6-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington D.C.  20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

August 14, 2007

Commission File No.:  0-30308

SOUTHWESTERN RESOURCES CORP.

(Translation of Registrant's name into English)

Suite #1650, 701 West Georgia Street, Vancouver, B.C.  V7Y 1C6

(Address of principal executive office)

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 Form 20-F  Form 40-F X

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [    ]

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [    ]

Please note that pursuant to Rule 12g3-2(d)(1), this registrant, being registered under Section 12 is not eligible for exemption under Rule 12g3-2(b).  Accordingly, the following two questions are not relevant to this registrant and are therefore left blank.

Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 Yes  No

If "Yes" is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): n/a

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant:

SOUTHWESTERN RESOURCES CORP.

By:

/s/ Thomas W. Beattie

Thomas W. Beattie

Vice President, Corporate Affairs

Date:

August 14, 2007

EXHIBIT INDEX

Exhibit No.	Description
99.1	Interim Financial Statements for the period ended June 30, 2007
99.2	Management's Discussion & Analysis for the period ended June 30, 2007
99.3	CEO Certification
99.4	CFO Certification

EX-99.1

SOUTHWESTERN RESOURCES CORP.

AN EXPLORATION STAGE COMPANY

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2007

(Unaudited)

CONSOLIDATED BALANCE SHEETS 
(Unaudited)

				As at
($ in thousands)		June 30				December 31
		2007				2006
ASSETS		(See note 6)
CURRENT
CASH AND CASH EQUIVALENTS	$	28,606			$	57,688
SHORT-TERM INVESTMENT		3,190				5,784
EXPLORATION ADVANCES AND OTHER RECEIVABLES		771				452
		32,567				63,924
OTHER ASSETS		-				75
PROPERTY, PLANT AND EQUIPMENT (NOTE 4)		880				968
MINERAL PROPERTIES (NOTE 5)		53,013				50,555
INVESTMENTS (NOTE 6)		15,443				4,404
	$	101,903			$	119,926
LIABILITIES
CURRENT
ACCOUNTS PAYABLE AND ACCRUED CHARGES	$	1,834			$	2,173
NON-CONTROLLING INTEREST (NOTE 11)		-				10,627
SHAREHOLDERS' EQUITY
SHARE CAPITAL (NOTE 7B)		175,098				179,239
ACCUMULATED OTHER COMPREHENSIVE INCOME (NOTE 7F)		1,499				-
CONTRIBUTED SURPLUS (NOTE 7E)		27,301				23,590
DEFICIT		(103,829	)			(95,703	)
		100,069				107,126
	$	101,903			$	119,926
NATURE AND CONTINUANCE OF OPERATIONS (NOTE 1)

See accompanying notes to consolidated financial statements

2     Southwestern Resources Corp.

CONSOLIDATED STATEMENTS 
of Loss and Deficit 
(Unaudited)

		Three months ended						Six months ended
($ in thousands)		June 30			June 30			June 30			June 30
		2007			2006			2007			2006
EXPENSES
GENERAL AND ADMINISTRATIVE (NOTE 10, 7D)	$	2,244		$	2,181		$	5,099		$	5,428
AMORTIZATION		11			13			23			27
FOREIGN EXCHANGE LOSS		1,088			941			1,192			964
GENERAL EXPLORATION (NOTE 7D)		1,346			829			3,795			1,721
MINERAL PROPERTY COSTS WRITTEN OFF (NOTE 5)		153			494			153			494
LOSS BEFORE UNDERNOTED ITEMS		(4,842	)		(4,458	)		(10,262	)		(8,634	)
INTEREST AND OTHER INCOME		429			607			1,065			1,119
GAIN ON SHARES ISSUED BY AFFILIATED COMPANIES		637			387			637			409
(NOTE 6B)
GAIN ON SALE OF INVESTMENTS (NOTE 6A)		212			435			3,558			435
EQUITY IN OPERATIONS OF AFFILIATED COMPANIES		(426	)		199			(485	)		166
(NOTE 6B)
NET LOSS BEFORE NON-CONTROLLING INTEREST		(3,990	)		(2,830	)		(5,487	)		(6,505	)
NON-CONTROLLING INTEREST (NOTE 11)		-			-			434			-
NET LOSS FOR THE PERIOD		(3,990	)		(2,830	)		(5,053	)		(6,505	)
DEFICIT AT BEGINNING OF PERIOD		(98,569	)		(97,015	)		(95,703	)		(93,340	)
LOSS ON REPURCHASE AND CANCELLATION OF OWN SHARES
(NOTE 7B)		(1,270	)		-			(3,073	)		-
DEFICIT AT END OF PERIOD	$	(103,829	)	$	(99,845	)	$	(103,829	)	$	(99,845	)
LOSS PER SHARE - BASIC AND DILUTED	$	(0.09	)	$	(0.06	)	$	(0.11	)	$	(0.14	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		45,080,458			46,171,101			45,365,553			46,114,926

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS 
(Unaudited)

		Three months ended						Six months ended
($ in thousands)		June 30			June 30			June 30			June 30
		2007			2006			2007			2006
NET LOSS FOR THE PERIOD	$	(3,990	)	$	(2,830	)	$	(5,053	)	$	(6,505	)
OTHER COMPREHENSIVE INCOME:
UNREALIZED LOSS ON AVAILABLE-FOR-SALE INVESTMENT		(1,475	)		-			(324	)		-
COMPREHENSIVE LOSS FOR THE PERIOD	$	(5,465	)	$	(2,830	)	$	(5,377	)	$	(6,505	)

See accompanying notes to consolidated financial statements

Southwestern Resources Corp.    3

CONSOLIDATED STATEMENTS Of Cash Flows (Unaudited)

($ in thousands)	Three months ended						Six months ended
		June 30			June 30			June 30			June 30
		2007			2006			2007			2006
OPERATING ACTIVITIES
NET LOSS FOR THE PERIOD	$	(3,990	)	$	(2,830	)	$	(5,053	)	$	(6,505	)
ITEMS NOT INVOLVING CASH
AMORTIZATION		11			13			23			27
STOCK-BASED COMPENSATION		1,125			1,236			3,878			3,737
GAIN ON SHARES ISSUED BY AFFILIATED COMPANIES		(637	)		(387	)		(637	)		(409	)
NON-CONTROLLING INTEREST		-			-			(434	)		-
GAIN ON SALE OF INVESTMENTS		(212	)		(435	)		(3,558	)		(435	)
MINERAL PROPERTY COSTS WRITTEN OFF		153			494			153			494
EQUITY IN OPERATIONS OF AFFILIATED COMPANIES		426			(199	)		485			(166	)
		(3,124	)		(2,108	)		(5,143	)		(3,257	)
CHANGE IN NON-CASH OPERATING WORKING CAPITAL ITEMS:
INCREASE IN EXPLORATION ADVANCES AND OTHER RECEIVABLES		(130	)		(217	)		(28	)		(197	)
INCREASE IN ACCOUNTS PAYABLE AND ACCRUED CHARGES		338			187			319			101
CASH USED IN OPERATING ACTIVITIES		(2,916	)		(2,138	)		(4,852	)		(3,353	)
INVESTING ACTIVITIES
CASH REDUCTION ON COMMENCEMENT OF EQUITY ACCOUNTING		(15,378	)		-			(15,378	)		-
MINERAL PROPERTY EXPENDITURES		(4,137	)		(5,328	)		(8,739	)		(8,592	)
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT		(71	)		(179	)		(184	)		(370	)
DECREASE IN SHORT-TERM INVESTMENTS		268			-			2,593			-
INCREASE IN INVESTMENTS		-			(5,351	)		(517	)		(5,351	)
SALE OF INVESTMENTS		348			541			5,209			541
CASH USED IN INVESTING ACTIVITIES		(18,970	)		(10,317	)		(17,016	)		(13,772	)
FINANCING ACTIVITY
SHARES (PURCHASED) ISSUED		(2,246	)		582			(7,214	)		1,146
CASH (USED IN) PROVIDED BY FINANCING ACITVITY		(2,246	)		582			(7,214	)		1,146
DECREASE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD		(24,132	)		(11,873	)		(29,082	)		(15,979	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		52,738			59,703			57,688			63,809
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	28,606		$	47,830		$	28,606		$	47,830
CASH AND CASH EQUIVALENTS CONSIST OF:
CASH	$	26,103		$	44,088		$	26,103		$	44,088
SHORT – TERM INVESTEMENTS		2,503			3,742			2,503			3,742
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	28,606		$	47,830		$	28,606		$	47,830

SUPPLEMENTAL CASH FLOW INFORMATION (NOTE 12)

See accompanying notes to consolidated financial statements

4     Southwestern Resources Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2007 All tabular amounts are in thousands of dollars Unaudited

1.NATURE AND CONTINUANCE OF OPERATIONS

The Company is an exploration stage mineral exploration company engaged in the identification, acquisition, evaluation and exploration of mineral properties, especially those with the potential to host gold, silver and base metals, and is currently active in China and Peru. The Company is not in commercial production on any of its mineral properties and, accordingly, it does not generate cash from operations. The Company finances its activities by raising capital through the equity markets.

On July 19, 2007, the Company announced it had determined that there were deficiencies in its control procedures for its Boka Project which resulted in errors in previously reported assay results. Furthermore, the review indicated that the integrity of certain stored drill core samples had been compromised. As a consequence, the Company withdrew all of its previously announced results for the Boka Project and has initiated a detailed review. Such review includes checking and confirming the Company’s database for the Boka Project against the underlying official assay certificates to achieve a validated database. The review is ongoing as at the date of this report and the Company is expected to provide an update in due course.

The consolidated financial statements as at June 30, 2007 do not include any adjustment relating to the recoverability and classification of costs associated with the Boka Project that may be necessary should the Company subsequently determine that its recorded value, $40.9 million at June 30, 2007, has been impaired. The Company can provide no assurance that the ongoing review of the Boka Project will not result in an impairment charge.

The Company and John Paterson have been named in three class-action lawsuits in British Columbia, Ontario and Quebec, where the plaintiffs allege that the Company and Paterson negligently or recklessly misrepresented drilling results, and other data and information relating to the Boka Project. The Company intends to vigorously defend itself against such claims. The consolidated financial statements as at June 30, 2007 do not include any provision for liability that may be necessary should the Company be unsuccessful in defending such claims.

The Company’s continuing operations are dependent upon its ability to either secure additional equity capital or generate cash flow from operations in the future, which is not assured. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary, should the Company be unable to secure additional equity capital or generate cash from operations in the future.

2.BASIS OF PRESENTATION

These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles for interim financial statements and follow the same accounting policies and methods of application as the most recent annual consolidated financial statements dated December 31, 2006, except for the items discussed in note 3 and note 6 below. These financial statements should be read in conjunction with those annual financial statements and notes thereto. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in Canada for complete financial statements. In the opinion of management, all adjustments (consisting primarily of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the three and six month periods ended June 30, 2007 and 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

3.CHANGES IN ACCOUNTING POLICIES

Effective January 1, 2007, the Company adopted two new accounting standards related to financial instruments that were issued by the Canadian Institute of Chartered Accountants. These accounting policy changes were adopted on a prospective basis with no restatement of prior period financial statements. The new standards and accounting policy changes are as follows:

FINANCIAL INSTRUMENTS RECOGNITION AND MEASUREMENT (SECTION 3855)

In accordance with this new standard, the Company now classifies all financial instruments as either held-to-maturity, available-for-sale, held-for-trading, loans and receivables, or other financial liabilities. Financial assets held-to-maturity, loans and receivables and financial liabilities other than those held-for-trading, are measured at amortized cost. Available-

Southwestern Resources Corp.    5

for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income. Instruments classified as held-for-trading are measured at fair value with unrealized gains and losses recognized on the statement of loss.

Upon adoption of this new standard, the Company has designated its cash and cash equivalents as held-for-trading, which are measured at fair value. Exploration advances and other receivables are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued charges are classified as other liabilities, which are measured at amortized cost. Investments in significantly influenced affiliates are classified as held-to-maturity, which are measured at amortized cost. The Company has classified its investments in public companies (other than those that the Company has significant influence in) as available-for-sale and therefore carries them at fair market value, with the unrealized gain or loss recorded in shareholders’ equity as a component of other comprehensive income. These amounts will be reclassified from shareholders’ equity to net income when the investment is sold. Previously, investments in these public companies were carried at cost, less provisions for other than temporary declines in value. This change in accounting policy results in a $3,428,000 increase in the carrying value of investments in public companies as at January 1, 2007, representing the cumulative unrealized gain at that time (see Note 7(f)).

COMPREHENSIVE INCOME (SECTION 1530)

Comprehensive income is the change in shareholders’ equity during a period from transactions and other events and circumstances from non-owner sources. In accordance with this new standard, the Company now reports a consolidated statement of comprehensive income and a new category, accumulated other comprehensive income, in the shareholders’ equity section of the consolidated balance sheet. The components of this new category will include unrealized gains and losses on financial assets classified as available-for-sale. The components of accumulated other comprehensive income for the six month period ended June 30, 2007 are disclosed in Note 7(f).

4.PROPERTY, PLANT AND EQUIPMENT

						As at June 30, 2007
				Accumulated
		Cost		Amortization		Net Book Value
OFFICE AND OTHER EQUIPMENT	$	940	$	641	$	299
COMPUTER EQUIPMENT		1,008		748	$	260
VEHICLES		899		578	$	321
	$	2,847	$	1,967	$	880
				As at December 31, 2006
				Accumulated
		Cost		Amortization		Net Book Value
OFFICE AND OTHER EQUIPMENT	$	931	$	616	$	315
COMPUTER EQUIPMENT		945		714		231
VEHICLES		962		540		422
	$	2,838	$	1,870	$	968

Amortization relating to exploration related assets has been allocated to mineral properties in the amount of $103,603 (June 30, 2006 - $95,437) during the period.

5.MINERAL PROPERTIES

A)

		June 30, 2007		December 31, 2006
CHINA
BOKA	$	40,936	$	35,967
YUNNAN GOLD		860		857
OTHER		596		586
TOTAL CHINA		42,392		37,410

6     Southwestern Resources Corp.

		June 30, 2007		December 31, 2006
PERU
LIAM		5,706		5,138
ACCHA-YANQUE		--		3,108
BAMBAS WEST		--		738
BAMBAS COPPER		1,193		974
ANTAY		647		960
PACAPAUSA		264		262
OTHER		2,811		1,965
TOTAL PERU		10,621		13,145
TOTAL	$	53,013	$	50,555

B)For the period ended June 30, 2007 the significant expenditures were as follows:

		Boka		Liam		Accha-Yanque			Other			Total
BALANCE, BEGINNING OF PERIOD	$	35,967	$	5,138	$	3,108		$	6,342		$	50,555
PROPERTY ACQUISITION, AND MAINTENANCE		6		204		1			133			344
ANALYTICAL		181		13		55			24			273
GEOLOGY		2,342		329		666			426			3,763
DRILLING		2,198		--		981			305			3,484
RESEARCH		15		13		15			13			56
PROJECT ADMINISTRATION		227		9		132			97			465
PROPERTY COSTS WRITTEN OFF		--		--		--			(153	)		(153	)
DECONSOLIDATION OF ZINCORE METALS INC.		--		--		(4,958	)		(816	)		(5,774	)
BALANCE, END OF PERIOD	$	40,936	$	5,706		$ --		$	6,371		$	53,013

For the year ended December 31, 2006, the significant expenditures were as follows:

		Boka		Liam		Accha-Yanque		Other			Total
BALANCE, BEGINNING OF YEAR	$	25,596	$	3,194	$	1,256	$	4,833		$	34,879
PROPERTY ACQUISITION AND MAINTENANCE		17		361		200		534			1,112
ANALYTICAL		346		56		94		135			631
GEOPHYSICS		21		33		--		46			100
GEOLOGY		3,718		1,341		1,152		1,524			7,735
DRILLING		5,820		111		279		28			6,238
RESEARCH		26		15		46		22			109
PROJECT ADMINISTRATION		423		27		81		4			535
PROPERTY COSTS WRITTEN OFF		--		--		--		(593	)		(593	)
COST RECOVERY		--		--		--		(191	)		(191	)
BALANCE, END OF YEAR	$	35,967	$	5,138	$	3,108	$	6,342		$	50,555

See note 1 for description of Boka Project.

During the six month period ended June 30, 2007, expenditures totaling $153,000 were written off relating to various non-core projects in Peru. During the same period in 2006, expenditures totaling $494,000 relating to the Minispata Property in Peru were written off.

6.INVESTMENTS

A)

					June 30, 2007
	Ownership %		Carrying Value		Quoted Market Value
ZINCORE METALS INC. – SIGNIFICANTLY INFLUENCED AFFILIATE	49.4	$	10,049	$	30,480
SUPERIOR DIAMONDS INC.	13.0		2,925		3,981
OTHER INVESTMENTS	--		2,469		2,469
		$	15,443	$	36,930

Southwestern Resources Corp.    7

					December 31, 2006
	Ownership %		Carrying Value		Quoted Market Value
SUPERIOR DIAMONDS INC. – SIGNIFICANTLY INFLUENCED AFFILIATE	14.8	$	1,919	$	3,082
OTHER INVESTMENTS	--		2,485		5,913
		$	4,404	$	8,995

In April 2007, the Company sold 500,000 common shares of Zincore Metals Inc. (“Zincore”) for gross proceeds of $350,000 and recorded a gain of $212,000. This sale caused the Company’s interest in Zincore to be reduced from 50.4% to 49.7% . As a result of the reduction of the Company’s interest and resulting loss of control, the assets and liabilities of Zincore were no longer consolidated in the Company’s balance sheet effective April 1, 2007. The assets and liabilities of Zincore excluded from consolidation and the investment carrying value as at June 30, 2007 are detailed as follows:

CASH	$	15,378
EXPLORATION ADVANCES AND OTHER RECEIVABLES		171
OTHER ASSETS		75
PROPERTY, PLANT AND EQUIPMENT		146
RESOURCE PROPERTIES		5,774
		21,544
ACCOUNTS PAYABLE AND ACCRUED CHARGES		(662	)
NON-CONTROLLING INTEREST		(10,360	)
INVESTMENT AS AT APRIL 1, 2007	$	10,522
SALE OF SHARES		(136	)
EQUITY IN LOSS (APRIL 1, 2007 TO JUNE 30, 2007)		(398	)
GAIN ON DILUTION		61
INVESTMENT AS AT JUNE 30, 2007	$	10,049

During the six month period ended June 30, 2007, the Company sold all of its common shares of Lake Shore Gold Corp. (“Lake Shore”) and recorded a gain of $3,346,000. As well, during the same period the Company purchased 1,361,000 common shares of Superior Diamonds Inc. (“Superior”) at a cost of $517,000. Due to the Company and Superior no longer having a director and president in common, the Company will account for its investment using the cost method instead of the equity method as the Company no longer has significant influence.

B)

				For the three months ended					For the three months Ended
				June 30, 2007					June 30, 2006
		Gain on shares issued by		Equity in operations of			Gain on shares issued by		Equity in operations of
		affiliated companies (i)		affiliated companies (ii)			affiliated companies (i)		affiliated companies (ii)
SUPERIOR DIAMONDS INC.	$	576	$	(28	)	$	387	$	199
ZINCORE METALS INC.		61		(398	)		--		--
	$	637	$	(426	)	$	387	$	199
				For the six months ended					For the six months ended
				June 30, 2007					June 30, 2006
		Gain on shares issued by		Equity in operations of			Gain on shares issued by		Equity in operations of
		affiliated companies(i)		affiliated companies (ii)			affiliated companies (i)		affiliated companies (ii)
SUPERIOR DIAMONDS INC.	$	576	$	(87	)	$	409	$	166
ZINCORE METALS INC.		61		(398	)		--		--
	$	637	$	(485	)	$	409	$	166

I.	Gains on shares issued by affiliated companies arise when the ownership interest of the Company in a significantly influenced or controlled company is diluted as a result of share issuances of the investee company. The Company does not receive any cash proceeds (nor is required to make any payments) from these transactions.
II.	Equity in operations of affiliated companies represents the Company’s share of the net gains or losses for the reporting period in a significantly influenced company.

8     Southwestern Resources Corp.

7.SHARE CAPITAL

A)Authorized unlimited common shares without par value.

B)Issued and outstanding during the period:

											For the six months ended
														June 30, 2007
	Number of					Treasury					Number of Shares
	Shares Issued			Amount		Shares			Amount		Outstanding			Amount
	(000	’s)				(000	’s)				(000	’s)
BEGINNING OF PERIOD	45,895		$	179,571		41		$	332		45,854		$	179,239
SHARES PURCHASED	--			--		931			7,214		(931	)		(7,214	)
CANCELLED SHARES	(759	)		(2,968	)	(759	)		(6,041	)	--			3,073
END OF PERIOD	45,136		$	176,603		213		$	1,505		44,923		$	175,098

														For the year ended
														December 31, 2006
	Number of					Treasury					Number of Shares
	Shares Issued			Amount		Shares			Amount		Outstanding			Amount
	(000	’s)				(000	’s)				(000	’s)
BEGINNING OF YEAR	46,014		$	179,701		80		$	778		45,934		$	178,923
OPTIONS EXERCISED	228			899		--			--		228			899
PRIVATE PLACEMENT	58			556		--			--		58			556
SHARES PURCHASED	--			--		366			3,342		(366	)		(3,342	)
CANCELLED SHARES	(405	)		(1,585	)	(405	)		(3,788	)	-			2,203
END OF YEAR	45,895		$	179,571		41		$	332		45,854		$	179,239

During the six month period ended June 30, 2007, the Company purchased 930,600 of its own common shares for costs totalling $7,213,705 pursuant to its normal course issuer bid. During the same period, 717,600 of these common shares, as well as 41,200 common shares purchased in 2006, were cancelled and resulted in a loss of $3,072,876 being recorded as a charge to deficit.

C)Stock Options

Under the Company’s stock option plan there were 4,227,000 options outstanding at June 30, 2007 with a weighted average price of $10.32. Of the options outstanding, 3,613,750 options were exercisable with a weighted average price of $10.73

	For the six months ended June 30, 2007
	Number of shares			Weighted Average
	(in thousands)			Exercise Price
OUTSTANDING AT BEGINNING OF PERIOD	4,088		$	13.19
GRANTED	1,246		$	7.93
EXERCISED/CANCELLED	(1,107	)	$	18.19
OUTSTANDING AT END OF PERIOD	4,227		$	10.32
EXERCISABLE AT END OF PERIOD	3,614		$	10.73

D)Stock-Based Compensation

As a result of stock options vesting and the amortization of previous grants during the six month period ended June 30, 2007, the Company recognized stock-based compensation expense and included this amount in contributed surplus as follows:

Southwestern Resources Corp.    9

		Three months ended		Three months ended		Six months ended		Six months ended
		June 30, 2007		June 30, 2006		June 30, 2007		June 30, 2006
OFFICE SALARIES	$	297	$	409	$	767	$	1,309
CONSULTING FEES		477		639		1,183		1,803
GENERAL EXPLORATION		351		188		1,592		625
ZINCORE		--		--		336		--
TOTAL	$	1,125	$	1,236	$	3,878	$	3,737

For the six months ended June 30, 2007, the stock-based compensation value was determined using the Black-Scholes option pricing model. A weighted-average grant-date fair value of $3.37 (June 30, 2006 - $5.97) for each option grant was estimated using the following assumptions: no dividends are to be paid; volatility of 53% (June 30, 2006 - 54%); risk free interest rate of 4.0% (June 30, 2006 – 4.0%); and expected life of 3.4 years (June 30, 2006 – 3.5 years).

The fair value computed using the Black-Scholes model is only an estimate of the potential value of the individual options and the Company is not required to make payments for such transactions.

E)Contributed Surplus

		Six months ended June 30, 2007			Year Ended December 31, 2006
BALANCE, BEGINNING OF PERIOD	$	23,590		$	20,115
STOCK-BASED COMPENSATION		3,878			4,855
CANCELLED SHARES		--			(1,290	)
STOCK OPTIONS EXERCISED		--			(309	)
STOCK OPTIONS GRANTED BY SUBSIDIARY		169			219
STOCK-BASED COMPENSATION REMOVED ON		(336	)		--
COMMENCEMENT OF EQUITY ACCOUNTING
BALANCE, END OF PERIOD	$	27,301		$	23,590

F)Accumulated other comprehensive income

		Six Months Ended June 30, 2007
BALANCE AT DECEMBER 31, 2006		$ --
ADJUSTMENT FOR CUMULATIVE UNREALIZED GAINS ON AVAILABLE-		3,428
FOR-SALE INVESTMENTS AT TRANSITION DATE ON JANUARY 1, 2007
REALIZED GAIN ON SALE OF AVAILABLE-FOR-SALE INVESTMENT		(1,605	)
UNREALIZED LOSS ON AVAILABLE-FOR-SALE INVESTMENTS		(324	)
BALANCE AT JUNE 30, 2007	$	1,499

8.RELATED PARTY TRANSACTIONS

During the three and six month periods ended June 30, 2007 and June 30, 2006, the Company paid remuneration to directors and to companies controlled by officers who are also directors. The Company received management fees, which are recorded as other income from Superior, Lake Shore and Zincore. These are companies which are related by way of directors in common and/or by way of a management services agreement as follows:

		Three months ended		Three months ended		Six months ended		Six months ended
		June 30, 2007		June 30, 2006		June 30, 2007		June 30, 2006
REMUNERATION PAID TO OFFICERS / DIRECTORS	$	398	$	113	$	530	$	239
MANAGEMENT FEES RECEIVED	$	90	$	18	$	110	$	36

There was also an amount of $88,743 (December 31, 2006 - $5,669) due to Southwestern from the above mentioned companies at June 30, 2007.

All related party transactions are measured at the exchange amount which is the consideration agreed to between the parties.

10     Southwestern Resources Corp.

9. SEGMENTED INFORMATION

INDUSTRY INFORMATION
The Company operates in one reportable operating segment, being the acquisition and exploration of mineral properties.

GEOGRAPHIC INFORMATION
The Company’s only sources of revenue for the six month period ended June 30, 2007 arose from interest earned on corporate cash reserves and management fees. The Company has non-current assets in the following geographic locations:

		June 30, 2007		December 31, 2006
CHINA	$	42,674	$	37,652
PERU		11,059		13,694
CANADA		15,603		4,656
	$	69,336	$	56,002

10. GENERAL AND ADMINISTRATIVE

		Three months ended		Three months ended		Six months ended		Six months ended
		June 30, 2007		June 30, 2006		June 30, 2007		June 30, 2006
CONSULTING	$	1,029	$	958	$	2,256	$	2,442
SHAREHOLDER INFORMATION		172		129		422		306
OFFICE		218		181		625		441
LEGAL AND ACCOUNTING		145		193		265		319
TRAVEL		118		33		162		120
SALARIES AND BENEFITS		562		687		1,369		1,800
TOTAL	$	2,244	$	2,181	$	5,099	$	5,428

11.NON-CONTROLLING INTEREST

At June 30, 2007, the Company’s non-controlling interest in Zincore was comprised of the following:

		June 30, 2007			December 31, 2006
BALANCE, BEGINNING OF PERIOD	$	10,627			$--
CREATION OF NON-CONTROLLING INTEREST DUE		--			10,844
TO SALE OF SHARES BY SUBSIDIARY
SHARE OF STOCK OPTIONS GRANTED		167			215
SHARE OF NET LOSS OF SUBSIDIARY FOR PERIOD		(434	)		(432	)
LOSS OF CONTROLLING INTEREST		(10,360	)		--
BALANCE, END OF THE PERIOD		$ --		$	10,627

12.SUPPLEMENTAL CASH FLOW INFORMATION

In March 2006, the Company received 444,444 common shares of Superior in settlement for a note receivable valued at $200,000.

13.COMPARATIVE FIGURES

Certain of the comparative figures have been reclassified to conform to the current period’s presentation.

14. SUBSEQUENT EVENT (Except for those subsequent events noted elsewhere in these financial statements.)

On July 23, 2007, the Company adopted a Shareholder Rights Plan (the "Rights Plan"). The Rights Plan is designed to ensure fair treatment for all shareholders in the event of a take-over bid or any other attempt to acquire a controlling interest in the Company. Provisions of the Rights Plan include the limitation on shareholder ownership at 20% of the outstanding common shares in the absence of a take-over bid for all outstanding common shares and a requirement for a take-over bid to be open for a minimum of 60 days. The Rights Plan is effective immediately and must be ratified by shareholders within six months of its adoption date.

Southwestern Resources Corp.    11

EX-99.2

SOUTHWESTERN RESOURCES CORP.

AN EXPLORATION STAGE COMPANY

MANAGEMENT'S DICUSSION AND ANALYSIS

JUNE 30, 2007

SOUTHWESTERN RESOURCES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE 
AND SIX MONTHS ENDED JUNE 30, 2007

This Management's Discussion and Analysis ("MD&A"), made as of August 8, 2007, is integral to and should be read in conjunction with Southwestern Resources Corp.’s (the “Company” or “Southwestern”) unaudited consolidated financial statements for the three and six months ended June 30, 2007 and the Company's audited consolidated financial statements for the year ended December 31, 2006. The Company prepares its consolidated financial statements in accordance with Canadian generally accepted accounting principles. These documents, and additional information relating to the Company, are available for viewing at www.sedar.com. All dollar amounts in this MD&A are expressed in Canadian dollars unless otherwise stated.

FORWARD-LOOKING STATEMENTS

All statements made in this MD&A, other than statements of historical fact, are forward-looking statements. The words "anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "will", "would", "should", "guidance", "potential", "continue", "project", "forecast", "confident", "prospects", and similar expressions typically are used to identify forward-looking statements.

Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the Company's business and the industry and markets in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements due to a number of factors, including but not limited to, the Company's access to additional capital to fund future activities, the loss of mineral properties or the inability to obtain mining licenses, the inherently risky nature of the Company's activities and its lack of experience in bringing an exploration property into production, its ability to repatriate any earnings, foreign exchange fluctuations, the political stability and economic uncertainty of those areas in which the Company carries on operations and the lack of infrastructure in those areas, title risks, the risks and uncertainties associated with joint ventures and the Company's reliance on third parties, statutory and regulatory compliance, the adequacy and availability of insurance coverage, the Company's dependence upon employees and consultants and fluctuations in mineral prices and other risks detailed in the Company's filings with the Canadian Securities Authorities. Reference should be made to the section entitled "Risk Factors" contained in the Annual Information Form of the Company dated March 19, 2007 for a detailed description of the risks and uncertainties relating to the business of the Company. These risks, as well as others, could cause actual results and events to vary significantly. The Company expressly disclaims any intent or obligation to update these forward-looking statements, unless the Company specifically states otherwise.

DESCRIPTION OF BUSINESS

Southwestern is an exploration stage mineral exploration company engaged in the identification, acquisition, evaluation and exploration of mineral properties, especially those with the potential to host gold, silver and base metals, and is currently active in China and Peru. The Company is a reporting issuer in British Columbia, Alberta, Manitoba and Ontario and trades on the Toronto Stock Exchange under the symbol "SWG".

The Company conducts its exploration independently as well as through joint venture agreements. The majority of the Company's joint venture agreements are structured in such a way as to allow an interested party to earn an interest in a project by making certain expenditures on the Company's properties over a period of time. The Company is also involved in exploration through option or earn-in agreements whereby it provides 100% of the funding in order to earn or maintain a controlling interest in a project owned by a third party.

On April 5, 2007, the Company appointed Patrick Downey to its Board of Directors and on July 23, 2007, Mr. Downey resigned to focus on other business commitments.

On July 4, 2007, Timo Jauristo was appointed interim President and Chief Executive Officer ("CEO") following John Paterson's resignation as President, CEO, and Director of the Company on June 19, 2007.

2     Southwestern Resources Corp.

On July 23, 2007, the Company adopted a Shareholder Rights Plan (the "Rights Plan"). The Rights Plan is designed to ensure fair treatment for all shareholders in the event of a take-over bid or any other attempt to acquire a controlling interest in the Company. Provisions of the Rights Plan include the limitation on shareholder ownership at 20% of the outstanding common shares in the absence of a take-over bid for all outstanding common shares and a requirement for a take-over bid to be open for a minimum of 60 days. The Rights Plan is effective immediately and must be ratified by shareholders within six months of its adoption date.

The Company and John Paterson have been named in three class-action lawsuits in British Columbia, Ontario and Quebec, where the plaintiffs allege that the Company and Paterson negligently or recklessly misrepresented drilling results, and other data and information relating to the Boka Project. The Company intends to vigorously defend itself against such claims. The consolidated financial statements as at June 30, 2007 do not include any provision for liability that may be necessary should the Company be unsuccessful in defending such claims.

MINERAL PROPERTIES

CHINA

BOKA PROJECT
On July 19, 2007, the Company announced it had determined that there were deficiencies in its control procedures for its Boka Project which resulted in errors in previously reported assay results. Furthermore, the review indicated that the integrity of certain stored drill core samples had been compromised. As a consequence, the Company withdrew all of its previously announced results for the Boka Project and has initiated a detailed review. Such review includes checking and confirming the Company’s database for the Boka Project against the underlying official assay certificates to achieve a validated database. The review is ongoing as at the date of this report and the Company is expected to provide an update in due course.

The consolidated financial statements as at June 30, 2007 do not include any adjustment relating to the recoverability and classification of costs associated with the Boka Project that may be necessary should the Company subsequently determine that its recorded value, $40.9 million at June 30, 2007, has been impaired. The Company can provide no assurance that the ongoing review of the Boka Project will not result in an impairment charge.

YUNNAN GOLD JOINT VENTURE
The Company, through a wholly-owned subsidiary, and its joint venture partner, Newmont Overseas Exploration Limited, completed evaluation of a 62,000 square kilometre area of interest in Western Yunnan Province, China. In the first quarter of 2007, the joint venture expanded this area of interest to approximately 370,000 square kilometres, focusing mainly within the central Panxi rift underlain by Proterozoic rocks. Part of the exploration program within the expanded area of interest will focus on evaluating gold occurrences in carbonaceous schist and shales. The 2007 program will focus on evaluation of gold in stream geochemical anomalies, and evaluation of numerous known gold occurrences.

PERU

LIAM PROJECT
The Liam Project is a 50/50 joint venture between Southwestern and Newmont Peru Limited and is comprised of 365,000 hectares of exploration concessions, which the Company believes represent the largest single block of exploration ground in Peru. Located in the Tertiary Volcanic Belt of southern Peru, about 170 kilometres northwest of Arequipa, the Liam Project area hosts 14 known gold and silver mineralized zones of various genetic types, some of which are described below, discovered during regional exploration. The area lies within the Peruvian Altiplano at an altitude of 4,470 to 5,370 metres and is accessible by road from the mining town of Orcopampa, which has an airstrip allowing for chartered aircraft access. It is a two-hour drive on maintained gravel roads from Orcopampa to the Liam Project which is also accessible by a network of road systems from Lima.

Cerro Crespo/Cerro Quescha
The Liam joint venture completed 10,000 metres of drilling on this high sulphidation silver-gold project, the results of which indicate that the northwest-southeast trending Cerro Crespo ridge is entirely mineralized. The ridge is comprised of hydrothermal and magmatic breccias containing pervasive alunite and vuggy silica. On the top of the ridge, narrow high-grade silver zones, can be observed in the breccias. The Cerro Crespo mineralized zone was block modelled and preliminary pit shells generated. Under an open pit mining scenario, the waste to ore strip ratio would be very low.

Southwestern Resources Corp.    3

Cerro Queshca is located approximately one kilometre north of Cerro Crespo and is comprised of six zones of outcropping gold/silver mineralization associated with typical high sulphidation vuggy silica. In places, the Queshca gold mineralization is high grade in zones associated with late hematite fracture fillings. Drilling has shown the six zones to be isolated, and these zones are possibly remnants of an eroded much larger high sulphidation epithermal system.

The Company will determine what work is needed to complete a National Instrument 43-101 mineral resource estimate on Cerro Crespo/Queshca, which may include further metallurgical testing.

Numa West
Numa West was discovered in 2006 during regional exploration in the northeast corner of the Liam Project exploration concessions. The joint venture considers Numa West to be a highly significant silver prospect and is working toward initiating the first phase drilling program. Silver and lead/zinc mineralization at Numa West occurs within a 2,500-metre long zone of vertical breccia bodies within limestones, and geochemistry suggests that it is epithermal in nature. The breccia bodies vary from five to 50 metres in width and up to 200 metres long and there is also potential that manto-type mineralized zones occur at depth within favourable horizons. Channel sampling on 25 metre spaced lines was completed over the entire length of the zone, totalling 1,410 samples. Strong silver anomalies correspond to the breccia bodies, which have an average grade of 181 grams per tonne silver, using a 30 gram per tonne silver cut-off. Using a 100 gram per tonne cut-off, the average silver grade is 221 grams per tonne. All of the breccia seen at surface is oxidized and well developed limonite/goethite zones after extensive sulphides are common. Induced polarization geophysics was completed over the zone and suggests that the bodies have considerable depth extent. A ten-hole first phase diamond drill program is planned by the joint venture partner in the second half of 2007.

Aluja and Carmen
Both of these new projects were discovered in 2006 and are strong high sulphidation epithermal gold systems hosted within altered pyroclastic rock, volcanic domes and phreatomagmatic breccia bodies. The Aluja alteration system covers 2.0 x 1.5 kilometres and consists of massive silica and multi-phase breccia bodies with up to 2.6 grams per tonne gold. Carmen consists of a 3.0 x 1.5 kilometre altered area which includes massive silica with up to 0.96 grams per tonne gold. First pass drilling is planned for both projects by the Liam joint venture during the second half of 2007.

Huacullo
The Huacullo zone is underlain by an area of epithermal veins and breccias trending northwest-southeast and hosted in the Alpabamba volcanics. Five separate vein/breccia systems have been identified, the largest extending for 2,000 metres and varying between one to 20 metres in width. Vein textures and trace element geochemistry are similar to veins being mined elsewhere in the district.

Four drill holes spaced 150 to 700 metres apart were completed on the largest vein, and one hole was drilled in each of the four other veins. Results from this phase of drilling were positive with one hole in the southernmost vein system returning an intersection of 1.05 metres grading 22.4 grams per tonne gold and 70.60 grams per tonne silver. Several other holes contained narrow (0.45 to 1.62 metres) intersections of over 100 grams per tonne silver. Step-out drilling is being considered for late 2007 by the Liam joint venture, but will depend on timing and drill availability after Numa, Aluja and Carmen have been drilled.

Pacobamba
Pacobamba is a new zone in the Liam project and consists of a 1500 x 400 metre core area of intensely altered volcanic rocks, intrusive bodies and hydrothermal breccias, surrounded by strongly silicified limestone. The volcanic rocks appear to be within a graben formed in the crest of a large limestone anticline. Rock sampling from the breccias has returned gold values up to 4.4 grams per tonne. Drill targets exist within the graben, at the base of the graben and on one of the graben-bounding faults. Additional sampling and geologic mapping is underway. Induced polarization geophysical surveying is underway and will be followed by a first phase diamond drill program of 8 to12 holes. A community access agreement has been completed and an application for a government permit to drill will be submitted in August 2007. Southwestern is the operator of this project.

PACAPAUSA PROJECT
Pacapausa comprises 7,933 hectares of exploration concessions located immediately south of the Explorador Mine. The project is 100% owned by Southwestern, subject to an option agreement with Minera Oro Vega ("Oro Vega"), the Peruvian subsidiary of International Minerals Corporation, under which Oro Vega can earn a 70% interest in the project by meeting certain work

4     Southwestern Resources Corp.

commitments, completing a feasibility study, and financing the project into production. Southwestern has been informed by Oro Vega that it has fulfilled the requirements to exercise the first option, which included investing a total of US $1,000,000 and drilling 1,000 metres in the project, and wishes to activate the second option, the Feasibility Option. Pending confirmation by Southwestern that Oro Vega has completed all requirements of the first option, a new company will be formed, 50% owned by Oro Vega and 50% owned by Southwestern, to hold title to the Pacapausa Project.

Five main targets have been defined on the project each consisting of epithermal silver and gold mineralization within vein, stockwork and breccia zones. The principal zone represents the main area of mineralization and has been sampled extensively by the Company and Oro Vega. The southern half of the principal zone is underlain by a stockwork/breccia outcropping over an area of 350 metres by 150 metres. Surface sampling has defined several areas of high-grade silver.

Eleven drill holes totalling 2,082 metres were completed during the first quarter. As reported by Oro Vega, highlights of the results include: 10.8 metres of 212 grams per tonne silver in hole PACA-009; 1.5 metres of 548 grams per tonne silver in hole PACA-001; and 4.8 metres of 100 grams per tonne silver in PACA-005. For further details see the news release dated April 26, 2007. Once the new company is formed, the Company has been advised that Oro Vega plans to complete a second phase drill program of 1,000 metres in the second half of 2007 to test the strike length and depth extent of the significant PACA-001 intersection.

ANTAY PROJECT
The 50,000 hectare Antay copper-molybdenum porphyry project is situated within the Tintaya-Bambas Copper Gold Belt and is accessible by road from Cuzco located about 150 kilometres northwest of the Antay Project. Antay is 100% owned by Southwestern since the option agreement with Anglo American Exploration Peru S.A.("Anglo") was terminated in July 2007, due to unsuccessful efforts to secure a community access agreement to the Sayta porphyry prospect, which is situated in the northern section of the Antay Project. Southwestern had community approval to carry out field work at Sayta prior to entering into the option agreement with Anglo. Southwestern has commenced efforts to secure an access agreement with the local community, with an objective to either drill or seek a new partner for Antay once an access agreement has been reached.

CRISTO DE LOS ANDES PROJECT
This 2,800 hectare porphyry project is also within the Tintaya-Bambas Copper Gold Belt and is 100% owned by Southwestern. The project was first identified by Southwestern in 1992-1993 and was subsequently explored by joint venture partners in 1994-1996. Eight holes were drilled and only weakly anomalous copper values were intersected. However, a reinterpretation of geological and geophysical data by Southwestern in 2006 resulted in the identification of three large chargeability anomalies, up to 1 kilometre in diameter that have not been drilled. Additional field work and geophysical surveying by Southwestern in 2007 confirmed and extended the anomalies with new rock-chip samples, some of which returning assays over 1% copper.

ANTILLA CLUSTER PROJECT
Antilla Cluster is another 100% Southwestern-owned porphyry project within the Tintaya-Bambas Copper Gold Belt and consists of 23,300 hectares. Three porphyry and skarn prospects, Quihurii, Alpacocha and Usillo, have been identified within this project and extensive mapping and sampling have identified copper, gold and molybdenum systems with up to 9% copper, 334 parts per million ("ppm") molybdenum and 2.4 ppm gold. Induced polarization surveying in 2007 indicated strong chargeability anomalies extending to over 300 metres at depth.

GENERATIVE EXPLORATION
Southwestern has staked a total of 68,098 hectares of claims in Peru in 2007 over new gold, silver, copper and polymetallic systems. Claim holdings of Southwestern in Peru total 552,924 hectares, including land within joint ventures. Generative exploration is being carried out in southern Peru, south-central Peru and Southwestern recently commenced a new generative exploration program in central Peru.

CHANGE IN ACCOUNTING FOR THE INVESTMENT IN ZINCORE METALS INC.
In April 2007, the Company sold 500,000 common shares of Zincore Metals Inc. ("Zincore") for gross proceeds of $350,000. This sale reduced the Company's interest in Zincore from 50.4% to 49.7% . As a result of the reduction of the Company's interest and resulting loss of control, the assets and liabilities of Zincore were no longer consolidated in the Company's balance sheet effective April 1, 2007. The exclusion of the assets and liabilities of Zincore from the Company's consolidation and the investment carrying value at June 30, 2007 are detailed as follows:

Southwestern Resources Corp.    5

		As at June 30, 2007
(in thousands)
CASH	$	15,378
EXPLORATION ADVANCES AND OTHER RECEIVABLES		171
OTHER ASSETS		75
PROPERTY, PLANT AND EQUIPMENT		146
RESOURCE PROPERTIES		5,774
		21,544
ACCOUNTS PAYABLE AND ACCRUED CHARGES		(662	)
NON-CONTROLLING INTEREST		(10,360	)
INVESTMENT AS AT APRIL 1, 2007	$	10,522
SALE OF SHARES		(136	)
EQUITY IN LOSS (APRIL 1, 2007 TO JUNE 30, 2007)		(398	)
GAIN ON DILUTION		61
INVESTMENT AS AT JUNE 30, 2007	$	10,049

RESULTS OF OPERATIONS

The Company's consolidated net loss for the three and six month periods ended June 30, 2007 was $4.0 million or $0.09 per share and $5.1 million or $0.11 per share, respectively. This is compared to $2.8 million or $0.06 per share and $6.5 million or $0.14 per share during the same period in 2006. The increase in the current three-month period net loss was due to the equity in operations for Zincore for the period as well as lower interest income due to a lower cash balance. There was a decrease in the loss for the six month period primarily due to a $3.3 million gain realized on the sale of common shares of Lake Shore Gold Corp. ("Lake Shore") that were held by Southwestern, which was partially offset by higher operating expenses.

Effective January 1, 2007, the Company changed its practice of reporting stock-based compensation on a separate line in the Consolidated Statements of Loss and Deficit to a method of allocating the expense to (i) salaries and benefits to employees, (ii) consulting fees, and (iii) general exploration for individuals involved in exploration work. The allocation for the three and six month periods ended June 30, 2007 and 2006 were as follows:

	Three Months Ended						Three Months Ended
	June 30, 2007						June 30, 2006
		Southwestern		Zincore		Total		Southwestern		Zincore		Total
(in thousands)
SALARIES AND BENEFITS	$	297	$	-	$	297	$	409	$	-	$	409
CONSULTING		477		-		477		639		-		639
GENERAL EXPLORATION		351		-		351		188		-		188
TOTAL STOCK-BASED COMPENSATION	$	1,125	$	-	$	1,125	$	1,236	$	-	$	1,236

	Six Months Ended						Six Months Ended
	June 30, 2007						June 30, 2006
		Southwestern		Zincore		Total		Southwestern		Zincore		Total
(in thousands)
SALARIES AND BENEFITS	$	767	$	80	$	847	$	1,309	$	-	$	1,309
CONSULTING		1,183		147		1,330		1,803		-		1,803
GENERAL EXPLORATION		1,592		109		1,701		625		-		625
TOTAL STOCK-BASED COMPENSATION	$	3,542	$	336	$	3,878	$	3,737	$	-	$	3,737

The stock-based compensation expense was calculated using the Black-Scholes option pricing model. A weighted average grant-date fair value of $3.37 (June 30, 2006 - $5.97) for each option grant was estimated using the following assumptions: no

6     Southwestern Resources Corp.

dividends are to be paid; expected volatility of 53% (June 30, 2006 - 54%); risk-free interest rate of 4.0% (June 30, 2006 – 4.0%) and expected life of 3.4 years (June 30, 2006 – 3.5 years).

General and administrative expenses for the three month period ended June 30, 2007 were comparable to the same period in 2006. During the six month period ended June 30, 2007 there was a decrease of $329,000, primarily the result of lower stock-based compensation expense included in salaries and consulting fees as well as a reduction in legal and accounting fees which was partially offset by an increase in shareholder information, office costs, travel, and a termination payment.

Foreign exchange gains and losses result primarily from the translation of U.S. dollar denominated monetary assets to Canadian dollars. The Company maintains sufficient U.S. dollar reserves to fund foreign exploration expenditures over the short term. Foreign exchange losses were slightly higher during the three and six month periods ended June 30, 2007 compared to the same periods in 2006 due to the strengthening of the Canadian dollar during the period.

General exploration expense relates to expenditures of a generative nature, costs of maintaining the Company's foreign exploration offices and stock-based compensation for consultants and employees performing exploration work. There was an increase of $517,000 and $2.1 million during the three and six month periods ended June 30, 2007 when compared to the same periods in 2006. This was due to higher stock-based compensation during the three month period ended June 30, 2007 and higher stock-based compensation and the consolidation of Zincore during the first quarter of 2007 for the six month period.

Interest and other income is comprised of interest revenue and management fees charged to affiliated companies and was lower during the three and six month periods ended June 30, 2007 due to lower average cash balances.

During the six month period ended June 30, 2007, the Company recorded a gain of $3,346,000 on the sale of its investment in Lake Shore. The Company sold two million shares of Lake Shore for proceeds of $4.9 million. As well, the Company sold 500,000 common shares of Zincore for gross proceeds of $350,000 and recorded a gain of $212,000.

Equity in operations of affiliated companies represents the Company's share of net losses for the reporting period in a significantly influenced company. During the three and six month periods ended June 30, 2007 there was a loss due to the recording of Zincore's losses beginning on April 1, 2007. During the same periods in 2006 there was a gain due to the income recorded by Superior Diamonds Inc. ("Superior").

Non-controlling interest of $434,000 represents the minority share of net losses of Zincore for the three months ended March 31, 2007.

During the three and six month periods ended June 30, 2007, expenditures totalling $153,000 were written off relating to various non-core projects in Peru. During the same period in 2006, expenditures totalling $494,000 relating to the Minispata Property in Peru were written off.

QUARTERLY FINANCIAL INFORMATION

The following selected consolidated financial data has been prepared in accordance with Canadian generally accepted accounting principles and should be read in conjunction with the Company's audited consolidated financial statements.

SUMMARY OF QUARTERLY FINANCIAL INFORMATION

		2nd Quarter			1st Quarter			4th Quarter		3rd Quarter
FISCAL QUARTER ENDED		June 30, 2007			March 31, 2007		December 31, 2006		September 30, 2006
(in thousands, except per share amounts)
INTEREST AND OTHER INCOME	$	429		$	636		$	677	$	537
NET (LOSS) EARNINGS	$	(3,990	)	$	(1,063	)	$	6,424	$	(1,369	)
(LOSS) EARNINGS PER SHARE*-BASIC AND DILUTED	$	(0.09	)	$	(0.02	)	$	0.14	$	(0.03	)

Southwestern Resources Corp.    7

		2nd Quarter			1st Quarter			4th Quarter			3rd Quarter
FISCAL QUARTER ENDED		June 30, 2006			March 31, 2006		December 31, 2005			September 30, 2005
(in thousands, except per share amounts)
INTEREST AND OTHER INCOME	$	607		$	512		$	460		$	289
NET (LOSS) EARNINGS	$	(2,830	)	$	(3,675	)	$	(779	)	$	(2,081	)
(LOSS) EARNINGS PER SHARE*- BASIC AND DILUTED	$	(0.06	)	$	(0.08	)	$	(0.02	)	$	(0.05	)

*(Loss) Earnings per share is calculated based on the weighted average number of shares outstanding.

An analysis of the quarterly results over the last eight quarters shows a significant variation between the quarters. The difference in the second quarters was primarily the result of the equity in the operations of Zincore. The main difference in the first quarters was due to a gain on the sale of an investment recorded in March 2007. The variation between the third and fourth quarters is mainly due to higher gains from the sale of investments, a large gain on dilution of the Company's investment in Zincore, higher interest income, and lower foreign exchange losses in 2006.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Southwestern is not in commercial production on any of its mineral properties and, accordingly, it does not generate cash from operations. The Company finances its activities by raising capital through the equity markets. The Company has no long-term debt and working capital as at June 30, 2007 was $30.7 million. The large reduction during the second quarter of 2007 was primarily due to Zincore's balance sheet no longer being consolidated with that of the Company.

The Company used net cash of $2.9 million and $4.9 million on operating activities during the three and six month period ended June 30, 2007, respectively, compared with $2.1 million and $3.4 million during the corresponding periods in 2006. The increase in the three month period of 2007 relates to higher foreign exchange losses and lower interest income.

The Company used cash of $19.0 million and $17.0 million (net of receipts) on investing activities during the three and six month periods ended June 30, 2007, respectively, compared with net cash used in investing activities of $10.3 million and $13.8 million during the same periods in 2006. During the three month period ended March 31, 2007, the Company received $2.0 million from investing activities. The large increase was primarily due to the removal of Zincore's cash balances ($15.4 million) which are no longer being consolidated with those of the Company. The Company expended $4.1 million and $8.7 million on mineral properties and related deferred costs in China and Peru during the three and six month periods ended June 30, 2007. This is compared to $5.3 million and $8.6 million during the same periods in 2006. The majority of these expenditures were incurred on the Boka Project in China and the Accha-Yanque Project in Peru during the first quarter of 2007 when Zincore's expenditures were consolidated with those of the Company. A total of $517,000 was expended on the acquisition of shares in Superior and a further $184,000 on capital assets during the six month period. The Company received proceeds of approximately $5.2 million from the sale of Lake Shore and Zincore shares and $2.6 million from the redemption of short-term investments. During the three month period ended June 30, 2006 there was an increase in short-term investments of $5.4 million and an increase in capital costs of $179,000 and $370,000 for the three and six month periods ended June 30, 2006, respectively.

The carrying value of mineral properties increased by $2.5 million primarily as a result of exploration expenditures of $5.0 million on the Boka Project, $0.6 million on the Liam Project, $1.9 million on Accha-Yanque and $1.0 million on various projects in China and Peru. This was offset by a reduction of $5.8 million as a result of Zincore's resource properties no longer being consolidated with the Company's resource properties.

During the six month period ended June 30, 2007, the Company purchased 930,600 of its own common shares for costs totalling $7.2 million pursuant to its normal course issuer bid. During the same period, 717,600 of these common shares, as well as 41,200 common shares purchased in 2006, were cancelled and resulted in a loss of $3.1 million being recorded as a charge to deficit.

Due to the adoption of new accounting standards (see "Changes in Accounting Policies") effective January 1, 2007, the Company now measures assets classified as available-for-sale at fair value and includes resulting unrealized gains and losses on a new Consolidated Statement of Comprehensive Income (Loss). A total of $1,475,000 and $324,000 was recorded as unrealized losses on available-for-sale investments for the three and six month periods ended June 30, 2007, respectively. The accumulated other comprehensive income of $1,499,000 reported on the consolidated balance sheet includes an adjustment for cumulative unrealized

8     Southwestern Resources Corp.

gains on available-for-sale investments at January 1, 2007 of $3,428,000, which is reduced by a realized portion of $1,605,000 relating to the sale of Lake Shore common shares and an unrealized loss of $324,000 as noted above.

The Company has commitments totalling $1,180,891 over five years (2007 - $182,000; 2008 to 2009 - $727,000; 2010 - $273,000) pertaining to leasehold obligations of Southwestern. With respect to other contractual obligations, there are no material changes during the current period that are outside the ordinary course of the Company's business.

The Company is named as a defendant in several class action lawsuits filed by certain shareholders of the Company. See "Description of Business" on page 3 and "Results of Operations – Risks and Uncertainties" on page 11.

OUTSTANDING SHARE CAPITAL

As at August 8, 2007 there were 45,044,000 common shares issued and 44,923,000 common shares outstanding and the following stock options were outstanding:

		Options
	Exercise Price Range	Outstanding
		(in thousands)
$	1.00 - $5.79	393
$	5.80-$10.59	2,211
$	10.60-$15.39	1,351
$	15.40-$20.19	272
	Total	4,227

OFF-BALANCE SHEET ARRANGEMENTS
The Company does not utilize off-balance sheet transactions.

RELATED PARTY TRANSACTIONS
During the three and six month periods ended June 30, 2007 and June 30, 2006, the Company paid remuneration to directors and to companies controlled by officers who are also directors. The Company received management fees, which are recorded as other income from Superior, Lake Shore and Zincore. These are companies which are related by way of directors in common and/or by way of a management services agreement as follows:

	Three Months Ended				Six Months Ended
		June 30, 2007		June 30, 2006	June 30, 2007		June 30, 2006
(in thousands)
REMUNERATION PAID TO OFFICERS/DIRECTORS	$	398	$	113	$	530	$	239
MANAGEMENT FEES RECEIVED	$	90	$	18	$	110	$	36

There was also an amount of $88,743 (December 31, 2006 - $5,669) due to Southwestern from the above mentioned companies at June 30, 2007.

All related party transactions are measured at the exchange amount which is the consideration agreed to between the parties.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents, exploration advances and other receivables, short-term investments, investments, accounts payable and accrued charges. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risk arising from these financial instruments.

CHANGES IN ACCOUNTING POLICIES
Effective January 1, 2007, the Company adopted two new accounting standards related to financial instruments that were issued by the Canadian Institute of Chartered Accountants. These accounting policy changes were adopted on a prospective basis with no restatement of prior period financial statements. The new standards and accounting policy changes are as follows:

Southwestern Resources Corp.    9

Financial Instruments – Recognition and measurement (Section 3855)
In accordance with this new standard the Company now classifies all financial instruments as either held-to-maturity, available-for-sale, held-for-trading, loans and receivables, or other financial liabilities. Financial assets held-to-maturity, loans and receivables and financial liabilities other than those held-for-trading, are measured at amortized cost. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income. Instruments classified as held-for-trading are measured at fair value with unrealized gains and losses recognized on the statement of loss.

Upon adoption of this new standard, the Company has designated its cash and cash equivalents as held-for-trading, which are measured at fair value. Exploration advances and other receivables are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued charges are classified as other liabilities, which are measured at amortized cost. Investments in significantly influenced affiliates are classified as held-to-maturity, which are measured at amortized cost. The Company has classified its investments in public companies (other than those that the Company has significant influence in) as available-for-sale and therefore carries them at fair market value, with the unrealized gain or loss recorded in shareholders' equity as a component of other comprehensive income. These amounts will be reclassified from shareholders' equity to net income when the investment is sold. Previously, investments in these public companies were carried at cost, less provisions for other than temporary declines in value. This change in accounting policy results in a $3,428,000 increase in the carrying value of investments in public companies as at January 1, 2007, representing the cumulative unrealized gain at that time.

Comprehensive Income (Section 1530)
Comprehensive income is the change in shareholders' equity during a period from transactions and other events and circumstances from non-owner sources. In accordance with this new standard, the Company now reports unrealized gains and losses on financial assets classified as available-for-sale on a consolidated statement of comprehensive income (loss) and a new category, accumulated other comprehensive income, has been added to the shareholders' equity section of the consolidated balance sheet.

CORPORATE GOVERNANCE
The Company's Board of Directors follow recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders.

The current Board of Directors is comprised of four individuals, three of whom are neither officers nor employees of the Company and are unrelated in that they are independent of management. The Audit Committee is comprised of three directors who are independent of management. Two of the three Audit Committee members are chartered accountants in Canada.

The Audit Committee fulfills its role of ensuring the integrity of the reported information through its review of the interim and audited annual financial statements prior to their submission to the Board of Directors for approval. The Audit Committee meets with management quarterly to review the financial statements including the MD&A and to discuss other financial, operating and internal control matters. The Company also has the practice of engaging its external auditors to perform quarterly reviews of its interim financial statements.

CONTROLS AND PROCEDURES
As required by Multilateral Instrument 52-109, management is responsible for the design, establishment and maintenance of disclosure controls and procedures over the public disclosure of financial and non-financial information regarding the Company, and internal control over financial reporting to provide reasonable assurance regarding the integrity of the Company's financial information and reliability of its financial reporting. Management maintains appropriate information systems, procedures and controls to ensure integrity of the financial statements and maintains appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable. The Company has a Disclosure and Stock Trading Policy and a Disclosure Committee in place to mitigate risks associated with the disclosure of inaccurate or incomplete information. The Company has also undertaken the task of evaluating the effectiveness of internal control over financial reporting and disclosure controls and procedures in order to comply with certification requirements of Sections 404 and 302 of the Sarbanes-Oxley Act of 2002.

The Company's management, with the participation and under the supervision of its CEO and Chief Financial Officer, have designed the disclosure controls and procedures to provide reasonable assurance that material information relating to the Company,

10     Southwestern Resources Corp.

including its consolidated subsidiaries, is made known to them on a timely basis. Internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of the Company's financial reporting.

The Company's management believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Due to the inherent limitations in all controls systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

There has been no change in the Company's internal control over financial reporting during the six month period ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. On July 19, 2007, the Company announced it had determined that there were deficiencies in its control procedures for its Boka Project. See discussion under "Mineral Properties – Boka Project". The Company has enhanced how certain procedures are effected by implementing additional safeguards including those relating to data compilation procedures. The Company is continuing to monitor and review the execution of its controls and procedures.

RISKS AND UNCERTAINTIES
The Company is an exploration stage mineral exploration company engaged in the identification, acquisition, evaluation and exploration of mineral properties. The detailed review of the Boka Project could result in a write-down, termination of exploration and development work or loss of the Company's interest in its Boka Project. If any of the foregoing were to occur, this would have a material adverse effect on the Company's business, financial condition and results of operation.

The Company is named as a defendant in several class action lawsuits filed by certain shareholders of the Company. The Company cannot assure that it will succeed in defending any claims, that judgments will not be entered against it with respect to any litigation or that reserves the Company may set aside will be adequate to cover any such judgments. If any of these actions or proceedings against the Company is successful, it may be subject to significant damages awards. The Company is incurring significant legal fees defending its lawsuits. Additionally, the defense of these claims could divert the attention of the Company's management and other personnel for significant periods of time.

As a result of the Company withdrawing all its previously announced results for the Boka Project, the Company has been the subject of continuing negative publicity. This negative publicity may have an effect on the terms under which some joint venture partners will be willing to do business with the Company and could affect its financial performance or financial condition. The Company also believes that many of its employees are operating under stressful conditions, which reduce morale and could lead to increased employee turnover. Continuing negative publicity could have a material adverse effect on the Company's business, the market price of its publicly traded shares, and its ability to raise capital.

The specifics of the Company's other "risks" are detailed in disclosures with the heading "Risk Factors" in the Company's periodic filings with securities regulators.

OUTLOOK
The Company's business philosophy has been to focus exploration efforts on areas with world class potential, and to leverage management's knowledge and technical expertise through joint venture agreements with major mining companies. Southwestern has been able develop highly prospective exploration projects in emerging countries. The Company will continue to focus the majority of its exploration activities in China and Peru and to seek opportunities to form additional joint ventures in order to reduce shareholder risk. With its current treasury the Company currently intends to continue its proposed exploration programs. However, the detailed review of the Boka Project may result in changes to the 2007 exploration program. See “Risks and Uncertainties”.

ADDITIONAL INFORMATION
Additional information is provided in the Company's interim financial statements for the period ended June 30, 2007, the audited consolidated financial statements for the year ended December 31, 2006 and the Company's Annual Information Form and Information Circular. These documents are available on SEDAR at www.sedar.com.

Southwestern Resources Corp.    11

SOUTHWESTERN RESOURCES CORP.

SUITE 1650, 701 WEST GEORGIA
STREET
PO BOX 10102
VANCOUVER, BC
CANADA V7Y 1C6

T. 604-669-2525
F. 604-688-5175

h t t p : / / w w w . s w g o l d . c o m
E m a i l : i n f o @ s w g o l d . c o m

S W G | T S X

EX-99.3

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