nine~~ months ended ~~November~~May 3031, ~~2012~~2013 as compared to ~~$98,000~~approximately ~~and~~ $~~297~~730,000 for the three ~~and nine~~ months ended ~~November~~May 3031, ~~2011~~2012, asan aincrease ~~portion~~ of ~~the~~56%. ~~operating~~The ~~costs~~increase ofwas ~~production~~primarily atattributed ~~Cieneguita~~to inincreased revenues received from the ~~joint~~operations ~~venture~~of ~~with~~the ~~MRT~~pilot project.

General and Administrative Expenses

~~Our~~The ~~operating~~following ~~expenses~~table ~~decreased~~shows togeneral ~~$559,000~~ and ~~$1,473,000~~administrative ~~for~~expenses ~~the~~by ~~three~~operating ~~and~~segment ~~nine~~during ~~months ended November 30, 2012 compared to $1,112,000 and $2,752,000 for~~ the three ~~and nine~~ months ended ~~November~~May 3031, ~~2011.~~2013:

General and administrative expenses increased slightly to $697,000 and decreased to $2,377,000 in the three and nine months ended November 30, 2012 respectively compared to $690,000 and $2,482,000 in the three and nine months ended November 30, 2011. The increase during the current three month period is primarily attributable to higher operating expenses relating to production at Cieneguita. The non-cash stock-based compensation expense amounted to $192,000 and $540,000 in 2012 compared to $196,000 and $922,000 in 2011, for the three and nine months, respectively. The amount for the nine-month period in 2012 had $153,000 of stock-based compensation expense relating to options granted to officers, directors, consultants, $248,000 of stock-based compensation relating to warrants and $138,000 stock-based compensation in the form of shares issued to consultants. The amount for the corresponding period in 2011 relates to stock options granted to officers, directors and consultants in the amount of $272,000, stock-based compensation relating to warrants in the amount of $145,000 and stock-based compensation in the form of shares issued to a consultant in the amount of $269,000.29

Accounting and legal fees of $157,000 in the nine months ended November 30, 2012 was higher as compared to $145,000 in the nine months ended November 30, 2011.

	Mexico		Corporate		Sub total		Cieneguita		Total
							Operations
Selling expenses	$	-	$	-	$	-	$	30,688	$	30,688
Camp costs		-		-		-		78,569		78,569
Strip mining		-		-		-		158,987		158,987
Depreciation		1,954		-		1,954		-		1,954
Consulting fees		-		30,175		30,175		-		30,175
Directors' fee		-		36,000		36,000		-		36,000
Investor relations		-		47,450		47,450		-		47,450
Public company costs		-		18,739		18,739		-		18,739
Management fees		-		58,500		58,500		-		58,500
Office and miscellaneous		42,415		21,114		63,529		133,660		197,189
Advertising and promotion		-		78,030		78,030		-		78,030
Accounting and legal fees		9,170		241,570		250,740		-		250,740
Rent & utilities		3,056		4,500		7,556		-		7,556
Auto expense		696		-		696		-		696
Travel and promotion		361		46,105		46,466		-		46,466
Stock-based compensation		-		61,070		61,070		-		61,070
Total general and administration expenses	$	57,653	$	643,253	$	700,905	$	401,904	$	1,102,809

~~Mineral~~Our ~~exploration~~general inand ~~the~~administrative ~~three~~expenses ~~and~~for ~~nine~~the three months ended ~~November~~May 3031, ~~2012~~2013 ~~increased~~for toall segments were $~~317~~700,~~000~~905 not including expenses incurred by MRT but proportionately allocated to us under the Joint Venture Agreement. These expenses, as set forth in the table above under “Cieneguita operations”, included selling expenses, camp costs, strip mining expenses and $1office and miscellaneous expenses,~~326~~ all of which were directly attributable to the pilot project operations being conducted at our Cieneguita Project,~~000~~ ~~compared~~and amounted to $~~217~~401,~~000~~904. ~~and~~These expenses are deducted by MRT prior to our receipt of the net cash flows from the pilot project. Thus, our net cash flow of $~~217~~734,000 ~~for~~we received from the ~~three~~operations ~~and~~of ~~nine~~the pilot project for the three months ended ~~November~~May 3031, ~~2011,~~2013 asis ~~the~~equal ~~Company~~to ~~had~~our ~~started~~gross amargin ~~preliminary~~of ~~exploration~~$1,136,000, ~~program~~less onthe ~~Cerro~~general ~~Delta~~and ~~project~~administrative inexpenses ~~September~~for ~~2011~~the ~~and~~operations aof ~~PEA~~the ~~report~~pilot onproject ~~Cieneguita~~of $402,000, less certain royalty payments.

~~Loss~~In the three months ended May 31, 2013, our general and administrative expenses was $826,000 compared to $1,103,000 for the three months ended May 31, 2012, an increase of 34%. The increase was primarily due to higher legal fee relating to annual general meeting matters and higher administrative costs in Cieneguita operations. Management fees decreased to $59,000 in the three months ended May 31, 2013 compared to $110,000 in the three months ended May 31, 2012. Office and administration fees increased to $197,000 in the three months ended May 31, 2013 compared to $125,000 in the three months ended May 31, 2012. Stock-based compensation decreased to $61,000 in the current period compared to $259,000 in the prior period. During fiscal 2014, we don’t expect to incur any further general and administrative expenses for other mining properties, as we focus our efforts on developing the Cieneguita Project.

~~Our~~Mineral ~~net loss decreased to $237,000 for the three months ended November 30, 2012 compared to $467,000 for the three months ended November 30, 2011~~ and ~~decreased~~Exploration to $1,070,000 for the nine months ended November 30, 2012 compared to $2,053,000 for the nine months ended November 30, 2011. The decrease in our loss was primarily attributable to higher revenue from sale of gold offset by higher mineral exploration expense.Costs

WeMineral ~~anticipate~~exploration ~~that~~expenses wewere ~~will~~approximately ~~continue~~$288,000 toin ~~incur~~the athree ~~loss~~months ~~until~~ended ~~such~~May ~~time~~31, as2013 wecompared ~~can~~to ~~achieve~~approximately ~~significant~~$645,000 ~~revenues~~for ~~from~~the ~~sale~~three ofmonths ~~gold~~ended ~~recovered~~May ~~from~~31, ~~our~~2012, ~~Mexican~~a ~~mineral~~decrease ~~properties,~~of ~~if ever~~55%. ~~There~~The isdecrease nowas ~~assurance~~due ~~that~~to weabsence ~~will~~of ~~achieve~~expenses ~~any~~relating ~~significant~~to ~~revenues~~the ~~from~~Cerro ~~sale~~Delta ofProject ~~gold~~in the prior period.

34In the three months ended May 31, 2013, we incurred $90,000 in mineral property costs as payments for our Mexican properties. At May 31, 2013, we tested the carrying amounts of all our Mexican properties for recoverability. Based on our tests, we concluded that the sum of undiscounted cash flows expected to result from the use and eventual disposition of all such properties was $nil as the properties have no known reserves. If we are able to raise additional funds to continue with our business plan, we anticipate that exploration expenditures will increase in fiscal 2014 as a result of anticipated exploration activities on our Mexican mineral properties.

Operating Loss

Our operating loss decreased to $345,000 for three months ended May 31, 2013 compared to $901,000 for three months ended May 31, 2012, representing a decrease of 62%. The decrease is primarily attributable to higher revenues from the pilot project and lower mineral exploration expenses.

Interest Expense

Our interest expense increased to $7,000 for three months ended May 31, 2013 compared to $6,000 for three months ended May 31, 2012. The interest expense pertains to loans payable and other charges.

Other Income

Other income decreased to $181,000 for three months ended May 31, 2013 compared to $242,000 for three months ended May 31, 2012, a decrease of 25%. The decrease was primarily attributable to recovery of lower labour costs attributable to the operations of the pilot project incurred by us and recovery of royalty payments paid to Corporativo Minera, on behalf of MRT.

Net Loss

Our net loss decreased to $224,000 for the three months ended May 31, 2013 compared to $702,000 for the three months ended May 31, 2012. The decrease in our loss was primarily attributable to higher revenue from the operation of the pilot project as well as lower mineral exploration costs. The non-cash component of stock-based compensation costs was $61,000 in the three months ended May 31, 2013 compared to $259,000 for May 31, 2012.

We anticipate that we will continue to incur net losses until such time that we can develop reserves and achieve significant revenues from sale of minerals recovered from our Cieneguita Project in a commercial operation, if ever. There is no assurance that we will commence significant commercial operations at our Cieneguita Project or achieve significant commercial revenues.

LIQUIDITY AND CAPITAL RESOURCES

~~Since~~We ~~inception,~~are wein ~~have~~the ~~undergone~~exploration ~~two unsuccessful business combinations~~stage, ~~which~~and have ~~caused~~incurred ~~us to incur~~ significant ~~liabilities~~operating ~~and~~losses ~~have~~since ~~resulted in the accumulation of a substantial deficit during the exploration stage~~inception. AsThe ~~of November 30, 2012, we had~~ total ~~assets~~deficit ofaccumulated ~~$2,228,000,~~during ~~total~~since ~~liabilities~~our ofinception ~~$1,114,000~~in ~~and~~2006 ais ~~deficit of~~ $5052,~~772~~187,000 ~~accumulated during the development stage~~.

Cash and Working Capital

WeAs ~~had cash and cash equivalents~~ of ~~$264,000~~May ~~as of November 30~~31, ~~2012~~2013, ~~compared~~we tohad ~~cash~~total current assets of $~~118~~1,409,000 atand ~~February~~total ~~29,~~current ~~2012~~liabilities ~~and~~of $~~502~~1,~~000 at November 30~~292, ~~2011~~000. WeThis ~~had~~includes ~~working capital of~~ $1109,~~088,~~000 aswe ofhave ~~November~~accrued ~~30,~~for ~~2012,~~contingent ~~compared~~liabilities toin aArgentina ~~working~~and ~~capital~~a ~~deficit~~further of $~~856~~220,000 aswhich ofis ~~February~~the ~~29,~~debt ~~2012~~remaining ~~and~~from ~~working~~the ~~capital~~Company’s ~~deficit~~operations ofin ~~$258,000~~2007 asand ~~of November 30, 2011~~2008.

During the first ~~nine~~quarter ~~months~~ of fiscal ~~2013~~2014, we ~~increased~~were in the ~~activities~~final ~~for~~phase ~~our~~of ~~exploration~~completing ~~program~~the ~~considerably~~PEA and ~~have~~ continued to incur corporate administrative expenses, ~~for which we were unable~~ to ~~raise~~support ~~sufficient funds to pay many of~~ our ~~suppliers~~operations. Our accounts payable, ~~and~~ accrued liabilities ~~decreased~~and current loans payable increased from $1988,~~371,~~000 as ofat February 2928, ~~2012~~2013 to $1,~~124~~292,000 in the first ~~nine~~quarter ~~months~~ of fiscal ~~2013,~~2014. ~~some~~A percentage of ~~which~~the payables are being carried forward from ~~2011.~~the OfCompany’s ~~the~~operations ~~$1,124,000~~prior ~~accounts~~to ~~payable~~2009. ~~and~~The ~~accrued~~Company ~~liabilities~~intends asto offurther ~~November~~reduce ~~30,~~its ~~2012,~~outstanding ~~$267,000~~accounts ~~related~~payable by continuing to ~~exploration~~pursue ~~expenses~~negotiated settlements.

WeFor ~~will require additional financing during~~ the ~~current~~ fiscal year ~~according~~ending toFebruary ~~our~~28, ~~planned~~2014, ~~exploration activities. We have initiated~~ our ~~plan~~current tooperating ~~carry~~budget ~~out~~is ~~exploration~~based ~~and administration activities~~ on ~~our~~receiving ~~Mexican~~a ~~and~~minimum ~~Argentine~~of ~~mineral~~$1,200,000 ~~properties~~from in the ~~current~~Cieneguita ~~fiscal~~pilot ~~year~~project. We ~~also~~believe ~~anticipate~~we ~~spending~~will ~~approximately~~receive more than $1,~~500~~200,000 ~~during~~from the ~~next~~operations 12of ~~months~~the onpilot ~~general~~project, ~~and~~but ~~administrative costs. At this time~~ we dohave ~~not~~prepared ~~have~~a ~~the~~conservative ~~necessary~~operating ~~capital~~budget to ~~initiate~~allow ~~the~~for ~~exploration~~unexpected ~~program~~operating ~~and~~issues toat ~~cover~~the ~~general~~pilot ~~and administrative costs~~project.

We ~~will~~may need to raise additional working capital tothrough ~~maintain~~the ~~basic~~sale ~~operations.~~of Weequity ~~plan~~or debt to ~~raise~~pay ~~those~~our ~~funds~~outstanding ~~through~~accounts ~~the~~payable ~~sale~~or ofto ~~equity~~pursue ora ~~debt~~feasibility study for the Cieneguita Project. Other than our ~~definitive~~Joint ~~agreements~~Venture ~~signed~~Agreement with MRT, we do not have any other sources to raise additional capital for us at this time and no assurance may be given that we will be able to find sources to raise additional capital. ~~Failure~~If towe ~~raise~~are ~~any~~unable ~~additional~~to ~~capital~~obtain ~~would~~additional ~~most~~financing ~~likely~~when ~~require~~sought, uswe towill ~~cease~~be ~~operations~~required ~~and~~to ~~abandon~~curtail ~~all~~or ofdelay our ~~exploration~~business ~~properties~~plan.

The amount of working capital could be adversely affected further in the event claims are made against us alleging that certain shares we previously issued pursuant to Form S-8 registration statements constituted an illegal public offering because the company was a “shell company” at the time and, as a result, was not eligible to use Form S-8 for registration of shares under the Securities Act of 1933. In August and October of 2005, we issued shares of common stock to former officer of the company, as compensation for consulting services. The two share issuances were for a combined total of 30,000 shares and each of the share issuances was made pursuant to a registration statement on Form S-8 under the Securities Act of 1933. Although we believed these shares were properly issued, a claim could be made that issuance of the shares constituted an illegal public offering because the company was a “shell company” at the time. Shell companies [i.e. companies which have no or nominal operations and either (i) no or nominal assets; (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets] are not eligible to use Form S-8 for registration under the Securities Act of 1933. If either of these transactions did violate federal securities laws, subsequent purchasers of the shares may have claims against us for damages or for rescission of their purchase transaction and recovery of the full subscription price paid, together with interest. As of the date of this quarterly report, no one has made or threatened any claim against us alleging violation of the federal securities laws. In the event such claims were successfully asserted, there is no assurance that we would have sufficient funds available to pay and it is likely that we would be required to use funds currently designated as working capital for that purpose. That would substantially reduce the amount of working capital available for other purposes and, in that event, we could be forced to cease or discontinue certain operations and to liquidate certain assets to pay our liabilities, including, but not limited to, rescission claims.

Cash Used in Operating Activities

Cash used in operating activities ~~decreased~~amounted to $~~905~~181,000 for the ~~nine~~three months ended ~~November~~May 3031, ~~2012~~2013 compared to $2105,~~061,~~000 used for operating activities in the ~~nine~~three months ended ~~November~~May 3031, ~~2011~~2012. The cash was used infor ~~operating~~general ~~activities~~and ~~was~~administrative ~~primarily~~costs and for ~~general~~the ~~and~~exploration ~~administrative~~programs ~~expenses~~on the properties.

Investing Activities

Cash provided by investing activities amounted to $~~49,000~~nil for the ~~nine~~three months ended ~~November~~May 3031, ~~2012~~2013 compared to cash of $~~nil~~50,000 for the ~~nine~~three months ended ~~November~~May 3031, ~~2011.~~2012 ~~The cash~~ provided by ~~investing~~from ~~activities consisted of~~ sale of equipment.

Financing Activities

Cash provided by financing activities amounted to $1233,~~021,~~000 for the ~~nine~~three months ended ~~November~~May 3031, ~~2012~~2013 compared to ~~cash used by financing activities of~~ $238,~~042,~~000 for the ~~nine~~three months ended ~~November~~May 3031, ~~2011~~2012. Cash provided by financing activities was used to fund our operating and development activities.

We anticipate continuing to rely on equity sales of our common stock or issuance of debt in order to continue to fund our ~~business~~future ~~operations~~development of our Cieneguita Project. Issuances of additional shares will ~~result~~be indilutive ~~dilution~~ to our existing ~~shareholders~~stockholders.

3531

Going Concern

Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern ~~depends~~is dependent upon our ability to generate profitable operations in the future and/ or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

We have a history of operating losses and will need to raise additional capital to fund our planned operations. As at ~~November~~May 3031, ~~2012~~2013, we had working capital of $1117,~~088,~~000 (~~November~~February 3028, ~~2011–~~2013 ~~working~~- ~~capital of~~ $~~258~~44,000) and an accumulated deficit during the exploration stage of $5052,~~772~~187,000 (~~November~~February 3028, ~~2011~~2013 -– $4851,~~347~~963,000). These conditions raise substantial doubt about our ability to continue as a going concern.

There is no assurance that our operations will be profitable. We have conducted private placements of convertible debt and common stock, which have generated funds to ~~satisfy~~support ~~all of the initial cash requirements of~~ our ~~planned~~operations ~~Mexican~~and ~~mining~~development ~~ventures~~efforts. Our ~~continued existence and~~ plans for future ~~growth~~development of our Cieneguita Project depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

Off-Balance Sheet Arrangements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

ITEM ~~4CONTROLS~~4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

~~The~~Under ~~Securities~~the supervision and ~~Exchange~~with ~~Commission defines~~ the ~~term~~participation ~~“disclosure~~of ~~controls~~our ~~and~~management, ~~procedures”~~including toour ~~mean~~principal aexecutive ~~company's~~officer ~~controls~~ and ~~other~~principal ~~procedures~~financial ofofficer, anas ~~issuer~~of ~~that~~the ~~are~~end ~~designed~~of tothe ~~ensure~~period ~~that~~covered ~~information~~by ~~required~~this toreport be(this ~~disclosed~~“Report”)., inwe ~~the~~conducted ~~reports~~an ~~that~~evaluation itof ~~files~~the oreffectiveness ~~submits~~of ~~under~~ the ~~Securities~~design ~~Exchange~~and ~~Act~~operation of ~~1934~~our isdisclosure ~~recorded,~~controls ~~processed, summarized~~ and ~~reported~~procedures, ~~within~~as ~~the~~defined ~~time periods specified~~ in ~~the~~Rules ~~Securities~~13a-15(e) and ~~Exchange~~15d-15(e) ~~Commission’s~~under ~~rules~~the ~~and~~Securities ~~forms.~~Act ~~Disclosure~~of ~~controls~~1934. ~~and~~Our ~~procedures~~disclosure ~~include, without limitation,~~ controls and procedures are designed to ~~ensure~~provide reasonable assurance that the information required to be ~~disclosed~~included ~~by an issuer~~ in ~~the~~our ~~reports that it files or submits under the~~ Securities and Exchange ~~Act~~Commission of(“SEC”) ~~1934~~reports is ~~accumulated~~recorded, processed, summarized and ~~communicated~~reported towithin the ~~issuer’s~~time ~~management,~~periods ~~including~~specified ~~its~~in ~~chief~~SEC ~~executive~~rules and ~~chief financial officers~~forms, orrelating ~~persons~~to ~~performing~~the ~~similar functions~~Company, asincluding ~~appropriate~~our toconsolidated ~~allow~~subsidiaries, ~~timely~~and ~~decisions~~was ~~regarding~~made ~~required~~known ~~disclosure.~~to Wethem ~~maintain~~by ~~such~~others awithin ~~system~~those ofentities, ~~controls~~particularly ~~and~~during ~~procedures~~the inperiod anwhen ~~effort~~this toreport ~~ensure~~was ~~that~~being ~~all~~prepared. ~~information~~Based ~~which~~on ~~it is required to disclose in~~ the ~~reports~~management’s itassessment ~~files~~and ~~under~~review ~~the Securities Exchange Act~~ of ~~1934~~our isfinancial ~~recorded,~~statements ~~processed, summarized~~ and ~~reported~~results ~~within~~for the ~~time~~quarter ~~periods~~ended ~~specified~~May ~~under~~31, ~~the~~2013 ~~SEC's~~we ~~rules~~have ~~and~~concluded ~~forms and~~ that ~~information~~our ~~required~~disclosure tocontrols ~~be disclosed is accumulated~~ and ~~communicated~~procedures towere ~~chief~~effective ~~executive~~as ~~and~~of ~~chief~~the ~~financial~~end ~~officers~~of tothe ~~allow~~period ~~timely~~covered ~~decisions~~by ~~regarding~~this ~~disclosure~~Report.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our certifying officer, to allow timely decisions regarding the required disclosure.

Internal Control over Financial Reporting

Management is responsible for the preparation of the financial statements and related financial information appearing in this Quarterly Report on Form 10-Q. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America. Management is also responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company's internal control over financial reporting is defined as a process designed 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. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) 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 issuer are being made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management, including the chief executive officer and chief financial officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

With the participation of the chief executive officer and chief financial officer, our management evaluated the effectiveness of our internal control over financial reporting as of February 29, 2012 based upon the framework in Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management has concluded that, as of February 29, 2012, we have a material weakness in our internal control over financial reporting. Specifically, management determined that we did not have sufficient personnel resources within the accounting function to segregate the duties and lack of oversight by an audit committee. Accordingly, our internal control over financial reporting is ineffective as of February 29, 2012.

To remediate our internal control weaknesses, management intends to implement the following measures:

• We will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements.

The additional hiring is contingent upon us being sufficiently funded through equity or debt for our continued exploration activities and corporate expenses. Our management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

This interim report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

Changes in Internal Control over Financial Reporting

There ~~were~~have been no changes in our internal control over financial reporting that occurred during ~~the~~our last fiscal quarter, ~~which~~that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Other than disclosed herein, all other sections in Part II are inapplicable to us.

ITEM 1. LEGAL PROCEEDINGS

~~Other~~Neither ~~than~~our asCompany ~~disclosed herein, neither we~~ nor our properties are the subject of any material pending legal proceedings ~~and no such proceeding is known to be contemplated by any governmental authority~~. We are not aware of any legal proceedings in which any of our directors, officers or affiliates, any owner of record or beneficially of more than 5% of any class of our voting securities, or any associate of any such director, officer, affiliate or security holder is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

ITEM 1A. RISK FACTORS

Not applicable.

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

In connection with the Second Amended Agreement, MRT purchased 2,000,000 shares of our common stock at a price of $0.12 per share for net proceeds of $240,000 pursuant to the our private placement Subscription Agreement. We issued the shares to MRT in reliance on exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

As disclosed under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, we are an exploration stage company focused on mineral exploration activities in Mexico through our wholly owned Mexican subsidiary, Sunburst. To help support our exploration activities, in February 2009 we entered into a joint venture agreement with MRT, a mining operator in Chihuahua, Mexico (the “Joint Venture Agreement”). Pursuant to the terms of the Joint Venture Agreement, MRT is our exclusive operator and we do not have any information to disclose pursuant to Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, which require certain safety related disclosures by companies which operate mines regulated under the Federal Mine Safety and Health Act of 1977.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed in reference:

Exhibit Number	Description
31.1	Certification of ~~Principal~~Chief Executive Officer of Pan American Goldfields Ltd. pursuant to Rule 13a-14(a)/ and 15d-14(a).*
31.2	Certification of Chief Financial Officer of Pan American Goldfields Ltd. pursuant to Rule 13a-14(a)/15d-14(a).*
32.1	Certification of ~~Principal~~Chief Executive Officer of Pan American Goldfields Ltd. pursuant to 18 U.S.C. Section 1350.*
32.2	Certification of Chief Financial Officer of Pan American Goldfields Ltd. pursuant to 18 U.S.C. Section 1350.*
101.INS+		XBRL Instance Document
101.SCH+		XBRL Taxonomy Extension Schema
101.CAL+		XBRL Taxonomy Extension Calculation Linkbase
101.DEF+		XBRL Taxonomy Extension Definition Linkbase
101.LAB+		XBRL Taxonomy Extension Label Linkbase
101.FRE+		XBRL Taxonomy Extension Presentation Linkbase

*filed herewith____________________

37* filed herewith

+ XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

InPursuant ~~accordance with~~ to the requirements of the Securities Exchange Act, of 1934 the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: July 22, 2013

Pan American Goldfields Ltd.

/Ss/ ~~Neil~~Emilio ~~Maedel Name: Neil Maedel Title: Chairman Date: January 14, 2013~~Alvarez

38Name: Emilio Alvarez

Title: Chief Executive Officer

(Principal Executive Officer)

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