UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT No. 2

FORM 20-F

o REGISTRATION STATEMENT PURSUANT TO SECTION 12 (b) OR (g)

OF THE SECURITIES EXCHANGE ACT OF 1934

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

[ ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number 000-50112

PAN AMERICAN GOLD CORPORATION

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant's Name into English)

Ontario, Canada

(Jurisdiction of incorporation or organization)

Suite 501, 1540 West 2nd Avenue

Vancouver, British Columbia, Canada V6J 1H2

(Address of principal executive offices)

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

Not Applicable

Title of Class

Not Applicable

Name of Each Exchange on Which Registered

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

Common Shares Without Par Value

Title of Class

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Not Applicable

Title of Class

Indicate the number of outstanding shares of each of the Registrant's classes of capital or common stock as of the close of the period covered by the annual report.

There were 35,227,116 common shares, without par value, issued and outstanding as of December 31, 2006.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] YES x NO

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

x YES

[ ] No

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

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

x YES

[ ] No

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

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer x

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

[ ] Item 17

x Item 18

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

[ ] YES

x NO

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ ] YES [ ] NO

PART I

This annual report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this annual report, the terms "we", "us", "our", and "Pan American" mean Pan American Gold Corporation, unless otherwise indicated. The term "Pan American Nevada" refers to Pan American Gold Corp., a Nevada corporation.

Unless otherwise indicated, all dollar amounts referred to herein are in Canadian dollars.

ITEM 1

Identity of Directors, Senior Management and Advisers

Not applicable.

ITEM 2

Offer Statistics and Expected Timetable

Not applicable.

ITEM 3

Key Information

A.	Selected Financial Data

The selected financial data presented below for the five year period ended December 31, 2006 is derived from our financial statements which were examined by our independent auditor. The information set forth below should be read in conjunction with our audited financial statements (including related notes thereto) and "Operating and Financial Review and Prospects" (Item 5). The data is presented in Canadian dollars.

- 4 -

Selected Financial Data

(Stated in Canadian Dollars - Calculated in accordance with Canadian GAAP)

Fiscal Year Ended December 31 (Audited)

CANADIAN GAAP	2006	2005	2004	2003	2002
Net Sales or Operating Revenue	-	-	-	-	-
Administrative Expenses	$492,825	$301,154	$521,421	$102,211	$153,434
Amortization and Asset Write-down	$11,574	$62,081	$554,261	$7,500	-
Income (Loss) From Operations	($290,284)	($491,882)	($982,572)	($102,211)	($153,434)
Other Income	-	-	-	-	-
Income (Loss) from Continuing Operations	-	-	-	-	-
Net Income (Loss) from Discontinued Operations	-	-	-	-	-
Net Income (Loss) for the year	($290,284)	($428,078)	($982,572)	($104,375)	($601,974)
Net Income (Loss) from Operations per Common Share	($0.01)	($0.01)	($0.03)	($0.03)	($0.18)
Income (Loss) from Continuing Operations per Common Share	-	-	-	-	-
Total Assets	$307,117	$3,250,702	$3,428,573	$17,474	$26,947
Net Assets	$171,203	$25,261	$452,784	($89,012)	(971,104)
Capital Stock	$8,509,552	$8,075,829	$7,446,962	$6,769,726	$5,783,259
Number of Common Shares (adjusted to reflect changes in capital)	35,227,116	34,927,116	34,052,039	4,358,521	3,372,054
Diluted Net Income per Common Share	($0.01)	($0.01)	($0.03)	($0.03)	($0.18)
Long-Term Debt	-	$3,134,515	$2,923,968	-	-
Cash Dividends per Common Share	-	-	-	-	-

- 5 -

Selected Financial Data

(Stated in Canadian Dollars - Calculated in accordance with US GAAP)

Fiscal Year Ended December 31 (Audited)

UNITED STATES GAAP	2006	2005	2004	2003	2002
Net Sales or Operating Revenue	-	-	-	-	-
Other Income	-	-	-	-	-
Net Income (Loss) for the year	($431,380)	($418,268)	($1,298,007)	($104,494)	($614,630)
Net Income (Loss) from Operations per Common Share	($0.01)	($0.01)	($0.04)	($0.03)	($0.18)
Total Assets	$152,752	$2,932,303	$3,100,364	$4,699	$14,291
Number of Common Shares (adjusted to reflect changes in capital)	35,227,116	34,927,116	34,052,039	4,358,521	3,372,054
Cash Dividends per Common Share	-	-	-	-	-

Reconciliation to United States Generally Accepted Accounting Principles

A reconciliation to United States Generally Accepted Accounting Principles is included in Note 12 to the audited financial statements. Significant differences include accounting for compensation expense.

Disclosure of Exchange Rate History

Since June 1, 1970, the government of Canada has permitted a floating exchange rate to determine the value of the Canadian dollar as compared to the United States dollar. On June 21, 2007, the exchange rates in effect for Canadian dollars exchanged for United States dollars, expressed in terms of Canadian dollars (based on the noon buying rates in New York City, for cable transfers in Canadian dollars, as certified for customs purposes by the Federal Reserve Bank of New York) was $1.0727. For the past five fiscal years ended December 31, and for the monthly periods between January 1, 2007 and May 31, 2007, the following exchange rates were in effect for Canadian dollars exchanged for United States dollars, expressed in terms of Canadian dollars (based on the noon buying rates in New York City, for cable transfers in Canadian dollars, as certified for customs purposes by the Federal Reserve Bank of New York):

Year Ended	Average
December 31, 2002	$1.5642
December 31, 2003	$1.4008
December 31, 2004	$1.3017
December 31, 2005	$1.212
December 31, 2006	$1.1340

- 6 -

Month ended	High / Low
December 2006	$1.1652/$1.1415
January 2007	$1.1824/$1.1647
February 2007	$1.1852/$1.1586
March 2007	$1.1810/$1.1530
April 2007	$1.1583/$1.1068
May 2007	$1.1136/$1.0701
We have not issued any dividends in the past five fiscal years.
B. Capitalization and Indebtedness.

Not applicable.

C. Reasons for the Offer and Use of Proceeds.

Not applicable.

D. Risk Factors

Much of the information included in this annual report includes or is based upon estimates, projections or other forward-looking statements. Such forward-looking statements include any projections or estimates made by our company and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward looking statements.

The common shares of our company are considered speculative. Prospective investors should consider carefully the risk factors set out below.

Risks Associated with Mining

As our properties are in the exploration and development stage there can be no assurance that we will establish commercial discoveries on our properties.

Despite exploration work on our mineral claims, no known bodies of commercial ore or economic deposits have been established on any of our mineral properties. In addition, we are in our early stages of exploration and substantial additional work will be required in order to determine if any economic deposits occur on our properties. Even in the event commercial quantities of minerals are discovered, the mining properties might not be brought into a state of commercial production. Finding mineral deposits is dependent on a number of factors, not the least of which is the technical skill of exploration personnel involved. The commercial viability of a mineral deposit once discovered is also

- 7 -

dependent on a number of factors, some of which are particular attributes of the deposit, such as size, grade and proximity to infrastructure, as well as metal prices. Most of these factors are beyond the control of the entity conducting such mineral exploration. We are an exploration stage company with no history of revenues. There can be no assurance that our operations will be profitable in the future, as a result of which our business will fail.

Mineral operations are subject to market forces outside of our control which could have an impact on costs of our operations and could reduce the profitability of our operations and threaten our continuation.

The marketability of minerals is affected by numerous factors beyond the control of the entity involved in their mining and processing. These factors include market fluctuations, government regulations relating to prices, taxes, royalties, allowable production, imports, exports and supply and demand. One or more of these risk elements could have an impact on costs of an operation and if significant enough, reduce the prospects of profitability of our operations and threaten our continuation.

The mining industry is highly competitive and there is no assurance that we will be successful in acquiring claims.

The mineral industry is intensely competitive in all phases. We compete with many companies possessing greater financial resources and technical facilities than ourself for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees. Due to the current market for base and precious metals, we believe that competition will be a factor which may confine our ability to retain qualified geologists and consultants, and to acquire interests in mineral properties with significant potential.

The fact that we have not earned any revenues since our incorporation raises substantial doubt about our ability to continue as a going concern.

We have not generated any revenues since our incorporation and we will, in all likelihood, continue to incur operating expenses without revenues until our mining properties are fully developed and in commercial production. We had cash in the amount of $120,689 as of December 31, 2006. We estimate our average monthly operating expenses to be approximately $40,000 each month. As a result, we need to generate significant revenues from our operations or acquire financing. We cannot assure that we will be able to successfully explore and develop our mining properties or assure that viable reserves exist on the properties for extraction. These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent auditors' report on our financial statements for the year ended December 31, 2006. It is unlikely that we will generate any funds internally until we discover commercially viable quantities of ore. If we are unable to generate revenue from our business during the fiscal year ending December 31, 2007, we may be forced to delay, scale back, or eliminate our exploration activities. If any of these actions were to become necessary, we may not be able to continue to explore our properties or operate our business and if either of those events happen, then there is a substantial risk our business would fail.

We have not generated any revenue from our business and we may need to raise additional funds in the near future. If we are not able to obtain future financing when required, we might be forced to discontinue our business.

Because we have not generated any revenue from our business and we cannot anticipate when we will be able to generate revenue from our business, we will need to raise additional funds for the further exploration and future development of our mining claims and to respond to unanticipated requirements or

- 8 -

expenses. We anticipate that we will need to raise further financing for the 12 month period ending December 31, 2007 in the approximate amount of $240,000. We do not currently have any arrangements for financing and we can provide no assurance to investors we will be able to find such financing if required. The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. Furthermore, there is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay our future indebtedness or that we will not default on our future debts, jeopardising our business viability. Finally, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct business and explore our properties, which might result in the loss of some or all of your investment in our common stock.

Our properties are in the pre-exploration stage, are not commercially viable at this time and there is no assurance that commercially viable quantities of ore will be discovered.

Our mineral properties are in the early exploration stage and are not commercially viable at this time. Mineral exploration involves a high degree of risk. There is no assurance that commercially viable quantities of ore will be discovered. There is also no assurance that if found, commercially viable properties will be brought into commercial production. If we are not able to locate sufficient quantities of commercially viable ore and bring our properties into commercial production, we will not be able to continue operations and as a result our shareholders may lose any investment in our company.

There is substantial risk that no commercially exploitable minerals will be found and our business will fail.

The search for valuable minerals as a business is extremely risky. We can provide investors with no assurance that the mineral claims that we have an option to acquire contains commercially exploitable reserves. Exploration for minerals is a speculative venture necessarily involving substantial risk. The probability of an individual prospect having reserves and being commercially profitable is remote and, if a property does not contain any reserves, the funds we have spent or will spend on exploration of such property will be lost.

We are subject to environmental protection legislation with which we must comply or suffer sanctions from regulatory authorities.

If the results of our geological exploration program indicate commercially exploitable reserves and we decide to pursue commercial production of our mineral claim, we may be subject to an environmental review process under environmental assessment legislation. Compliance with an environmental review process may be costly and may delay commercial production. Furthermore, there is the possibility that we would not be able to proceed with commercial production upon completion of the environmental review process if government authorities do not approve our mine or if the costs of compliance with government regulation adversely affects the commercial viability of the proposed mine.

- 9 -

There may be defects to the title of the mineral claims, and as result, we could lose our interest in such claims.

The mining claims in which we have an interest have not been surveyed and, accordingly, the precise location of the boundaries of the claims and ownership of mineral rights on specific tracts of land comprising the claims may be in doubt. Such claims have not been converted to lease and tenure, and are, accordingly, subject to annual compliance with assessment work requirement. Other parties may dispute title to our mining properties. While we have investigated title to all mineral claims and, to the best of our knowledge, title to all properties are in good standing, this should not be construed as a guarantee of title. The properties may be subject to prior unregistered agreements or transfers or land claims and title may be affected by undetected defects.

Mineral prices are subject to dramatic and unpredictable fluctuations.

The market price of precious metals and other minerals is volatile and cannot be controlled. If the price of precious metals and other minerals should drop significantly, the economic prospects of the projects which we have an interest in could be significantly reduced or rendered uneconomic. There is no assurance that, even if commercial quantities of ore are discovered, a profitable market may exist for the sale of same. Factors beyond our control may affect the marketability of any minerals discovered. Mineral prices have fluctuated widely, particularly in recent years. The marketability of minerals is also affected by numerous other factors beyond our control, including government regulations relating to royalties, allowable production and importing and exporting of minerals, the effect of which cannot be accurately predicted.

Financing Risks

We are likely to require additional financing to develop mineral properties that have been identified and to place them into production and the failure to obtain such financing may result in delay or indefinite postponement of exploration work on our mineral properties.

We, while engaged in the business of exploiting mineral properties, do not have sufficient funds to undertake our planned current exploration projects. In addition, if our exploration programs are successful, additional financing will be required to develop the mineral properties identified and to place them into commercial production. The exploration and development of our mineral properties is, therefore, dependent upon our ability to obtain financing through the joint venturing of projects, debt financing, equity financing or other means. Such sources of financing may not be available on acceptable terms, if at all. Failure to obtain such financing may result in delay or indefinite postponement of exploration work on our mineral properties, as well as the possible loss of such properties.

Fluctuation in foreign currency exchange rates may affect our results.

While engaged in the business of exploiting mineral properties, our operations outside of Canada make us subject to foreign currency fluctuation and such fluctuations may adversely affect our financial positions and results. Our management may not take any steps to address foreign currency fluctuations that will eliminate all adverse effects and, accordingly, we may suffer losses due to adverse foreign currency fluctuations.

- 10 -

We are dependant on the services of certain key employees, namely Steve Bajic and Giovanni Lopez, and the loss of these certain key employees may have a materially adverse effect on our company.

While engaged in the business of exploiting mineral properties, the nature of our business, our ability to continue our exploration of potential projects, and to develop a competitive edge in the marketplace, depends, in large part, on our ability to attract and maintain qualified key management personnel. Competition for such personnel is intense, and we may not be able to attract and retain such personnel. Our growth has depended, and in the future will continue to depend, on the efforts of our key management employees. Loss of any of these people would have a material adverse effect on us. Currently we do not have any contracts with our key employees and we do not have key-man life insurance.

Conflicts of interest may arise as a result of our directors and officers being directors and officers of other natural resource companies.

Certain of our directors and officers are also directors and/or officers and/or shareholders of other natural resource companies. While we are engaged in the business of exploiting mineral properties, such associations may give rise to conflicts of interest from time to time. Our directors are required by law to act honestly and in good faith with a view to our best interests and to disclose any interest that they may have in any project or opportunity of ours. If a conflict of interest arises at a meeting of our board of directors, any director in a conflict must disclose his interest and abstain from voting on such matter. In determining whether or not we will participate in any project or opportunity, our directors will primarily consider the degree of risk to which we may be exposed and our financial position at the time.

Risks Relating to an Investment in our Securities

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our By-laws contain provisions limiting the liability of our officers and directors for all acts, receipts, neglects or defaults of themselves and all of our other officers or directors or for any other loss, damage or expense incurred by our company which may happen in the execution of the duties of such officers or directors. Such limitations on liability may reduce the likelihood of derivative litigation against our officers and directors and may discourage or deter our shareholders from suing our officers and directors based upon breaches of their duties to our company, though such an action, if successful, might otherwise benefit our company and our shareholders.

Investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue options to any of our employees, directors or consultants.

Because our success is highly dependent upon our respective employees, we may in the future grant options to some or all of our key employees, directors and consultants to purchase shares of our common stock as non-cash incentives. Those options may be granted at exercise prices below those for the common stock prevailing in the public trading market at the time or may be granted at exercise prices equal to market prices at times when the public market is depressed. To the extent that significant numbers of such options may be granted and exercised, the interests of our other stockholders may be diluted.

- 11 -

Investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

In the event that we are required to issue additional shares or decide to enter into joint ventures with other parties in order to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. The dilution may result in a decline in the market price of our shares.

We have a history of net losses and there is no assurance that we can reach profitability in the future.

We have a history of losses and there is no assurance that we can reach profitability in the future. We will require significant additional funding to meet our business objectives. Capital will need to be available to help maintain and to expand exploration on our principal exploration property. We may not be able to obtain additional financing on reasonable terms, or at all. If equity financing is required, as expected, then such financings could result in significant dilution to existing shareholders. If we are unable to obtain sufficient financing, we might have to dramatically slow exploration efforts and/or lose control of our projects. We have historically obtained the preponderance of our financing through the issuance of equity, there is no limit to the number of authorized common shares, and we have no current plans to obtain financing through means other than equity financing.

United States investors may not be able to enforce their civil liabilities against us or our directors, controlling persons and officers.

It may be difficult to bring and enforce suits against us. We were incorporated under the Ontario Business Corporations Act. A majority of our directors and officers are residents of Canada and substantially all of our assets are located outside of the United States. Consequently, it may be difficult for United States investors to effect service of process in the United States upon those directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the United States Securities Exchange Act of 1934, as amended. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or us predicated solely upon such civil liabilities.

Trading of our stock may be restricted by the Securities and Exchange Commission's "Penny Stock" regulations which may limit a stockholder's ability to buy and sell our stock.

The United States Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors." The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the

- 12 -

transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.

The National Association of Securities Dealers, or NASD, has adopted sales practice requirements which may also limit a shareholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.

Trading in our common shares on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.

The trading price of our common shares has been and may continue to be subject to wide fluctuations. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of the common shares, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for our company and a diversion of management's attention and resources.

United States investors could suffer adverse tax consequences if we are characterized as a passive foreign investment company.

We may be treated as a passive foreign investment company, or PFIC, for United States federal income tax purposes during the 2006 tax year or in subsequent years. We may be deemed a PFIC because previous financings combined with proceeds of future financings may produce, or be deemed to be held to produce, passive income. Additionally, United States citizens should review the section entitled "Taxation-U.S. Federal Income Taxation - Passive Foreign Investment Companies" contained in this annual report for a more detailed description of the PFIC rules and how those rules may affect their ownership of our capital shares.

If we are or become a PFIC, many of the United States shareholders will be subject to the following adverse tax consequences:

- 13 -

- they will be taxed at the highest ordinary income tax rates in effect during their holding period on certain distributions on our capital shares, and gains from the sale or other disposition of our capital shares;

- they will be required to pay interest on taxes allocable to prior periods; and

- the tax basis of our capital shares will not be increased to fair market value at the date of their date.

ITEM 4	Information on the Company
A.	History and Development of the Company

Our company was incorporated under the laws of the Province of Ontario (specifically under the Ontario Business Corporations Act) on April 24, 1967 under the name "Jolly Jumper Products of America Limited". On September 25, 1987, our name was changed to Sun Valley Hot Springs Ranch Inc. We changed our name to Tri-Valley Free Trade Inc. on March 26, 1991 and to Tri-Valley Investments Corporation on June 19, 1995. On October 2, 1998, we changed our name to Tri-Lateral Venture Corporation and on May 6, 2004, we changed our name to our present legal and commercial name "Pan American Gold Corporation". We are a reporting issuer under the securities laws of the Province of Ontario.

Our corporate offices are located at Suite 502 – 1540 West 2nd Avenue, Vancouver, British Columbia, Canada, V6J 1H2. Our telephone number is 604.288.8376 and our facsimile number is 604.662.7950.

We actively explored our natural resource properties until fiscal 1998 when we wrote-down our interests in our remaining properties in response to low precious metal prices and a difficult investment market in which to raise funds to finance continued exploration. However, we retained ownership of our crown-granted mineral claims in good standing on the Lennie Property, a gold exploration project located in the Red Lake gold camp in Ontario, Canada.

On May 6, 2004, our issued and unissued shares of common stock was split on the basis of seven (7) common shares for each one (1) common share and our name was changed to Pan American Gold Corporation. The forward split and name change were effected with the OTC Bulletin Board on June 2, 2004 at which time our trading symbol was changed to "PNAMF".

On May 6, 2004, we entered into a share purchase agreement with Pan American Gold Corporation, a Nevada corporation, Graham Douglas and the shareholders of Pan American Nevada, whereby we acquired Pan American Nevada in consideration for the issuance of an aggregate of 3,370,000 shares of common stock of our company. The shares represented approximately 9.9% of our company's outstanding shares on closing of the transaction. As a condition to the closing under the share purchase agreement, our board of directors appointed Richard Bachman as a member of our board of directors, and Kevin Hanson and Alan Crawford resigned as directors and officers of our company. On May 7, 2004 Michael Sweatman was appointed as a director of our company. With the acquisition of the Nevada subsidiary, we acquired the following four properties: Kinsley and Pinnacle located in Nevada, United States; Cactus in California, United States; and Eskay Creek in British Columbia. During 2004, we conducted some exploratory drilling on the Cactus and Kinsley properties. The exploration results were disappointing and these properties were subsequently abandoned. The Pinnacle property was abandoned when difficulties obtaining necessary permitting did not allow for any on site evaluation prior to a significant property payment.

- 14 -

On May 28, 2004 we acquired an interest in Doon Investments, an Alberta limited partnership involved in the petroleum and natural gas industry. To acquire our limited partnership interest, we issued a promissory note in the principal amount of $2,926,910, bearing interest at 4.75% per annum to November 30, 2008 and 7% per annum thereafter, repayable on December 29, 2009 and secured entirely by a charge on our interest in the limited partnership. On June 9, 2006, we disposed of the partnership interest and settled the promissory note for net proceeds of $10,000, resulting in the extinguishment of all security interests registered under the promissory note.

We entered into a Termination Agreement dated February 6, 2006 with Matthew J. Mason and Pan American Nevada, whereby Pan American Nevada transferred its undivided 75% interest in and to certain mining claims located in the Eskay Creek region, Skeena and Liard Mining Divisions, British Columbia. Pursuant to the agreement, Pan American Nevada assigned its interest in the Eskay Creek Property to Matthew Mason in consideration for the return to treasury of 800,000 common shares in the capital of our company. These shares were returned to treasury on January 5, 2007.

We entered into a letter of intent dated March 15, 2006 with Aztec Copper Inc. of Arizona to option Aztec Copper's La Reforma property in southwest Chihuahua State, Mexico in consideration for the total payment of $1,400,000, the issuance of up to 2,500,000 common shares in the capital of our company and total exploration expenditures of $5,600,000 over a period of five years. After conducting due diligence on the La Reforma property, however, our company determined not to proceed with exercising the option to acquire the property and we abandoned all interest in the property as of May 18, 2006.

On April 10, 2006, we completed a private placement of 1,000,000 units to one investor at a price of US$0.50 per unit for gross proceeds of US$500,000. Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one common share for US$0.80 until March 7, 2007. These warrants expired unexercised.

On May 10, 2006, our company entered into a letter agreement with Ramon Farias, a geologist who was later appointed a director of our company on May 31, 2006, whereby Mr. Farias agreed to provide our company with an option to earn an initial 100% interest in the Huicicila (Miravalles) Properties located in Nayarit State, Mexico. In consideration for the option, our company was obligated to complete due diligence on the property, make cash payments of US$1,100,000, and complete exploration expenditures of not less than US$600,000 over a period of three years. As of October 11, 2006, our company had advanced a total of US$20,000 to Ramon Farias. We did not meet our option payment obligations and, accordingly, we decided not to proceed with the Huicicila property.

On October 5, 2006, we settled $30,000 in debt owed to a former director of our company by the issuance of 100,000 shares of common stock of our company.

On March 5, 2007, we completed a private placement of 814,140 units to four investors at a price of $0.10 per unit for gross proceeds of $81,414. Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one common share for $0.20 until March 5, 2009.

B. Business Overview

We are in the business of acquiring, exploring and developing material resource properties. Following the abandonment of the Kinsley, Pinnacle, Cactus, Eskay Creek and Huicicila properties, our only remaining property is the Lennie Property, a gold exploration project located in the Red Lake gold camp in the Province of Ontario, Canada. For more information regarding our Lennie property, please refer to the section "Property, Plants and Equipment" on page 16 of this annual report.

- 15 -

We do not have defined mineral resources or reserves on our Lennie property. Discovering new mineral deposits is dependent upon a number of factors including the experience of exploration personnel involved, the location of the property, and most important, stable funding of exploration programs. The commercial viability of a mineral deposit once discovered is also dependent on a number of factors including country of location, size, grade, and proximity to infrastructure, as well as metal prices. The prices of most metals, including gold, have increased significantly over the past year, improving the probability of success that a new discovery will be economic, as well as the improving access to capital to finance on-going activities.

In addition to the exploration and development of our Lennie property, we intend to acquire additional mineral interests in the future. Management believes that the future growth of our company will primarily occur through the acquisition of additional mineral properties following extensive due diligence by our company. However, we may elect to proceed through collaborative agreements and joint ventures in order to share expertise and reduce operating costs with other experts in the mining industry.

The analysis of new property interests will be undertaken by or under the supervision of our management and board of directors. Although the mining industry is currently very competitive, management believes that many undervalued prospective properties remain available for acquisition purposes.

Material Effects of Government Regulations

The current and anticipated future operations of our company, including further exploration activities require permits from various Canadian Federal and Provincial governmental authorities. Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine safety and other matters. Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on our company and cause increases in capital expenditures which could result in a cessation of operations by our company. We had no material costs related to compliance and/or permits in recent years, and we anticipate no material costs in the next year.

C.	Organizational Structure

As at the date of this annual report, we have two wholly-owned subsidiaries, Pan American Gold Corporation, a company incorporated pursuant to the laws of the State of Nevada and Compania Minera P.A.M. de C.V., a company incorporated pursuant to the laws of Mexico.

D.	Property, Plants and Equipment

Our office facilities at Suite 501 – 1540 West 2nd Avenue, Vancouver, British Columbia, Canada are being provided to us by one of our directors at no cost. The director is reimbursed for out-of-pocket costs associated with the maintenance and operation of our offices, such as long distance, courier, and other direct expenses incurred on our behalf. We anticipate that these premises will be sufficient for our business operations for the foreseeable future.

Our company currently has one property interest consisting of the Lennie Property, a gold exploration project located in the Red Lake gold camp in the Province of Ontario, Canada.

- 16 -

Lennie Property

The Lennie Property is a gold-exploration project located in the Red Lake District in northwestern Ontario, Canada.

Acquisition Details

Pursuant to an option agreement dated August 31, 1995, we acquired a 100% interest in ten mineral claims located in Balmer Township, Ontario, subject to a 2% net smelter return upon commencement of commercial production. We were obligated to incur exploration expenses of $250,000 on the property on or before February 28, 1997, which we have expended.

Property Description

The property consists of ten patented claims that are for mineral rights only. The Red Lake area is glaciated Precambrian shield with comparatively thin till reworked by a pro-glacial lake. This caused sandy gravelly veneer that is anticipated to overlie a sandy till. The latter is largely limited to topographic depressions. Relief in the Red Lake area is a maximum 80 meters with relief observed on the property estimated at 15-20 meters.

Location and Access

The Balmertown - Red Lake area is a well-established mining center 165 miles by air northwest of the city of Winnipeg, Manitoba. Red Lake has daily air service from Winnipeg and Thunder Bay, Ontario, via Sioux Lookout. Balmertown has a year-round paved road connecting it with the town of Red Lake, ten kilometers to the west on Highway 125. From Red Lake, paved Highway 105 extends southward 115 miles to the village of Vermilion Bay on Highway 17, the Trans Canada Highway.

The property is two miles to the east-northeast of Balmertown. Access to the property is through the Gold Corp. mining site by a gravel bush road to a gravel forestry road that crosses the property. The latter gravel forestry road crossing the property arcs to the northwest then south six kilometers to Balmertown.

Regional and Property Geology

The Lennie Property is underlain by the lower Mafic Sequence (komatites to tholaitas with minor sediments) of the Red Lake portion of the Uchi Lake Greenstone Belt.

Outcrop exposure is poor, being largely mantled by swamp and overburden. Mostly diamond drilling and some surface geology mapping are the basis for determining the geology. Amphibolite grade metamorphism has affected the following rock types: mafic to intermediate flows to tuffs, iron formation chemical sediments, diorite and quartz feldspar porphyry dykes. The flows are massive with fine to medium grained crystalline texture. Tuffs are well-banded fine-grained volcanic sediments.

Alteration is regional carbonization overprinted by local metamorphism to garnet, biotite, sericite with superimposed areas of silicification. Garnets may comprise up to 5% of the rock commonly associated with green cliloritic and gray sericite alteration.

Two felsic tuff units are recognized. A northern unit identified from drill hole locations in the western part of the claim group, possibly extending across the property. The second, larger felsic tuff unit extends along the southern contact of the central iron formation, intersected in drill holes near the east and

- 17 -

western boundaries of the property. These latter tuffs are intensely altered rocks are unexposed lying beneath low swampy ground. This type of alteration has been identified as a very positive factor for gold mineralization.

The two bands of iron formation are readily identified by magnetometer surveys and scattered outcrops. The well-banded material is predominately cherty oxide phase iron formation with sulphide facies in argillaceous portions. Bedding contains irregular millimeter to meter scale folds with closures to the east. New and larger exposures observed indicate folding is not isoclinal, rather an irregular deformation varying significantly over a matter of meters.

Thin zones of diorite and quartz feldspar porphyry intersected by diamond drilling are interpreted as dykes. The gray-to-brown diorite is fine to medium grained and generally un-mineralized. Quartz feldspar porphyries contain white to blue rounded phenocryst in a white-to-gray aphanitic groundmass. The boundaries are sharp well-defined contacts.

Previous Work Done by Former Owners

Three separate investigations have been undertaken over 42 years. This has lead to possible discrepancies in correlating data from one survey to the next. In each case, a grid was established without tying into the previous work. Only the 1975 drill collars were left and can be precisely located. Permanent location markers were not erected for either the 1946 or 1967 drilling. The grids established in 1946 and 1975 were largely eradicated by logging sometime after 1975. The 1987 grid is poorly recognized as the north half of the claims have been extensively reforested.

Following staking of the property, the claim block perimeter was surveyed to bring the ground to patent. Geological mapping and a magnetometer survey were completed over a grid with 200-foot line spacings oriented 360 degrees. Data was presented on 1" to 200' scale maps. Corrections for drift in the magnetometer survey was by looping to a common base line station. From the data, a west-northwest shear or fault was identified as crossing the property. These surveys do not appear to have covered claim 22687.

Diamond drilling of six holes were completed for a total of 4,381 feet. The core size was E core with split samples taken for assay. No structural information was collected from the drill core, only general lithological descriptions. This work was sufficient to bring the claims to patent.

Dome Exploration Ltd. optioned the property from Lennie Red Lake Gold Mines for the period 1975 - 1976. A new grid was established lines at 200-foot intervals oriented 010 degrees. The drill log records state the holes were drilled grid north at 015 degrees while the geology map with the grid-plotted states baseline at 100 degrees with crosslines at 010 degrees. A matching of the 1946, 1975 and 1987 magnetic data supports the 010 degree orientation of the 1976 grid.

A magnetic survey was completed over the entire grid with data and contours plotted at 1" to 200' scale. Magnetic data was corrected using repeat stations and NOT using a base station magnetometer.

An EM survey carried out over the entire grid identifying three highly conductive zones trending west-northwest across the property. The southern zone, or more properly group of zones, lies within the southern iron formation. The middle conductor is a single well-defined conductor in the center of the property with defined east and west terminations. It definitely does not continue on the adjoining property to the east. The northern conductor in the far northwest of the property. The good correlation between magnetic signature and conductivity has led to interpreting all conductors as sulphide facies iron formation.

- 18 -

The geological mapping was also undertaken with attention paid to stratigraphy but not to structural elements. A geochemical survey was completed. Reports of the results cite surface contamination by dust from the nearby properties. Four localized anomalous zones were referred to but not located. They were stated as correlating approximately to Lennie drill holes #1 and #6 and some unspecified Dome drill holes.

Thirteen diamond drill holes totalling 7639 feet of AX core were completed on the Lennie property. Drilling was as three fences crossing the property more or less perpendicular to the stratigraphy. Assays of split core yielded two interesting sections.

No evidence of the earlier 1946 work was observed making correlations the early work inexact. The drill hole casing were left such that their exact locations can not be determined.

A successor company to Lennie, International RSV Resources Corp., carried out further fieldwork in 1987. A grid with lines oriented 360 degrees at 200' spacing was cut. The grid did not extend to the western boundary of the property. Another magnetometer survey was undertaken with a contoured map presented without numerical data. A base station magnetometer was not used to correct the data. Similar features to those identified in the earlier magnetic surveys were reconfirmed.

The remainder of work was diamond drilling collecting 13,082 feet of BQ core from sixteen drill locations. Sludge samples were not taken. The drill core was split and sent for assay. The drilling focused on fence drilling to intersect structures paralleling the interpreted fold axis or shear zone.

Some of the proposed drill targets could not be drilled due to time and access limitations (swamps not yet frozen). Following the logging of the core, it was initially stored then dumped and is unavailable for re-examination.

ITEM 5

Operating and Financial Review and Prospects

The information in this section is presented in accordance with Canadian generally accepted accounting principles, and has not been reconciled to United States generally accepted accounting principles.

A.	Operating Results

Year ended December 31, 2006 Compared to Year ended December 31, 2005

Operations during the year ended December 31, 2006 were primarily related to the exploration of our properties.

Administrative expenses totalled $492,825 for the year ended December 31, 2006 compared to $301,154 for the year ended December 31, 2005. The increase in administrative expenses is due to an overall increase in management fees, investor relations, directors' fees, transfer agent and filing fees, rent, office and administration, travel and legal fees and a decrease in consulting fees.

We incurred a loss for the year ended December 31, 2006 of $290,284 or $0.01 per share compared to a loss of $428,078 or $0.01 per share for the year ended December 31, 2005.

- 19 -

Year ended December 31, 2005 Compared to Year ended December 31, 2004

Operations during the year ended December 31, 2005 were primarily related to the exploration of our properties.

Administrative expenses totalled $301,154 for the year ended December 31, 2005 compared to $521,421 for the year ended December 31, 2004 due to a decrease in consulting expenses (2005 - $210,504, 2004 - $359,258), a decrease in legal and accounting fees (2005 - $62,711, 2004 - $100,936), a decrease in rent, office and administration (2005 - $5,940, 2004 - $18,048) and a decrease in travel and promotion (2005 - $Nil, 2004 - $13,559).

We incurred a loss for the year ended December 31, 2005 of $428,078 or $0.01 per share compared to a loss of $982,572 or $0.03 per share for the year ended December 31, 2004.

B.	Liquidity and Capital Resources

As at December 31, 2006

During the year ended December 31, 2006, we used $367,124 on operating activities, used $164,809 in investing activities and received $648,929 in financial activities from an increase in share subscriptions received, thereby increasing our cash position from $3,693 at December 31, 2005 to $120,689 at December 31, 2006.

We had a working capital deficit of $5,504 as at December 31, 2006 compared to a working capital deficit of $85,533 as at December 31, 2005.

Cash used in operations was $367,124 for the year ended December 31, 2006 compared to $94,699 in the prior year. This was attributable to a number of factors including an overall increase of our expenses during the year ended December 31, 2006.

On October 5, 2006, we settled $30,000 in debt owed to a former director of our company by the issuance of 100,000 shares of common stock of our company.

We estimate that our general and administrative expenses will be approximately $180,000 for the twelve-month period ending December 31, 2007. We had cash of $120,689 and current assets of $130,410 as at December 31, 2006. As our cash and current assets are less than our estimated operating expenses, we anticipate that such funds will not be sufficient to pay our estimated expenses for the period ending December 31, 2007. We intend to fulfill any additional cash requirement through the sale of our equity securities.

There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

Given that we are a development stage company and have not generated revenues to date, our cash flow projections are subject to numerous contingencies and risk factors beyond our control. We can offer no assurance that our company will generate cash flow sufficient to meet our cash flow projections or that our expenses will not exceed our projections. If our expenses exceed estimates, we will require additional monies during the next twelve months to execute our business plan.

- 20 -

We expect to spend minimal amounts on exploration for the period ended December 31, 2007 unless significant amounts of capital are raised; beyond that time, our budget will be determined based on a number of factors including the availability of funds and the success of exploration conducted to that date. We expect that we will need to raise additional funding through private placements of our equity securities and/or debt financing to carry out additional exploration activities on our properties.

Exploration Program

We anticipate that we will expend minimal amounts on exploration over the twelve month period ending December 31, 2007.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve month period ending December 31, 2007.

Employees

Our company is currently operated by Steve Bajic, as our President and Chief Executive Officer, and Martin Bajic, as our Chief Financial Officer. We currently have no employees and we do not anticipate hiring any employees over the twelve month period ending December 31, 2007.

US GAAP

The results of operations discussed above are based on our audited financial statements prepared in accordance with Canadian generally accepted accounting principles. Differences between Canadian generally accepted accounting principles and principles generally accepted in the United States are listed and quantified in Note 12 to the audited financial statements included elsewhere in this annual report. Significant differences between Canadian GAAP and US GAAP include:

- Canadian GAAP, acquisition and exploration costs are capitalized. Under US GAAP, costs are expenses as incurred unless commercial feasibility is established. Under US GAAP, mining properties are reviewed by management of our company for impairment whenever circumstances change which could indicate that the carrying amount of these assets may not be recoverable. Such review has not been completed as there are no capitalized properties for US GAAP purposes.

- In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements." SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. SAB No. 108 is effective for periods ending after November 15, 2006. The adoption of this statement did not have a material effect on our company's reported financial position or results of operations.

- In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands

- 21 -

disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on our company's future reported financial position or results of operations.

Critical Accounting Policies-Resource Properties

Our company accounts for resource properties in accordance with the Canadian Institute of Chartered Accountants Handbook Section 3061, "Property, plant and equipment" ("CICA 3061"), and abstract EIC 126, "Accounting by Mining Enterprises for Exploration Costs" ("EIC 126") of the Emerging Issues Committee. CICA 3061 provides for the capitalization of the acquisition and exploration costs of a mining property where such costs are considered to have the characteristics of property, plant and equipment. EIC 126 provides that a mining enterprise is not precluded from considering exploration costs to have the characteristics of the property, plant and equipment when it has not established mineral reserves objectively and, therefore, does not have a basis for preparing a projection of the estimated future net cash flow from the property.

Resource properties include initial acquisition costs and related option payments, which are recorded when paid. Exploration and development costs are capitalized until properties are brought into production, at which time costs are amortized on a unit of production basis over economically recoverable reserves. Option payments are credited against resource property costs when received. No gain or loss on disposition of a partial interest is recorded until all carrying costs of the interest have been offset by proceeds of sale or option payments received.

CICA 3061 also provides that property, plant and equipment be written down when the long-term expectation is that the net carrying amount will not be recovered. EIC 126 states that a mining enterprise which has not objectively established mineral reserves and, therefore, does not have a basis for preparing a projection of the estimated future cash flow from a property is not obliged to conclude that the capitalized costs have been impaired.

However EIC 126 references certain conditions that should be considered in determining subsequent write-downs, such as changes or abandonment of a work program or poor exploration results, and management reviews such conditions to determine whether a write-down of capitalized costs is required. When the carrying value of a property exceeds its net recoverable amount, provision is made for the impairment in value.

Critical Accounting Policies-Foreign currency translation

The accounts of our company's non-Canadian subsidiaries, which are considered to be dependent on our company, and transactions of Canadian operations denominated in foreign currencies are translated to Canadian dollars using the temporal method. Under this method, monetary assets and liabilities are translated at current rates of exchange and other assets and liabilities are translated at historical rates of exchange. Revenues and expenses are translated at average rates of exchange for the year. All exchange gains and losses are recognized currently in earnings.

- 22 -

C.	Research and Development, patents, licenses etc.

We do not currently and did not previously have research and development policies in place. Over the past three fiscal years, we expended approximately minimal amounts on the exploration of our various mining properties.

D.	Trend Information
	We do not currently know of any trends that would be material to our operations.
E.	Off-balance Sheet Arrangements
	We do not have any off-balance sheet arrangements.
F.	Contractual Obligations

We do not have any required expenditures pursuant to any contractual obligations. The contracts pursuant to which we have the right to acquire further interests in our mineral properties are option agreements, whereby we may or may not elect to expend further funds on our properties.

ITEM 6	Directors, Senior Management and Employees
A.	Directors and Senior Management

The following table sets forth the names, business experience and area of expertise of each of our directors and officers, as at June 27, 2007:

Name / Office Held / Age	Area of Expertise/Function
Steve Bajic President, Chief Executive Officer and Director Age 37	As the President, Chief Executive Officer and director, Mr. Bajic is responsible for the overall management of the affairs and business of our company
Martin Bajic Chief Financial Officer Age: 30	As the Chief Financial Officer, Mr. Bajic is responsible for the financial management of the affairs of our company
Giovanni Lopez Director Age: 36	As a director, Mr. Lopez is responsible for the management and supervision of the affairs and business of our company
Denny Roman Director Age: 35	As a director, Mr. Roman is responsible for the management and supervision of the affairs and business of our company

Steve Bajic - President, Chief Executive Officer and Director

Mr. Bajic has been our President, Chief Executive Officer and a director of our company since March 16, 2006. Mr. Bajic obtained a financial management diploma majoring in finance from the British Columbia Institute of Technology in 1994. Mr. Bajic is currently a director and officer of Cassidy

- 23 -

Gold Corp. and Navasota Resources Ltd., resource exploration companies listed on the TSX Venture Exchange. Mr. Bajic is also a director and officer of Providence Capital Corp. and Sieger Capital Management Ltd., Capital Pool Companies listed on the TSX Venture Exchange.

Since 1996, Mr. Bajic has run LF Ventures Inc., a private company offering financial and business consulting services to public and private companies. He has raised capital for numerous companies at all stages of development and has held various other officer and director positions.

Martin Bajic – Chief Financial Officer

Mr. Bajic has been our Chief Financial Officer since August 22, 2006. Mr. Bajic is a Chartered Accountant and Supervisor with Cinnamon Jang Willoughby of Burnaby, British Columbia. He has experience in the audit of public company financial statements, public reporting disclosure requirements and U.S. public company reporting. Mr. Bajic holds a Bachelor of Arts degree from the University of British Columbia.

Giovanni Lopez - Director

Mr. Lopez has been mortgage consultant with Ambro & Associates since 1994 and has also run his own small business designing direct mail campaigns; and coordinating focus groups and trade show presentations. Mr. Lopez holds an English degree from the University of British Columbia.

Denny Roman – Director

Mr. Roman has over 12 years of business experience. After three years in the pension consulting field, Mr. Roman spent eight years with a leading Canadian investment management company in business development and securities research. Currently Mr. Roman is an independent business owner. Mr. Roman is a CFA charter holder and has completed a Bachelor of Commerce degree from the University of British Columbia with a specialization in finance.

Family Relationships

There are no family relationships among any of the directors and/or officers.

There are no arrangements or understandings between any of the directors and/or executive officers and any other person pursuant to which that director and/or executive officer was selected.

B.	Compensation
	Particulars of compensation paid to:

(a)

the Company's Chief Executive Officer ("CEO");

(b)

the Company's Chief Financial Officer ("CFO");

(c)

each of the Company's three most highly compensated executive officers, other that the CEO and the CFO, who were serving as executive officers at the end of the most recently completed financial year and whose total salary and bonus exceeded $150,000 per year; or

- 24 -

(d)

any additional individuals for whom disclosure would have been provided under (c) except that the individual was not serving as an officer of the Company at the end of the most recently completed financial year;

(each, a "Named Executive Officer") is set out in the summary compensation table:

SUMMARY COMPENSATION TABLE
		Annual Compensation			Long Term Compensation
					Awards ⁽¹⁾		Payouts
Name and Principal Position	Year	Salary	Bonus	Other Annual Compen-sation ⁽²⁾	Securities Under Options/ SARs Granted	Restricted Shares or Restricted Share Units	LTIP Payouts	All Other Compen-sation
Steve Bajic⁽³⁾ President & CEO	2006 2005 2004	Nil N/A N/A	Nil N/A N/A	$40,777⁽⁴⁾ N/A N/A	500,000 N/A N/A	Nil N/A N/A	Nil N/A N/A	Nil N/A N/A
Martin Bajic⁽⁵⁾ CFO	2006 2005 2004	Nil N/A N/A	Nil N/A N/A	$5,000 N/A N/A	200,000 N/A N/A	Nil N/A N/A	Nil N/A N/A	Nil N/A N/A
Richard Bachman⁽⁶⁾ Former President and CEO	2006 2005 2004	Nil Nil Nil	Nil Nil Nil	Nil $95,346⁽⁷⁾ $59,561	Nil Nil 1,000,000⁽¹⁰⁾	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Michael Sweatman⁽⁸⁾ Former CFO	2006 2005 2004	Nil Nil Nil	Nil Nil Nil	$22,349⁽⁹⁾ $21,725 $32,069	Nil Nil 100,000⁽¹⁰⁾	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Gregory Burnett⁽¹¹⁾ Former President and CEO	2006 2005 2004	Nil Nil Nil	Nil Nil Nil	$6,849 $29,074⁽¹²⁾ $43,315	Nil Nil 200,000⁽¹⁰⁾	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

⁽¹⁾	The Company has not granted any restricted shares or restricted shares units, stock appreciation rights or long-term incentive plan payouts to the Named Executive Officers during the fiscal years indicated.

⁽²⁾	The value of perquisites and other personal benefits, securities and property for the Named Executive Officers that do not exceed the lesser of $50,000, or 10% of the total of the annual salary and bonus, are not reported herein.

⁽³⁾	Mr. Bajic was appointed President and Chief Executive Officer of the Company on March 20, 2006.

⁽⁴⁾	LF Ventures Inc., a company controlled by Mr. Bajic, received $40,777 from the Company during the fiscal year ended December 31, 2006.

⁽⁵⁾	Mr. Bajic was appointed Chief Financial Officer of the Company on August 22, 2006.

⁽⁶⁾	Mr. Bachman was appointed President and Chief Executive Officer and a director of the Company from May 7, 2004 to January 24, 2006.

⁽⁷⁾	Minera Teles Pires Inc., a company controlled by Mr. Bachman, received $95,346 from the Company during the fiscal year ended December 31, 2005.

⁽⁸⁾	Michael Sweatman was appointed the Chief Financial Officer and Director of the Company on May 7, 2004 to August 14, 2006.

- 25 -

⁽⁹⁾	MDS Management Ltd., a company controlled by Mr. Sweatman, received $21,725 from the Company during the fiscal year ended December 31, 2005.

⁽¹⁰⁾	Stock options to purchase Shares awarded to former directors and officers of the Company at the exercise price of $0.02 per Share which stock options are exercisable until May 7, 2009. The stock options were issued on May 7, 2004.

⁽¹¹⁾	Mr. Burnett was the President and Chief Executive Officer of the Company from June 2000 to May 7, 2004. He was the Vice President, Corporate Affairs and Secretary from May 7, 2004 to March 16, 2006.

⁽¹²⁾	Carob Management Ltd., a company controlled by Mr. Burnett, received $29,074 from the Company during the fiscal year ended December 31, 2005.

There were no Named Executive Officers serving as executive officers at the end of the most recently completed financial year or executive officers who served during the financial year whose salaries exceeded $150,000 per year.

Long-Term Incentive Plans

There were no long-term incentive plans in place for any of the Named Executive Officers of the Company during the most recently completed financial year, and as such, no long-term incentive plan awards were granted to any of the Named Executive Officers.

Options and Stock Appreciation Rights

Particulars with respect to Options/SARS granted to Named Executive Officer's during the Company's most recently completed financial year are as follows:

Name	Securities Under Options/SARs Granted (#)	Percent of Total Options/SARs Granted to Employees in Financial Year	Exercise or Base Price ($/Security)	Market Value of Securities Underlying Options/SARs on the Date of Grant ($/Security)	Expiration Date
Steve Bajic	500,000⁽¹⁾	41.67%	$0.35	$0.29	October 18, 2011
Martin Bajic	200,000⁽¹⁾	16.67%	$0.35	$0.29	October 18, 2011
Ramon Farias	100,000⁽¹⁾	8.3%	$0.35	$0.29	October 18, 2011
(1) These options were granted on October 18, 2006

Aggregated Option/SAR Exercises and Financial Year-End Option/SAR Values

No Options/SARS were exercised by Named Executive Officer's during the Company's most recently completed financial year and year.

Option and SAR Repricings

No Options/SARS granted to Named Executive Officer's were repriced during the Company's most recently completed financial year.

- 26 -

Defined Benefit or Actuarial Plan Disclosure

We do not provide retirement benefits for directors and executive officers. No funds were set aside or accrued by the Company during the fiscal year ended December 31, 2006 to provide pension, retirement or similar benefits for our directors or officers pursuant to any existing plan provided or contributed to by us or our subsidiaries.

Termination of Employment, Change in Responsibilities and Employment Contracts

There are no employment contracts or compensatory plans or arrangements between the Company and any of the Named Executive Officers.

The Company has no plan or arrangement whereby any of the Named Executive Officers may be compensated in an amount exceeding $100,000 in the event of the Named Executive Officer's resignation, retirement or other termination of employment, or in the event of a change of control of the Company or a change in the Named Executive Officer's responsibilities following such a change of control.

Compensation Committee

The Company currently does not operate with a compensation committee. The Company's entire Board of Directors conducts an annual review in regards to the compensation of the CEO, CFO and the Named Executive Officers. To make its recommendations on such compensation, the Board of Directors takes into account the type of compensation and the amounts paid to such officers of comparable publicly traded Canadian companies.

Compensation Of Directors

No compensation was paid to any director of the Company for services rendered as a director during the Company's most recently completed financial year.

During the Company's most recently completed financial year, there were no standard compensation arrangements, or other arrangements in addition to or in lieu of standard arrangements, under which the directors of the Company were compensated for services in their capacity as directors (including any additional amounts payable for committee participation or special assignments), or for services as consultants or experts.

Particulars with respect to Options/SARS granted to Company directors during the Company's most recently completed financial year are as follows:

Name	Securities Under Options/SARs Granted (#)	Percent of Total Options/SARs Granted to Employees in Financial Year	Exercise or Base Price ($/Security)	Market Value of Securities Underlying Options/SARs on the Date of Grant ($/Security)	Expiration Date
Steve Bajic	500,000⁽¹⁾	41.67%	$0.35	$0.29	October 18, 2011
Giovanni Lopez	100,000⁽¹⁾	8.3%	$0.35	$0.29	October 18, 2011

- 27 -

^{(1) These options were granted on October 18, 2006}
C. Board Practices

The directors are re-elected at the annual general meeting of our shareholders and our officers are re-elected at a directors' meeting following the annual general meeting. The last annual general meeting was held on June 27, 2007, and each of our current directors and officers will continue to hold his respective office until his successor is elected or appointed at the next annual general meeting, unless his office is earlier vacated under any of the relevant provisions of our Articles or of the Ontario Business Corporations Act.

There are no service contracts between our company and any of our officers, directors or employees providing for benefits upon termination of employment.

Audit Committee

As of the date of this annual report, our entire board of directors functions as our audit committee. The audit committee reviews and approves the scope of the audit procedures employed by our independent auditors, reviews the results of the auditor's examination, the scope of audits, the auditor's opinion on the adequacy of internal controls and quality of financial reporting and our accounting and reporting principles, policies and practices, as well as our accounting, financial and operating controls. The audit committee also reports to the board of directors with respect to such matters and recommends the selection of independent auditors. Before financial statements that are to be submitted to the shareholders at an annual general meeting are considered by the board of directors, such financial statements are submitted to the audit committee for review with the independent auditors, following which the report of the audit committee on the financial statements is submitted to the board of directors. The audit committee acted by unanimous consent resolution during the year ended December 31, 2006.

Remuneration Committee

We do not have a standing remuneration committee but our entire board of directors acts as our compensation committee. We do not believe it is necessary to have a standing remuneration committee because we believe that the functions of such a committee can be adequately performed by our board of directors.

D.	Employees

During the fiscal years ended December 31, 2006, 2005 and 2004, we did not have any employees. Our company is currently operated by Steve Bajic as our Present and Chief Executive Officer and Martin Bajic as our Chief Financial Officer.

We do not currently have any paid employees and have not experienced a significant change in the number of people we employ.

E.	Share Ownership

There were 36,041,298 common shares, 800,000 stock options and 814,140 share purchase warrants issued and outstanding as of June 26, 2007. Of the 36,041,298 common shares issued and outstanding as of June 26, 2007, our directors and officers owned the following common shares:

- 28 -

Name Office Held	Number of Common Shares Beneficially Owned as of May 11, 2006	Percentage⁽¹⁾
Steve Bajic President, Chief Executive Officer and Director	525,000⁽²⁾	1.5%
Martin Bajic Chief Financial Officer	150,000⁽³⁾	*
Giovanni Lopez Director	75,000⁽⁴⁾	*
Denny Roman Director	Nil	N/A
* Less than 1%.

⁽¹⁾	Based on 36,041,298 common shares issued and outstanding as at June 26, 2007, and the number of shares issuable upon the exercise of issued and outstanding stock options and share purchase warrants.

⁽²⁾	Includes options to acquire an aggregate of 375,000 shares of common stock exercisable within 60 days.

⁽³⁾	Includes options to acquire an aggregate of 150,000 shares of common stock exercisable within 60 days.

⁽⁴⁾	Includes options to acquire an aggregate of 75,000 shares of common stock exercisable within 60 days.

The voting rights attached to the common shares owned by our officers and directors do not differ from those voting rights attached to shares owned by people who are not officers or directors of our company.

There were no long-term incentive awards made to our executive officers during the fiscal year ended December 31, 2006 nor are there pension plan benefits in place for our executive officers.

Stock Option Plan

We have an incentive stock option plan that provides for the grant of incentive stock options to purchase our common shares to our directors, officers and key employees and other persons providing ongoing services to us. Our stock option plan is administered by our board of directors. The maximum number of our common shares which may be reserved and set aside for issuance under our stock option plan is 3,000,000 common shares. Each option upon its exercise entitles the grantee to one common share. The exercise price of common shares subject to an option will be determined by the board of directors at the time of grant. Non-incentive stock options may be granted under our stock option plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by our board of directors. Incentive stock options may be granted under our stock option plan for an exercise period of up to five years from the date of grant.

During the year ended December 31, 2006, we granted the following stock options:

- 29 -

Name of Optionees	Number of Options	Exercise Price ($)	Director/ Officer/ Employee/ Consultant	Grant Date	Expiry Date	Vesting Terms
Steve Bajic Chief Executive Officer, President and Director	500,000	$0.20⁽²⁾	Director/ Officer	October 18, 2006	October 18 2011	⁽¹⁾
Martin Bajic Chief Financial Officer	200,000	$0.20⁽²⁾	Officer	October 18, 2006	October 18, 2011	⁽¹⁾
Giovanni Lopez Director	100,000	$0.20⁽²⁾	Director	October 18, 2006	October 18, 2011	⁽¹⁾
Total	800,000

⁽¹⁾

The Options vest as to (a) 25% of the Options on the date of grant; and (b) commencing three months from the date of grant, the Options vest as to 25% of the Options every three months until the Options are fully vested.

⁽²⁾

These options were repriced from $0.35 to $0.20 on March 5, 2007.

ITEM 7	Major Shareholders and Related Party Transactions
A.	Major Shareholders

There were 36,041,298 shares of our common stock issued and outstanding as of June 26, 2007. The following table sets forth, as of June 26, 2007, persons known to us to be the beneficial owner of more than five (5%) of our common shares:

Name	Amount Owned⁽¹⁾	Percent of Class⁽²⁾
Prism Holdings Inc.	1,890,000	5.2%

⁽¹⁾	We believe that all persons hold legal title and have no knowledge of actual ownership.

⁽²⁾	The percentages are based upon 36,041,298 shares of our common stock issued and outstanding as at June 26, 2007, and the number of shares issuable upon the exercise of issued and outstanding stock options and share purchase warrants.

There has been no significant change in the percentage ownership of any of our major shareholders during the years ended December 31, 2006, 2005 or 2004.

The voting rights of our major shareholders do not differ from the voting rights of holders of our company's shares who are not major shareholders.

As of June 27, 2007, the registrar and transfer agent for our company reported that there were 36,041,298 shares of our common stock issued and outstanding. Of those common shares issued and outstanding, 18,631,119 common shares were registered to Canadian residents (2,137 shareholders), 9,001,533 common shares were registered to residents of the United States (67 shareholders) and 8,408,071 common shares were registered to residents of other foreign countries (26 shareholders). The

- 30 -

difference of 545 common shares between the number of issued and outstanding and the total shares from all jurisdictions is due to fractional rounding.

To the best of our knowledge, we are not directly or indirectly owned or controlled by another corporation, by any foreign government or by any other natural or legal person.

There are no arrangements known to us, the operation of which may at a subsequent date result in a change in the control of our company.

B.	Related Party Transactions

Since the beginning of our company's preceding three financial years up to June 27, 2007, we entered into the following related party transactions:

(a)

we incurred consulting fees of $132,655 and management fees of $40,777 with directors and former directors during the year ended December 31, 2006;

(b)

we settled accounts payable to a director of $30,000 by issuing 100,000 shares of our common stock during the year ended December 31, 2006;

(c)

we owed $16,653 in accounts payable and accrued expenses to directors and former directors as at December 31, 2006; and

(d)

resource properties included consulting fees paid to directors of $83,822 during the year ended December 31, 2006;

(e)

during the year ended December 31, 2005, our company incurred consulting fees of $210,504 with directors and former directors;

(f)

accounts payable and accrued expenses for the year ended December 31, 2005 included $85,008 which were owed to directors and former directors;

(g)

during the year ended December 31, 2005, the corporate optionor of the Dorado and Nevada resource properties was controlled by a director;

(h)

during the year ended December 31, 2004, our company incurred consulting fees of $322,305 and rent of $1,500 with directors and former directors;

(i)

accounts payable and accrued expenses for the year ended December 31, 2004 included $993, which was owed to directors and former directors;

(j)

other receivables for the year ended December 31, 2004 included a retainer of $7,568 which was paid to a director for consulting fees;

(k)

loans payable for the year ended December 31, 2004 included $43,500 owed to a shareholder; and

(l)

during the year ended December 31, 2004, the corporate optionor of the Dorado and Nevada resource properties was controlled by a director.

- 31 -

ITEM 8

Financial Information

Our financial statements are stated in Canadian dollars (CDN$) and are prepared in accordance with Canadian generally accepted accounting principles. In this annual report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars.

Financial Statements Filed as Part of the Annual Report:

Financial Statements for the Years Ended December 31, 2006 and 2005 (audited):

Auditors' Report dated April 30, 2007, together with Comments by Auditors for U.S. Readers on Canada - U.S. Reporting Conflict.

Consolidated Balance Sheets for the years ended December 31, 2006 and 2005.

Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Stockholders' Equity for the years ended December 31, 2006 and 2005.

Notes to Consolidated Financial Statements.

See Item 18 "Financial Statements".

Legal Proceedings

There are no pending legal proceedings to which we are a party or of which any of our property is the subject. There are no legal proceedings to which any director, officer or affiliate of our company or any associate of any such director, officer or affiliate of our company is a party or has a material interest adverse to us.

Dividend Distributions

Holders of our common shares are entitled to receive such dividends as may be declared from time to time by our board of directors, in its discretion, out of funds legally available for that purpose. We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future.

ITEM 9	The Offer and Listing
A.	Offer and Listing Details

Price History

Our shares began trading on the OTC Bulletin Board on April 16, 2004 under the symbol TRIVF. On June 2, 2004 our symbol changed from "TRIVF" to "PNAMF" and our CUSIP number changed to 697840 10 6. The following table sets forth the high and low sales of prices of our common shares on the OTC Bulletin Board for the periods indicated.

- 32 -

	OTC Bulletin Board
	High (U.S.$)	Low (U.S.$)
Annual Highs and Lows
2005	0.62	0.10
2006	0.99	0.12
Quarterly Highs and Lows
2005
First Quarter	0.62	0.25
Second Quarter⁽¹⁾	0.26	0.16
Third Quarter	0.22	0.14
Fourth Quarter	0.26	0.10
2006
First Quarter	0.99	0.26
Second Quarter	0.99	0.33
Third Quarter	0.51	0.26
Fourth Quarter	0.32	0.12
Monthly Highs and Lows
2007
January	0.22	0.14
February	0.23	0.15
March	0.17	0.10
April	0.15	0.08
May	0.13	0.09

^{(1) We effected a reverse
split on the basis of 7 to 1 on June 2, 2004.}

The transfer of our common shares is managed by our transfer agent, Pacific Corporate Trust Company, 3rd Floor – 510 Burrard Street, Vancouver, British Columbia, V6C 3B9 (Telephone: 604.689.9853; Facsimile: 604.689.8144).

B.	Plan of Distribution

Not applicable.

C.	Markets

Our common shares are quoted on the Over-the-Counter Bulletin Board (as they have been quoted since April 16, 2004). Our symbol is "PNAMF" and our CUSIP number is 697840 10 6.

D.	Selling Shareholders

Not applicable.

E.	Dilution

Not applicable.

F.	Expenses of the Issuer

Not applicable.

- 33 -

ITEM 10	Additional Information
A.	Share Capital

Not applicable.

B.	Memorandum and Articles of Association

The information required by this section is incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2001.

C.	Material Contracts

We entered into the following material contracts during the two years immediately preceding the date of this annual report:

1.	Settlement Agreement dated January 20, 2006 with Richard Bachman.
2.	Termination Agreement dated February 6, 2006 with Matthew Mason and Pan American Nevada.
3.	Letter Agreement dated March 15, 2006 with Aztec Copper Inc.
4.	Subscription Agreement dated March 22, 2006 with Epsom Investment Services N.V.

5.	Letter Agreement dated May 10, 2006 between Pan American Gold Corporation and Ramon Farias.

6.	Debt Settlement and Subscription Agreement dated October 5, 2006 with Ramon Farias.
D.	Exchange Controls

There are no government laws, decrees or regulations in Canada which restrict the export or import of capital or which affect the remittance of dividends, interest or other payments to non-resident holders of our common shares. Any remittances of dividends to United States residents and to other non-residents are, however, subject to withholding tax. See "Taxation" below.

E.	Taxation

Canadian Federal Income Taxation

We consider that the following summary fairly describes the principal Canadian federal income tax consequences applicable to a holder of our common shares who at all material times deals at arm's length with our company, who holds all common shares as capital property, who is resident in the United States, who is not a resident of Canada and who does not use or hold, and is not deemed to use or hold, his common shares of our company in connection with carrying on a business in Canada (a "non-resident holder"). It is assumed that the common shares will at all material times be listed on a stock exchange that is prescribed for purposes of the Income Tax Act (Canada) (the "ITA") and regulations thereunder. Investors should be aware that the Canadian federal income tax consequences applicable to holders of our common shares will change if, for any reason, we cease to be listed on a prescribed stock exchange. Accordingly, holders and prospective holders of our common shares should consult with their own tax advisors with respect to the income tax consequences of them purchasing, owing and disposing of our common shares should we cease to be listed on a prescribed stock exchange.

- 34 -

This summary is based upon the current provisions of the ITA, the regulations thereunder, the Canada-United States Tax Convention as amended by the Protocols thereto (the "Treaty") as at the date of the registration statement and the currently publicly announced administrative and assessing policies of the Canada Revenue Agency (the "CRA"). This summary does not take into account Canadian provincial income tax consequences. This description is not exhaustive of all possible Canadian federal income tax consequences and does not take into account or anticipate any changes in law, whether by legislative, governmental or judicial action. This summary does, however, take into account all specific proposals to amend the ITA and regulations thereunder, publicly announced by the Government of Canada to the date hereof.

This summary does not address potential tax effects relevant to our company or those tax considerations that depend upon circumstances specific to each investor. Accordingly, holders and prospective holders of our common shares should consult with their own tax advisors with respect to the income tax consequences to them of purchasing, owning and disposing of common shares in our company.

Dividends

The ITA provides that dividends and other distributions deemed to be dividends paid or deemed to be paid by a Canadian resident corporation (such as our company) to a non-resident of Canada shall be subject to a non-resident withholding tax equal to 25% of the gross amount of the dividend of deemed dividend. Provisions in the ITA relating to dividend and deemed dividend payments to and gains realized by non-residents of Canada, who are residents of the United States, are subject to the Treaty. The Treaty may reduce the withholding tax rate on dividends as discussed below.

Article X of the Treaty as amended by the US-Canada Protocol ratified on November 9, 1995 provides a 5% withholding tax on gross dividends or deemed dividends paid to a United States corporation which beneficially owns at least 10% of the voting stock of the company paying the dividend. In cases where dividends or deemed dividends are paid to a United States resident (other than a corporation) or a United States corporation which beneficially owns less than 10% of the voting stock of a company, a withholding tax of 15% is imposed on the gross amount of the dividend or deemed dividend paid. We would be required to withhold any such tax from the dividend and remit the tax directly to CRA for the account of the investor.

The reduction in withholding tax from 25%, pursuant to the Treaty, will not be available:

(a) if the shares in respect of which the dividends are paid formed part of the business property or were otherwise effectively connected with a permanent establishment or fixed base that the holder has or had in Canada within the 12 months preceding the disposition, or

(b) the holder is a U.S. LLC which is not subject to tax in the U.S.

The Treaty generally exempts from Canadian income tax dividends paid to a religious, scientific, literary, educational or charitable organization or to an organization exclusively administering a pension, retirement or employee benefit fund or plan, if the organization is resident in the U.S. and is exempt from income tax under the laws of the U.S.

Capital Gains

A non-resident holder is not subject to tax under the ITA in respect of a capital gain realized upon the disposition of one of our shares unless the share represents "taxable Canadian property" to the holder

- 35 -

thereof. Our common shares will be considered taxable Canadian property to a non-resident holder only if-.

(a) the non-resident holder,

(b) persons with whom the non-resident holder did not deal at arm's length - or,

owned not less than 25% of the issued shares of any class or series of our company at any time during the five year period preceding the disposition. In the case of a non-resident holder to whom shares of our company represent taxable Canadian property and who is resident in the United States, no Canadian taxes will generally be payable on a capital gain realized on such shares by reason of the Treaty unless:

(a) the value of such shares is derived principally from real property (including resource property) situated in Canada,

(b) the holder was resident in Canada for 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him when he ceased to be a resident of Canada,

(c) they formed part of the business property or were otherwise effectively connected with a permanent establishment or fixed base that the holder has or bad in Canada within the 12 months preceding the disposition, or

(d) the holder is a U.S. LLC which is not subject to tax in the U.S.

If subject to Canadian tax on such a disposition, the taxpayer's capital gain (or capital loss) from a disposition is the amount by which the taxpayer's proceeds of disposition exceed (or are exceeded by) the aggregate of the taxpayer's adjusted cost base of the shares and reasonable expenses of disposition. For Canadian income tax purposes, the "taxable capital gain" is equal to one-half of the capital gain.

United States Federal Income Taxation

The following is a discussion of the material United States Federal income tax consequences, under current law, applicable to a U.S. Holder (as defined below) of our common shares who holds such shares as capital assets. This discussion does not address all potentially relevant Federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local, or foreign tax consequences. (See "Canadian Federal Income Tax Consequences" above.)

The following discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, published Internal Revenue Service ("IRS") rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.

The discussion below does not address potential tax effects relevant to our company or those tax considerations that depend upon circumstances specific to each investor. In addition, this

- 36 -

discussion does not address the tax consequences that may be relevant to particular investors subject to special treatment under certain U.S. Federal income tax laws, such as, dealers in securities, tax-exempt entities, banks, insurance companies and non-U.S. Holders. Purchasers of the common stock should therefore satisfy themselves as to the overall tax consequences of their ownership of the common stock, including the State, local and foreign tax consequences thereof (which are not reviewed herein), and should consult their own tax advisors with respect to their particular circumstances.

U.S. Holders

As used herein, a "U.S. Holder" includes a beneficial holder of common shares of our company who is a citizen or resident of the United States, a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof, any trust if a US court is able to exercise primary supervision over the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust, any entity created or organized in the United States which is taxable as a corporation for U.S. tax purposes and any other person or entity whose ownership of common shares of our company is effectively connected with the conduct of a trade or business in the United States. A U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals or foreign corporations whose ownership of our common shares is not effectively connected with the conduct of a trade or business in the United States and shareholders who acquired their shares through the exercise of employee stock options or otherwise as compensation.

Dividend Distribution on Shares of our Company

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to the common shares of our company are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions to the extent that we have current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be deducted or may be credited against actual tax payable, subject to certain limitations and other complex rules, against the U.S. Holder's United States Federal taxable income. See "Foreign Tax Credit" below. To the extent that distributions exceed our current or accumulated earnings and profits, they will be treated first as a return of capital to the extent of the shareholder's basis in the common shares of our company and thereafter as gain from the sale or exchange of the common shares of our company. Preferential tax rates for net long term capital gains may be applicable to a U.S. Holder which is an individual, estate or trust.

In general, dividends paid on our common shares will not be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations.

Foreign Tax Credit

A U.S. Holder who pays (or who has had withheld from distributions) Canadian income tax with respect to the ownership of our common shares may be entitled, at the election of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. This election is made on a year-by-year basis and generally applies to all foreign income taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder's United States income tax liability that the U.S. Holder's foreign source income bears to his or its world-wide taxable income. In determining the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern income such as

- 37 -

"passive income", "high withholding tax interest", "financial services income", "shipping income" and certain other classifications of income. A U.S. Holder who is treated as a domestic U.S. corporation owning 10% or more of our voting stock is also entitled to a deemed paid foreign tax credit in certain circumstances for the underlying foreign tax of our company related to dividends received or Subpart F income received from us. (See the discussion below of Controlled Foreign Corporations). The availability of the foreign tax credit and the application of the limitations on the foreign tax credit are fact specific and holders and prospective holders of our common shares should consult their own tax advisors regarding their individual circumstances.

Disposition of Common Shares

If a "U.S. Holder" is holding shares as a capital asset, a gain or loss realized on a sale of our common shares will generally be a capital gain or loss, and will be long-term if the shareholder has a holding period of more than one year. However, gains realized upon sale of our common shares may, under certain circumstances, be treated as ordinary income, if we were determined to be a "collapsible corporation" within the meaning of Code Section 341 based on the facts in existence on the date of the sale (See below for definition of "collapsible corporation"). The amount of gain or loss recognized by a selling U.S. Holder will be measured by the difference between (i) the amount realized on the sale and (ii) his tax basis in our common shares. Capital losses are deductible only to the extent of capital gains. However, in the case of taxpayers other than corporations (U.S.)$3,000 ($1,500 for married individuals filing separately) of capital losses are deductible against ordinary income annually. In the case of individuals and other non-corporate taxpayers, capital losses that are not currently deductible may be carried forward to other years. In the case of corporations, capital losses that are not currently deductible are carried back to each of the three years preceding the loss year and forward to each of the five years succeeding the loss year.

A "collapsible corporation" is a corporation that is formed or availed principally to manufacture, construct, produce, or purchase prescribed types or property that the corporation holds for less than three years and that generally would produce ordinary income on its disposition, with a view to the stockholders selling or exchanging their stock and thus realizing gain before the corporation realizes two thirds of the taxable income to be derived from prescribed property. Prescribed property includes: stock in trade and inventory; property held primarily for sale to customers in the ordinary course of business; unrealized receivables or fees, consisting of rights to payment for noncapital assets delivered or to be delivered, or services rendered or to be rendered to the extent not previously included in income, but excluding receivables from selling property that is not prescribed; and property gain on the sale of which is subject to the capital gain/ordinary loss rule. Generally, a shareholder who owns directly or indirectly 5 percent or less of the outstanding stock of the corporation may treat gain on the sale of his shares as capital gain.

Other Considerations for U.S. Holders

In the following circumstances, the above sections of this discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of common shares of the Registrant. Our management is of the opinion that there is little, if not, any likelihood that we will be deemed a "Foreign Personal Holding Company", a "Foreign Investment Company" or a "Controlled Foreign Corporation" (each as defined below) under current and anticipated conditions.

Foreign Personal Holding Company

If at any time during a taxable year more than 50% of the total combined voting power or the total value of our outstanding shares is owned, actually or constructively, by five or fewer individuals

- 38 -

who are citizens or residents of the United States and 60% or more of our gross income for such year was derived from certain passive sources (e.g., from dividends received from its subsidiaries), we would be treated as a "foreign personal holding company." In that event, U.S. Holders that hold common shares in our capital would be required to include in income for such year their allocable portion of our passive income which would have been treated as a dividend had that passive income actually been distributed.

Foreign Investment Company

If 50% or more of the combined voting power or total value of our outstanding shares are held, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and we are found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that we might be treated as a "foreign investment company" as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging our common shares to be treated as ordinary income rather than capital gains.

Passive Foreign Investment Company

A U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a passive foreign investment company ("PFIC") is subject to U.S. federal income taxation of that foreign corporation under one of two alternative tax methods at the election of each such U.S. Holder.

Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States and, for any taxable year, either (i) 75% or more of its gross income is "passive income," which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by value (or, if the company is a controlled foreign corporation or makes an election, adjusted tax basis), of its assets that produce or are held for the production of "passive income" is 50% or more. For taxable years of U.S. persons beginning after December 31, 1997, and for tax years of foreign corporations ending with or within such tax years, the Taxpayer Relief Act of 1997 provides that publicly traded corporations must apply this test on a fair market value basis only. The Registrant believes that it is a PFIC.

As a PFIC, each U.S. Holder must determine under which of the alternative tax methods it wishes to be taxed. Under one method, a U.S. Holder who elects in a timely manner to treat the Registrant as a Qualified Electing Fund ("QEF"), as defined in the Code, (an "Electing U.S. Holder") will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year in which we qualify as a PFIC on his pro-rata share of our (i) "net capital gain" (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder and (ii) "ordinary earnings" (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case, for the U.S. Holder's taxable year in which (or with which) our taxable year ends, regardless of whether such amounts are actually distributed. Such an election, once made shall apply to all subsequent years unless revoked with the consent of the IRS.

A QEF election also allows the Electing U.S. Holder to (i) generally treat any gain realized on the disposition of his common shares (or deemed to be realized on the pledge of his common shares) as capital gain; (ii) treat his share of our net capital gain, if any, as long-term capital gain instead of ordinary income, and (iii) either avoid interest charges resulting from PFIC status altogether (see discussion of interest charge below), or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of our annual realized net capital gain and ordinary earnings subject, however,

- 39 -

to an interest charge. If the Electing U.S. Holder is an individual, such an interest charge would be not deductible.

The procedure a U.S. Holder must comply with in making an timely QEF election will depend on whether the year of the election is the first year in the U.S. Holder's holding period in which we are a PFIC. If the U.S. Holder makes a QEF election in such first year, (sometimes referred to as a "Pedigreed QEF Election"), then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files its tax return for such first year. If, however, we qualified as a PFIC in a prior year, then the U.S. Holder may make an "Unpedigreed QEF Election" by recognizing as an "excess distribution" (i) under the rules of Section 1291 (discussed below), any gain that he would otherwise recognize if the U.S. Holder sold his stock on the qualification date (Deemed Sale Election) or (ii) if we are a controlled foreign corporation ("CFC"), the Holder's pro rata share of the corporation's earnings and profits (Deemed Dividend Election) (But see "Elimination of Overlap Between Subpart F Rules and PFIC Provisions"). The effect of either the deemed sale election or the deemed dividend election is to pay all prior deferred tax, to pay interest on the tax deferral and to be treated thereafter as a Pedigreed QEF as discussed in the prior paragraph. With respect to a situation in which a Pedigreed QEF election is made, if we no longer qualify as a PFIC in a subsequent year, normal Code rules and not the PFIC rules will apply.

If a U.S. Holder has not made a QEF Election at any time (a "Non-electing U.S. Holder"), then special taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be realized by reason of a pledge) of his common shares and (ii) certain "excess distributions", as specially defined, by our company. An "excess distribution" is any current-year distribution in respect of PFIC stock that represents a rateable portion of the total distributions in respect of the stock during the year that exceed 125 percent of the average amount of distributions in respect of the stock during the three preceding years.

A Non-electing U.S. Holder generally would be required to pro-rate all gains realized on the disposition of his common shares and all excess distributions over the entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. Holder (other than years prior to our first taxable year during such U.S. Holder's holding period and beginning after January, 1987 for which it was a PFIC) would be taxed at the highest tax rate for each such prior year applicable to ordinary income. The Non-electing U.S. Holder also would be liable for interest on the deferred tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-electing U.S. Holder that is an individual is not allowed a deduction for interest on the deferred tax liability. The portions of gains and distributions that are not characterized as "excess distributions" are subject to tax in the current year under the normal tax rules of the Internal Revenue Code.

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

Under Section 1291(f) of the Code, the Department of the Treasury has issued proposed regulations that would treat as taxable certain transfers of PFIC stock by Non-electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. If a U.S. Holder makes a QEF Election that is not a Pedigreed Election (i.e., it is made after the first year during which we are a PFIC and the U.S. Holder holds our shares) (a "Unpedigreed

- 40 -

Election"), the QEF rules apply prospectively but do not apply to years prior to the year in which the QEF first becomes effective. U.S. Holders should consult their tax advisors regarding the specific consequences of making a Non-Pedigreed QEF Election.

Certain special, generally adverse, rules will apply with respect to the common shares while we are a PFIC whether or not it is treated as a QEF. For example under Section 1297(b)(6) of the Code (as in effect prior to the Taxpayer Relief Act of 1997), a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such stock.

The foregoing discussion is based on currently effective provisions of the Code, existing and proposed regulations thereunder, and current administrative rulings and court decisions, all of which are subject to change. Any such change could affect the validity of this discussion. In addition, the implementation of certain aspects of the PFIC rules requires the issuance of regulations which in many instances have not been promulgated and which may have retroactive effect. There can be no assurance that any of these proposals will be enacted or promulgated, and if so, the form they will take or the effect that they may have on this discussion. Accordingly, and due to the complexity of the PFIC rules, U.S. Holders of the Registrant are strongly urged to consult their own tax advisors concerning the impact of these rules on their investment in our company. For a discussion of the impact of the Taxpayer Relief Act of 1997 on a U.S. Holder of a PFIC, see "Mark-to-Market Election For PFIC Stock Under the Taxpayer Relief Act of 1997" and "Elimination of Overlap Between Subpart F Rules and PFIC Provisions" below.

Mark-to-Market Election for PFIC Stock Under the Taxpayer Relief Act of 1997

The Taxpayer Relief Act of 1997 provides that a U.S. Holder of a PFIC may make a mark-to-market election with respect to the stock of the PFIC if such stock is marketable as defined below. This provision is designed to provide a current inclusion provision for persons that are Non-Electing Holders. Under the election, any excess of the fair market value of the PFIC stock at the close of the tax year over the Holder's adjusted basis in the stock is included in the Holder's income. The Holder may deduct any excess of the adjusted basis of the PFIC stock over its fair market value at the close of the tax year. However, deductions are limited to the net mark-to-market gains on the stock that the Holder included in income in prior tax years, or so called "unreversed inclusions." For purposes of the election, PFIC stock is marketable if it is regularly traded on (1) a national securities exchange that is registered with the SEC, (2) the national market system established under Section II A of the Securities Exchange Act of 1934, or (3) an exchange or market that the IRS determines has rules sufficient to ensure that the market price represents legitimate and sound fair market value.

A Holder's adjusted basis of PFIC stock is increased by the income recognized under the mark-to-market election and decreased by the deductions allowed under the election. If a U.S. Holder owns PFIC stock indirectly through a foreign entity, the basis adjustments apply to the basis of the PFIC stock in the hands of the foreign entity for the purpose of applying the PFIC rules to the tax treatment of the U.S. owner. Similar basis adjustments are made to the basis of the property through which the U.S. persons hold the PFIC stock.

Income recognized under the mark-to-market election and gain on the sale of PFIC stock with respect to which an election is made is treated as ordinary income. Deductions allowed under the election and loss on the sale of PFIC with respect to which an election is made, to the extent that the amount of loss does not exceed the net mark-to-market gains previously included, are treated as ordinary losses. The U.S. or foreign source of any income or losses is determined as if the amount were a gain or loss from the sale of stock in the PFIC.

- 41 -

If PFIC stock is owned by a CFC (discussed below), the CFC is treated as a U.S. person that may make the mark-to-market election. Amounts includible in the CFC's income under the election are treated as foreign personal holding company income, and deductions are allocable to foreign personal holding company income.

The above provisions apply to tax years of U.S. persons beginning after December 31, 1997, and to tax years of foreign corporations ending with or within such tax years of U.S. persons.

The rules of Code Section 1291 applicable to nonqualified funds as discussed above generally do not apply to a U.S. Holder for tax years for which a mark-to-market election is in effect. If Code Section 1291 is applied and a mark-to-market election was in effect for any prior tax year, the U.S. Holder's holding period for the PFIC stock is treated as beginning immediately after the last tax year of the election. However, if a taxpayer makes a mark-to-market election for PFIC stock that is a nonqualified fund after the beginning of a taxpayer's holding period for such stock, a co-ordination rule applies to ensure that the taxpayer does not avoid the interest charge with respect to amounts attributable to periods before the election.

Controlled Foreign Corporation Status

If more than 50% of the voting power of all classes of stock or the total value of the stock of our company is owned, directly or indirectly, by U.S. Holders, each of whom own after applying rules of attribution 10% or more of the total combined voting power of all classes of stock of our company, we would be treated as a "controlled foreign corporation" or "CFC" under Subpart F of the Code. This classification would bring into effect many complex results including the required inclusion by such 10% U.S. Holders in income of their pro rata shares of "Subpart F income" (as defined by the Code) of our company and our earnings invested in "U.S. property" (as defined by Section 956 of the Code). In addition, under Section 1248 of the Code if we are considered a CFC at any time during the five year period ending with the sale or exchange of its stock, gain from the sale or exchange of common shares of our company by such a 10% U.S. Holder of our common stock at any time during the five year period ending with the sale or exchange is treated as ordinary dividend income to the extent of our earnings and profits attributable to the stock sold or exchanged. Because of the complexity of Subpart F, and because we may never be a CFC, a more detailed review of these rules is beyond of the scope of this discussion.

Elimination of Overlap Between Subpart F Rules and PFIC Provisions

Under the Taxpayer Relief Act of 1997, a PFIC that is also a CFC will not be treated as a PFIC with respect to certain 10% U.S. Holders. For the exception to apply, (i) the corporation must be a CFC within the meaning of section 957(a) of the Code and (ii) the U.S. Holder must be subject to the current inclusion rules of Subpart F with respect to such corporation (i.e., the U.S. Holder is a "United States Shareholder," see "Controlled Foreign Corporation," above). The exception only applies to that portion of a U.S. Holder's holding period beginning after December 31, 1997. For that portion of a United States Holder before January 1, 1998, the ordinary PFIC and QEF rules continue to apply.

As a result of this new provision, if we were ever to become a CFC, U.S. Holders who are currently taxed on their pro rata shares of Subpart F income of a PFIC which is also a CFC will not be subject to the PFIC provisions with respect to the same stock if they have previously made a Pedigreed QEF Election. The PFIC provisions will however continue to apply to U.S Holders for any periods in which Subpart F does not apply (for example he is no longer a 10% Holder or we are no longer a CFC) and to U.S. Holders that did not make a Pedigreed QEF Election unless the U.S. Holder elects to recognize gain on the PFIC shares held in our company as if those shares had been sold.

- 42 -

ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES OF OUR COMPANY.

H.	Documents on Display

Documents concerning our company referred to in this annual report may be viewed during normal business hours at our registered and records office at Suite 800 - 885 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3H1 by making an appointment.

I.	Subsidiary Information

As at the date of this annual report, we have two subsidiaries, Pan American Gold Corporation, a company incorporated pursuant to the laws of the State of Nevada and Compania Minera P.A.M. de C.V., a company incorporated pursuant to the laws of Mexico.

ITEM 11	Quantitative and Qualitative Disclosures About Market Risk
	Not applicable.
ITEM 12	Description of Securities Other Than Equity Securities
	Not applicable.

PART II

ITEM 13	Defaults, Dividend Arrearages and Delinquencies
	Not applicable.
ITEM 14	Material Modifications to the Rights of Security Holders and Use of Proceeds
	Not applicable.
ITEM 15	Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures as of the end of the period covered by this annual report, being December 31, 2006. This evaluation was carried out under the supervision and with the participation of our company's management, including our company's President and Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our company's President and Chief Executive Officer and our Chief Financial Officer concluded that our company's disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our

- 43 -

company's reports filed under the Exchange Act is accumulated and communicated to management, including our company's President and Chief Executive Officer and our Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

ITEM 16	Reserved
ITEM 16A	Audit Committee Financial Expert

Our board of directors has determined that it does not have a member of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-B, and is "independent" as the term is defined by Nasdaq Marketplace Rule 4200(a)(15).

We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated revenues to date.

ITEM 16B

Code of Ethics

Code of Ethics

Effective July 15, 2004, our company's board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company's President (being our Principal Executive Officer) and our company's Chief Financial Officer (being our Principal Financial and Accounting Officer and Controller), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:

(1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;

(3) compliance with applicable governmental laws, rules and regulations;

(4) the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and

(5) accountability for adherence to the Code of Business Conduct and Ethics.

Our Code of Business Conduct and Ethics requires, among other things, that all of our company's personnel shall be accorded full access to our president and secretary with respect to any matter which may arise relating to the Code of Business Conduct and Ethics. Further, all of our company's personnel are to be accorded full access to our company's board of directors if any such matter involves an alleged breach of the Code of Business Conduct and Ethics by our President or Secretary.

In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within

- 44 -

our company, consistent with generally accepted accounting principles, and federal, provincial and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate supervisor or to our company's President or Secretary. If the incident involves an alleged breach of the Code of Business Conduct and Ethics by the President or Secretary, the incident must be reported to any member of our board of directors. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics was filed with the Securities and Exchange Commission as Exhibit 14.1 to our annual report filed on July 15, 2004. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Pan American Gold Corporation, Suite 501 – 1540 West 2nd Avenue, Vancouver, British Columbia, Canada V6J 1H2.

ITEM 16C

Principal Accountant Fees and Services

Audit Fees

Our board of directors appointed Manning Elliott LLP, Chartered Accountants, as independent auditors to audit our financial statements for the fiscal year ended December 31, 2006. The aggregate fees billed by Manning Elliott LLP for professional services rendered for the audit of our annual financial statements included in this annual report for the fiscal year ended December 31, 2006 were $21,500 and for the fiscal year ended December 31, 2005 were $15,500.

Audit Related Fees

For the fiscal year ended December 31, 2006 and 2005, the aggregate fees billed for assurance and related services by Manning Elliot LLP relating to our quarterly financial statements which are not reported under the caption "Audit Fees" above, were $12,500 and $10,000, respectively.

Tax Fees

For the fiscal year ended December 31, 2006 and 2005, the aggregate fees billed for tax compliance, tax advice and tax planning by Manning Elliott LLP were $Nil and $Nil, respectively.

All Other Fees

For the fiscal year ended December 31, 2006 and 2005, the aggregate fees billed by Manning Elliott LLP for other non-audit professional services, other than those services listed above, totalled $Nil and $5,000, respectively.

ITEM 16D.

Exemption from the Listing Standards for Audit Committees

Not applicable.

ITEM 16E

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not applicable.

- 45 -

PART III

ITEM 17	Financial Statements
	Refer to Item 18 - Financial Statements.
ITEM 18	Financial Statements

Financial Statements Filed as Part of the annual report:

Audited Financial Statements for the years ended December 31, 2006 and 2005:

Auditors' Report dated April 30, 2007, together with Comments by Auditors for U.S. Readers on Canada - U.S. Reporting Conflict.

Consolidated Balance Sheets for the years ended December 31, 2006 and 2005.

Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Stockholders' Equity for the years ended December 31, 2006 and 2005.

Notes to Consolidated Financial Statements.

- 46 -

CONSOLIDATED FINANCIAL STATEMENTS

	PAN AMERICAN GOLD CORPORATION
	(An Exploration Stage Company)

VANCOUVER, BRITISH COLUMBIA, CANADA

DECEMBER 31, 2006, 2005 AND 2004

1. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2. CONSOLIDATED BALANCE SHEETS

3. CONSOLIDATED STATEMENTS OF OPERATIONS

4. CONSOLIDATED STATEMENTS OF CASH FLOWS

5. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

6. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- 47 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

of Pan American Gold Corporation

We have audited the accompanying consolidated balance sheets of Pan American Gold Corporation as at December 31, 2006 and 2005 and the related consolidated statements of operations, shareholders' equity and cash flows for the years ended December 31, 2006, 2005, and 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Pan American Gold Corporation as at December 31, 2006 and 2005 and the consolidated results of their operations and their cash flows for the years ended December 31, 2006, 2005, and 2004 in conformity with Canadian generally accepted accounting principles.

/s/ Manning Elliott

Chartered Accountants

Vancouver, British Columbia, Canada

April 30, 2007 (except as to Note 11. d) which is dated May 16, 2007)

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA - U.S. REPORTING CONFLICT

In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when there is substantial doubt about a company's ability to continue as a going concern. The accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes the realization of assets and discharge of liabilities in the normal course of business. As discussed in Note 1 to the accompanying financial statements, the Company is in the process of exploring its resource properties and has not yet determined whether the properties contain ore reserves that are economically recoverable, which raises substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our report to the shareholders dated April 30, 2007 is expressed in accordance with Canadian reporting standards which do not permit a reference to such uncertainty in the auditors' report when the uncertainty is adequately disclosed in the financial statements.

/s/ Manning Elliott

Chartered Accountants

Vancouver, British Columbia, Canada

April 30, 2007 (except as to Note 11. d) which is dated May 16, 2007)

Pan American Gold Corporation

(an Exploration Stage Company)

Consolidated Balance Sheets

For the years ended December 31, 2006 and 2005

	2006		2005

ASSETS
Current	$	120,689	$	3,693
Cash		9,721		1,700
Other receivables		130,410		5,393

Investment in limited partnership (Note 3)		-		2,926,910
Resource properties (Note 4)		176,707		318,399
	$	307,117	$	3,250,702

LIABILITIES
Current	$	65,685	$	90,926
Accounts payable and accrued expenses		70,229		-
Loans payable (Note 5)		135,914		90,926

Promissory note (Note 3)		-		3,134,515
		135,914		3,225,441

STOCKHOLDERS’ EQUITY
Share capital (Note 6)		8,509,552		8,075,829
Contributed surplus		223,323		220,820
Deficit		(8,561,672)		(8,271,388)
		171,203		25,261

	$	307,117	$	3,250,702

APPROVED ON BEHALF OF THE BOARD:

/s/ “Steve Bajic”		/s/ “Giovanni Lopez”
Director		Director

Pan American Gold Corporation

(an Exploration Stage Company)

Consolidated Statements of Operations

For the years ended December 31, 2006, 2005 and 2004

	2006		2005		2004
EXPENSES

Consulting	$	135,640	$	210,504	$	359,258
Management fees		69,975		-		-
Legal		68,754		24,613		71,742
Investor relations		59,258		-		-
Accounting		47,530		38,098		29,194
Transfer agent and filing fees		44,688		21,163		26,218
Directors’ fees		36,000		-		-
Rent, office and administration		17,537		5,940		18,048
Travel		11,662		-		13,559
Interest and bank charges		1,781		836		3,402

		(492,825)		(301,154)		(521,421)

OTHER INCOME (EXPENSES)

Gain on disposal of partnership interest (Note 3)		278,860		-		-
Interest income		5,029		93		151
Foreign exchange gain (loss)		(8,519)		3,862		56,504
Resource properties written off		(11,574)		(62,081)		(554,261)
Interest on promissory note		(61,255)		(137,057)		(149,893)
Refund of previously written off bond		-		4,455		-
Partnership income		-		-		204,402
Write off of advances		-		-		(18,054)

Loss before recovery of income taxes		(290,284)		(491,882)		(982,572)

Recovery of income taxes		-		63,804		-

Net loss	$	(290,284)	$	(428,078)	$	(982,572)

Deficit, beginning of year		(8,271,388)		(7,843,310)		(6,860,738)

Deficit, end of year	$	(8,561,672)	$	(8,271,388)	$	(7,843,310)

Basic and diluted loss per share	$	(0.01)	$	(0.01)	$	(0.03)

Weighted Average Common Shares Outstanding		34,916,128		34,706,618		32,775,811

Pan American Gold Corporation

(an Exploration Stage Company)

Consolidated Statements of Cash Flows

For the years ended December 31, 2006, 2005 and 2004

	2006		2005		2004
Operating Activities
Net loss	$	(290,284)	$	(428,078)	$	(982,572)
Add (deduct) items not affecting cash:
Stock-based compensation		132,655		64,359		186,641
Interest on promissory note		61,255		137,057		149,893
Resource properties written off		11,574		62,081		554,261
Gain on disposal of partnership interest		(278,860)		-		-
Recovery of income taxes		-		(63,804)		-
Write off of advances		-		-		18,054
Write off of other asset		-		-		10,574
Partnership income		-		-		(152,835)

		(363,660)		(228,385)		(215,984)

Changes in non-cash working capital balances
Other receivables		(8,021)		32,130		(16,779)
Deposits		-		18,951		(18,951)
Accounts payable		4,557		82,605		(70,088)
		(367,124)		(94,699)		(321,802)

Investing Activities
Proceeds on disposal of partnership interest		10,000		-		-
Increase in resource properties		(174,809)		(52,271)		(533,487)
Decrease (increase) in reclamation bonds		-		36,114		(36,114)
Cash acquired from business combination		-		-		322,191
Increase in advances		-		-		(18,054)
		(164,809)		(16,157)		(285,464)

Financing Activities
Increase in share capital		578,700		-		3,333
Increase (decrease) in loans payable		70,229		(43,500)		(6,908)
Increase in promissory note		-		73,490		-
Increase in share subscriptions		-		-		692,671
		648,929		29,990		689,096

Increase (decrease) in cash		116,996		(80,866)		81,830
Cash, beginning of year		3,693		84,559		2,729

Cash, end of year	$	120,689	$	3,693	$	84,559

Supplemental Disclosure of Cash Flow Information
Cash paid for:
Interest	$	-	$	-	$	-

Income Taxes	$	-	$	-	$	-

Pan American Gold Corporation

(an Exploration Stage Company)

Consolidated Statements of Stockholders’ Equity

December 31, 2006 and 2005

	Common Shares				Deficit Accumulated During the
	Issued Shares	Amount	Contributed Surplus	Share Subscriptions	Exploration Stage	Total

Balance, December 31, 2004	34,052,039	$ 7,446,962	$ 156,461	$ 692,671	$ (7,843,310)	$ 452,784

Future income tax recovery	-	(63,804)	-	-	-	(63,804)
Stock based compensation	-	-	64,359	-	-	64,359
Shares issued	875,077	692,671	-	(692,671)	-	-
Net loss	-	-	-	-	(428,078)	(428,078)

Balance, December 31 2005	34,927,116	8,075,829	220,820	-	(8,271,388)	25,261

Shares returned to treasury	(800,000)	(174,977)	(130,152)	-	-	(305,129)
Shares issued	1,000,000	578,700	-	-	-	578,700
Common shares issued for debt settlement	100,000	30,000	-	-	-	30,000
Stock based compensation	-	-	132,655	-	-	132,655
Net loss	-	-	-	-	(290,284)	(290,284)

Balance December 31, 2006	35,227,116	$ 8,509,552	$ 223,323	$ -	$ (8,561,672)	$ 171,203

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

1. NATURE OF OPERATIONS

Pan American Gold Corporation (the "Company"), incorporated in Ontario, Canada, is a public company listed on the OTC Bulletin Board in the United States. On May 6, 2004 the Company changed its name from Tri-Lateral Venture Corporation to Pan American Gold Corporation.

The Company is in the exploration stage and its principal business activity is the sourcing and exploration of resource properties.

At December 31, 2006 the Company had a working capital deficiency of $5,504 (2005: $85,553) and had an accumulated deficit of $8,561,672 (2005: $8,271,388) which has been financed primarily by the issuance of equity. The Company is in the process of exploring its resource properties and has not yet determined whether the properties contain ore reserves that are economically recoverable. The recoverability of amounts shown for resource properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the development, and upon future profitable production or proceeds from the disposition thereof.

These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Accounting

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Pan American Gold Corporation (Nevada) and Compania Minera P.A.M. de C.V., and are prepared in Canadian dollars in accordance with generally accepted accounting principles in Canada. All inter-company transactions and balances have been eliminated upon consolidation.

Resource Properties

The company accounts for resource properties in accordance with the Canadian Institute of Chartered Accountants Handbook Section 3061, "Property, plant and equipment" ("CICA 3061"), and abstract EIC 126, "Accounting by Mining Enterprises for Exploration Costs" ("EIC 126") of the Emerging Issues Committee. CICA 3061 provides for the capitalization of the acquisition and exploration costs of a mining property where such costs are considered to have the characteristics of property, plant and equipment. EIC 126 provides that a mining enterprise is not precluded from considering exploration costs to have the characteristics of property, plant and equipment when it has not established mineral reserves objectively and, therefore, does not have a basis for preparing a projection of the estimated future net cash flow from the property.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Resource Properties (continued)

However, EIC 126 references certain conditions that should be considered in determining subsequent write-downs, such as changes or abandonment of a work program or poor exploration results, and management reviews such conditions to determine whether a write-down of capitalized costs is required. When the carrying value of a property exceeds its net recoverable amount, provision is made for the impairment in value.

Investment in Limited Partnership

The Company accounted for its limited partnership investment using the cost basis of accounting, whereby the initial investment is recorded at cost and earnings are recorded only to the extent received or receivable. The Company annually reviewed the carrying value of its limited partnership investment for any decline in fair value other than a temporary decline. If such a decline had occurred, the carrying value of the limited partnership investment would have been written down to fair value.

Foreign Currency Translation

The accounts of the Company's non-Canadian subsidiaries, which are considered to be dependent on the Company, and transactions of Canadian operations denominated in foreign currencies are translated to Canadian dollars using the temporal method. Under this method, monetary assets and liabilities are translated at current rates of exchange and other assets and liabilities are translated at historical rates of exchange. Revenues and expenses are translated at average rates of exchange for the year. All exchange gains and losses are recognized currently in earnings.

Loss Per Share

Basic loss per share is calculated using the weighted average number of common shares outstanding and the treasury stock method is used to calculate diluted earnings per share. For the years presented, this calculation proved to be anti-dilutive.

Stock Based Compensation

The Company has a stock option plan which is described in Note 7. The Company follows the recommendations in CICA Handbook Section 3870 "Stock-Based Compensation and Other Stock-Based Payments", which provides standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services. In accordance with these recommendations, stock options are recorded at their fair value on the date of grant as compensation expense. On the exercise of stock options, share capital is credited for consideration received and for fair value amounts previously credited to contributed surplus.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

Income taxes are accounted for under the asset and liability method. Under the asset and liability method, future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using substantively enacted tax rates expected to be recovered or settled. The effect on future tax assets and liabilities of changes in tax rates is recognized in income in the period that substantive enactment occurs.

Flow Through Shares

The Company follows the recommendations of Emerging Issues Committee - 146 ("EIC-146") of the Canadian Institute of Chartered Accountants with respect to flow-through shares. The application of EIC-146 requires the recognition of the foregone tax benefit of exploration expenditures renounced to shareholders. In accordance with these recommendations the carrying value of the shares issued is reduced by the tax effect of the benefits renounced to subscribers on the date the Company renounces the tax credits associated with the exploration expenditures, provided there is reasonable assurance that the expenditures will be made.

Financial Instruments

The Company's financial instruments consist of cash, other receivables, investment in limited partnership, accounts payable and accrued expenses, loans payable and promissory note.

The loans payable are non interest-bearing. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its other financial instruments and that their fair values approximate their carrying values except where separately disclosed.

Use of Estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The more significant areas requiring the use of estimates include asset impairment, stock-based compensation, and future income tax amounts. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.

Asset Retirement Obligations

The Company follows the Canadian Institute of Chartered Accountants' Handbook Section 3110 "Asset Retirement Obligations" in accounting for its resource properties. This standard requires liability recognition for retirement obligations associated with the Company's resource properties. The standard requires the Company to recognize the fair value of the liability for an asset retirement obligation in the period in which it is incurred and record a corresponding increase in the carrying value of the related long-lived asset. Fair value is estimated using the present value of the estimated future cash outflows. The liability is subsequently adjusted for the passage of time, and is recognized as an accretion expense in the statements of operations. The increase in the carrying value of the asset is amortized on the same basis as resource properties. As of December 31, 2006 and 2005, the Company did not have any asset retirement obligations.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

3. INVESTMENT IN LIMITED PARTNERSHIP

The Company had an interest in Doon Investments, an Alberta limited partnership involved in the petroleum and natural gas industry.

To acquire its limited partnership interest, the Company issued a promissory note for $2,926,910, bearing interest at 4.75% per annum to November 30, 2008 and 7% per annum thereafter, repayable on December 29, 2009 and secured entirely by a charge on the Company's interest in the limited partnership. Interest was payable annually on June 30. Under the terms of the promissory note, the Company’s share of partnership cash distributions would be applied first to the payment of accrued interest and then to the payment of the principal amount of the promissory note.

Total interest incurred on the promissory note for the year ended December 31, 2006 was $61,255 (2005: $137,057; 2004: $149,893).

During the year ended December 31, 2006, the Company disposed of the partnership interest and settled the promissory note for net proceeds of $10,000. A gain of $278,860 resulted from this disposition.

4. RESOURCE PROPERTIES

2006

	Lennie		Eskay Creek		Huicicila				Total

Interest in Claims:

Balance, beginning of year	$	-	$	69,274	$		-			$		69,274

Additions		-		-			22,342					22,342
Disposals		-		(69,274)			-					(69,274)

Balance, end of year		-		-			22,342					22,342

Exploration Expenditures:

Balance, beginning of year		13,269		235,856		-					249,125

Current expenditures (Geophysics)		-		-		141,096					141,096
Disposals		-		(235,856)		-					(235,856)

Balance, end of year		13,269		-		141,096					154,365

Balance, end of year	$	13,269	$	-	$	163,438		$			176,707

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

4. RESOURCE PROPERTIES (Continued)

2005

		Lennie		Dorado and Nevada		Eskay Creek		Kinsley and Pinnacle		Huicicila		Total

Interest in Claims:
Balance, beginning of year	$	-	$	11,806	$	69,274	$	-	$	-	$	81,080

Additions		-		36,759		-		-		-		36,759
Written-off		-		(48,565)		-		-		-		(48,565)

Balance, end of year		-		-		69,274		-		-		69,274

Exploration Expenditures:
Balance, beginning of year		12,775		1,313		233,041		-		-		247,129

Current expenditures
(Geophysics)		-		-		3,309		12,203		-		15,512
Less: Expenditures
written-off		-		(1,313)		-		(12,203)		-		(13,516)

Balance, end of year		12,775		-		236,350		-		-		249,125

Balance, end of year	$	12,775	$	-	$	305,624	$	-	$	-	$	318,399

Huicicila Property, Nayarit State, Mexico

On May 15, 2006 the Company acquired a right to earn a 100% interest in mineral properties at Huicicila (Miravalles) in Nayarit State, Mexico. The current claims consist of four properties totalling 994 hectares.

The Company will obtain an option to acquire a 100% interest in the property, subject to a net smelter royalty, by completing the following:

•

Year 1 – Initial payment of US $20,000 (paid) and a second payment of US $40,000 six months subsequent to the initial payment. The due date for this second payment has been extended until May 12, 2007. Additionally, the Company is required to complete fieldwork commitments of US $100,000 (paid) on direct exploration of the property in that year.

•

Year 2 – Payment of US $120,000 on the anniversary date of the option period and field work commitment of US $200,000 is required to be completed.

•

Year 3 – Payment of US $170,000 on the anniversary date of the option period and field work commitment of US $300,000 is required to be completed.

•

Year 4 – Payment of US $750,000 of which, at the discretion of the Company, up to 50% will be payable in shares of the Company.

The agreement also provides that:

•

Up to 25% of the payments noted above may be made in shares, at the rate of one share for each US $0.60 payment.

•

Fieldwork expenditures exceeding required amounts will be credited to the following year.

The optionor of the Huicicila property is a director of the Company.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

4. RESOURCE PROPERTIES (Continued)

Lennie Property, Ontario, Canada

Pursuant to an option agreement dated August 31, 1995, the Company earned a 100% interest in 10 mineral claims located in the Red Lake area of Ontario, subject to a 2% net smelter return royalty upon the commencement of production.

Eskay Creek Property, British Columbia, Canada

Pursuant to an agreement dated January 16, 2004, the Company acquired a 75% interest in the Eskay Creek property, consisting of 75 mineral claims located in the Skeena and Laird mining divisions in British Columbia. Under the terms of the agreement, the Company was required to pay all costs incurred in exploring and developing the property until such time as a positive feasibility study has been received, after which the property would be developed with the vendor under a joint venture agreement. The claims were subject to a 2% net smelter return royalty, payable to the vendor, upon the commencement of production.

During the year ended December 31, 2006, this property was returned to the vendor in exchange for 800,000 common shares of the Company being returned to treasury. Shares returned to treasury were valued at $305,129 and charged to share capital in the amount of $174,977 and contributed surplus in the amount of $130,152. There was no gain or loss recorded in conjunction with this transaction as the value received was equal to the cost of the property at disposition.

Dorado and Nevada Properties, Copiapo, Chile

Pursuant to a letter of intent dated July 22, 2004, the Company had the option to earn up to a 100% interest in 15 exploration and exploitation claims in Copiapo, Chile. In order to earn the interest, the Company was required to pay the optionor U.S.$125,000 by December 4, 2004, of which U.S.$9,000 had been paid by December 31, 2004. The claims were subject to a 2% net smelter return royalty, payable to the optionor, on all mineral production. These options were terminated during 2005.

Kinsley and Pinnacle Properties, Nevada, U.S.A.

Pursuant to letter agreements dated December 8, 2003, the Company acquired a 60% interest in the Kinsley and Pinnacle properties, consisting of 205 claims in the Elko and Nye counties in Nevada. Under the terms of the agreements, the Company was required to make option payments of U.S.$1,050,000 through December 8, 2006 and pay all fees necessary to maintain the claims. The Company would have earned its interest after it had advanced the properties through bankable feasibility. The Company terminated the letter agreements and wrote off its Kinsley and Pinnacle properties in 2004.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

5. LOANS PAYABLE

Loans payable are unsecured, non-interest bearing and have no fixed terms of repayment.

6. SHARE CAPITAL

Preference shares

The Company has unlimited non-voting convertible redeemable non-cumulative 6% authorized preference shares without par value. As of December 31, 2006 and 2005, there were no preference shares issued or outstanding.

Common shares

The Company has an unlimited number of authorized common shares without par value.

Private placements

•

During the year ended December 31, 2006, the Company completed a private placement whereby it issued 1,000,000 units for net proceeds of $578,700. Each unit consisted of one common share and one share purchase warrant exercisable at US$0.80 until April 10, 2007.

•

During the year ended December 31, 2006, the Company settled debt of $30,000 by issuing 100,000 common shares.

•

On April 26, 2005, the Company issued 225,302 flow-though units for proceeds of $187,000 and 229,242 units for proceeds of $190,271. Each flow-through unit consisted of one flow-through common share and one warrant entitling the holder to purchase one common share for $0.83 until October 5, 2005. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share for $0.83 until October 5, 2005.

•

On March 7, 2005, the Company issued 420,533 units for proceeds of $315,400. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share for $0.83 until March 7, 2006.

Returned to Treasury

During the year, 800,000 shares were returned to treasury. Shares returned to treasury were valued at $305,129 and charged to share capital in the amount of $174,977 and contributed surplus in the amount of $130,152.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

6. SHARE CAPITAL (continued)

Warrants:

2006

Exercise Price	Balance December 31, 2005	Issued	(Exercised)	(Expired)	Balance December 31, 2006	Expiry Date

$0.83	420,533	-	-	(420,533)	-	March 7, 2006
US $0.80	-	1,000,000	-	-	1,000,000	April 10, 2007
	420,533	1,000,000	-	(420,533)	1,000,000

2005

Exercise Price	Balance December 31, 2004	Issued	(Exercised)	(Expired)	Balance December 31, 2005	Expiry Date

$0.83		454,544	-	(454,544)	-	October 5, 2005
$0.83	-	420,533	-	-	420,533	March 7, 2006

7. STOCK OPTION PLAN AND STOCK BASED COMPENSATION

Stock Option Plan

On August 16, 2006, the Company adopted a stock option plan applicable to key employees and consultants, under which the total outstanding stock options are limited to 3,000,000 of the outstanding common shares of the Company at any one time. The exercise price for each option is determined by the Board of Directors and must be equal to or greater than the market value of the Company's common shares on the date of grant. The term of an option may not exceed ten years from the grant date.

Under the Company's stock option plan, 1,200,000 options were granted on October 18, 2006, vesting at various dates through July 18, 2007 and expiring October 18, 2011.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

7. STOCK OPTION PLAN AND STOCK BASED COMPENSATION (Continued)

Stock Option Plan (continued)

Changes in the Company's stock options for the years ended December 31, 2006 and 2005 are summarized below:

	2006				2005
			Weighted				Weighted
			Average				Average
	Number		Exercise Price		Number		Exercise Price

Balance, beginning of year		1,133,334	$	0.02		1,133,334	$	0.02

Granted		1,200,000		0.35		-		-
Cancelled		(1,133,334)		(0.02)		-		-

Balance, end of year		1,200,000	$	0.35		1,133,334	$	0.02

At December 31, 2006, there were 300,000 (2005: 1,133,334) exercisable options outstanding.

Stock Based Compensation

The Company uses the Black-Scholes option valuation model to value stock options granted. The Black- Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model requires management to make estimates, which are subjective and may not be representative of actual results. Changes in assumptions can materially affect estimates of fair values. For purposes of the calculation, the following assumptions were used:

	2006	2005	2004
Risk free interest rate	4.00%	-	3.00%
Expected dividend yield	0%	-	0%
Expected stock price volatility	126%	-	0%
Expected life of options	5 years	-	5 years

The grant-date fair value of options granted during the year ended December 31, 2006 was $0.24 (2005: $Nil; 2004 $0.21).

Total stock-based compensation for the year ended December 31, 2006 was $132,655 (2005: $64,359; 2004: $186,641), recorded as consulting fees in the statement of operations.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

8. NON CASH TRANSACTIONS

During the year ended December 31, 2006, the Company issued 100,000 shares to settle accounts payable of $30,000.

During the year ended December 31, 2006, 800,000 shares were returned to treasury in exchange for the Company’s rights in respect of the Eskay Creek property.

9. RELATED PARTY TRANSACTIONS

The Company had the following related party transactions, recorded at their exchange amounts, which is the amount agreed upon by the transacting parties on terms and conditions similar to non-related entities:

a)	During the year ended December 31, 2006 the Company incurred consulting fees of $132,655 (2005: $210,504; 2004: $322,305) and management fees of $40,777 (2005: $Nil; 2004: $Nil) with directors and former directors.

b)	During the year ended December 31, 2006 the Company settled accounts payable to a director of $30,000 by issuing 100,000 common shares.

c)	As described in Note 4, the optionor of the Huicicila property is a director.

d)	Accounts payable and accrued expenses includes $16,653 (2005: $ 85,008; 2004: $993) owing to directors and former directors.

e)	Resource properties include consulting fees paid to directors of $83,822 (2005: $Nil).

10. INCOME TAXES

The following table reconciles the amount of income tax recoverable on application of the statutory Canadian federal and provincial income tax rates:

	2006		2005		2004
Canadian statutory income tax rates	35%		36%		36%

Income tax recovery at statutory rate:	$	100,496	$	175,208	$	349,992
Effect on income taxes of:
Non-deductible stock compensation expense		(45,925)		(23,031)		(66,482)
Valuation allowance		(54,571)		(88,373)		(283,510)

Income tax recovery	$	-	$	63,804	$	-

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

10. INCOME TAXES (Continued)

The following table reflects future income tax assets as at December 31, 2006 and 2005:

Future income tax assets:
Unclaimed non-capital losses	$	371,254	$	334,071
Unclaimed capital losses		86,550		89,050
Tax value of mineral properties in excess of accounting value		276,629		180,835
Valuation allowance		(734,433)		(603,956)

	$	-	$	-

The Company has a capital loss of $500,000 which can be carried forward indefinitely to reduce future capital gains.

The Company has non-capital losses of $1,072,368. The non-capital losses expire annually on December 31 as follows:

2007	$	113,043
2008		222,794
2009		166,928
2014		5,310
2015		429,801
2026		134,492
	$	1,072,368

The Company also has Canadian Exploration Expenses of $779,575, Canadian Development Expenses of $33,385, and Foreign Exploration and Development Expenses of $162,792 available to offset future taxable income. These expenses carry-forward indefinitely and are deductible at various declining-balance rates.

The Company does not have any other future income tax assets or liabilities. The Company has recorded a valuation allowance against its future income tax assets based on the extent to which it is more likely than not that sufficient taxable income will not be realized during the carry-forward periods to utilize all future tax assets.

11. SUBSEQUENT EVENTS

a)	On March 5, 2007, the Company issued 814,140 units for total proceeds of $81,414. Each unit consisted of one common share and one warrant entitling the holder to purchase one common share for $0.20 until March 5, 2009.

b)	On March 5, 2007, the Company revised the option price from $0.35 to $0.20 per share on 1,200,000 stock options expiring October 18, 2011.

c)	On April 10, 2007, 1,000,000 warrants exercisable at US$0.80 expired unexercised.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

11. SUBSEQUENT EVENTS (Continued)

d)	The Company did not meet its payment obligations due in May 2007 under its option agreement for the Huicicila (Miravalles) property in Nayarit State, Mexico and announced on May 16, 2007 that it would not proceed with the project.

12. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

These financial statements have been prepared in accordance with accounting principles generally accepted in Canada, which differ in certain respects with those principles and practices that the Company would have followed had its financial statements been prepared in accordance with accounting principles and practices generally accepted in the United States.

The Company's accounting principles generally accepted in Canada ("Canadian GAAP") differ from accounting principles generally accepted in the United States ("U.S. GAAP") as follows:

a) Resource properties - Under Canadian GAAP, acquisition and exploration costs are capitalized. Under U.S. GAAP, exploration costs are expensed as incurred unless commercial feasibility is established. Under U.S. GAAP, mining properties are reviewed by management for impairment whenever circumstances change which could indicate that the carrying amount of these assets may not be recoverable. Such review has not been completed as there are no capitalized properties for U.S. GAAP purposes.

b)	Recent pronouncements

In September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. SAB No. 108 is effective for periods ending after November 15, 2006. The adoption of this statement did not have a material effect on the Company's reported financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

12. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

c) Reconciliation of Canadian and U.S. GAAP - The impact of the above differences between Canadian and United States generally accepted accounting principles on the statements of operations, the balance sheets and the statements of cash flows are as follows:

Balance Sheets:

		2006		2005

Total assets under Canadian GAAP	$	307,117	$	3,250,702
Adjustments to US GAAP:
Resource properties expensed		(154,365)		(318,399)

Total assets under US GAAP	$	152,752	$	2,932,303

Total liabilities under Canadian and US GAAP	$	135,914	$	3,225,441


Total equity under Canadian GAAP		171,203		25,261
Adjustments to US GAAP:
Resource properties expensed		(154,365)		(318,399)

Total equity under US GAAP		16,838		(293,138)

Total liabilities and equity under US GAAP	$	152,752	$	2,932,303

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

12. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

Statements of Operations:

	2006		2005		2004

Total loss under Canadian GAAP	$	(290,284)	$	(428,078)	$	(982,572)
Adjustments to US GAAP:
Resource properties written-off		11,574		62,081		554,261
Resource properties expensed		(152,670)		(52,271)		(869,696)

Net loss under US GAAP	$	(431,380)	$	(418,268)	$	(1,298,007)

Net loss per share under U.S. GAAP	$	(0.01)	$	(0.01)	$	(0.04)

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

12. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

Statements of Cash Flows:

	2006		2005		2004

Cash used in operating activities as reported under Canadian GAAP	$	(367,124)	$	(94,699)	$	(321,802)
Adjustments to US GAAP:
Resource Properties Written-off		11,574		62,081		554,261
Resource Properties Expensed		(152,670)		(52,271)		(869,696)

Cash used in operating activities as reported under US GAAP	$	(508,220)	$	(84,889)	$	(637,237)

Cash used in investing activities as reported under Canadian GAAP	$	(164,809)	$	(16,157)	$	(285,464)
Adjustments to US GAAP:
Resource Properties Written-off		(11,574)		(62,081)		(554,261)
Resource Properties Expensed		152,670		52,271		869,696

Cash used in investing activities as reported under US GAAP	$	(23,713)	$	(25,967)	$	29,971

Cash used in financing activities as reported under Canadian GAAP	$	648,929	$	29,990	$	689,096
Adjustments to US GAAP		-		-		-

Cash used in financing activities as reported under US GAAP	$	648,929	$	29,900	$	689,096

Pan American Gold Corporation

(an Exploration Stage Company)

Notes to Consolidated Financial Statements

For the years ended December 31, 2006, 2005 and 2004

12. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

d) Earnings per share reconciliation – Under U.S. GAAP the Company must provide a reconciliation of the numerators and the denominators of basic and diluted earnings per share:

	2006		2005		2004

Numerator
Net loss under U.S. GAAP	$	(431,380)	$	(418,268)	$	(1,298,007)

Denominator
Weighted average number of common shares
outstanding		34,916,128		34,706,618		32,775,811

Basic and diluted net loss per share	$	(0.01)	$	(0.01)	$	(0.04)

- 68 -

ITEM 19

Exhibits

Exhibits Required by Form 20-F

Exhibit Number / Description

(1)

Articles of Incorporation and By-laws:

1.1 Articles of Incorporation (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

1.2 Supplementary Letters Patent dated October 16, 1970 (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

1.3 Articles of Revival dated September 25, 1987 (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

1.4 Articles of Amendment dated March 26, 1991 (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

1.5 Articles of Revival dated February 3, 1995 (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

1.6 Articles of Amendment dated June 19, 1995 (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

1.7 Articles of Amendment dated October 2, 1998 (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

1.8 Articles of Amendment dated May 6, 2004 (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on July 15, 2004).

1.9 By-laws (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on November 27, 2002).

(4)

Material Contracts

4.1 Form of Subscription Agreement entered into with Patrick Brauckmann and Abeir Haddad. (incorporated by reference from our Registration Statement on Form 20-F filed on July 15, 2005).

4.2 Option Agreement dated February 1, 2005 with Minera Cerro El Diablo Inc. (incorporated by reference from our Registration Statement on Form 20-F filed on July 15, 2005).

4.3 Membership Interest Liquidation Agreement dated December 31, 2004 with Cactus Precious Metals LLC. (incorporated by reference from our Registration Statement on Form 20-F filed on July 15, 2005).

4.4 Subscription Agreement dated March 7, 2005 entered into with Hugh Steine. (incorporated by reference from our Registration Statement on Form 20-F filed on July 15, 2005).

- 69 -

4.5 Settlement Agreement dated January 20, 2006 with Richard Bachman (incorporated by reference from our Current Report on Form 6-K filed on January 26, 2006).

4.6 Termination Agreement dated February 6, 2006 with Matthew Mason and Pan American Nevada (incorporated by reference from our Registration Statement on Form 20-F filed on June 30, 2006).

4.7 Letter Agreement dated March 15, 2006 with Aztec Copper Inc. (incorporated by reference from our Current Report on Form 6-K filed on April 28, 2006).

4.8 Subscription Agreement dated March 22, 2006 with Epsom Investment Services N.V. (incorporated by reference from our Registration Report on Form 20-F filed on June 30, 2006)

4.9 Letter Agreement dated May 10, 2006 between Pan American Gold Corporation and Ramon Farias (incorporated by reference from our Current Report on Form 6-K filed on May 17, 2006).

4.10 Agreement of Purchase and Sale dated June 9, 2006 with 2006 Hydro Blue Ltd., as trustee of the Blue Chad Family Trust (incorporated by reference from our Annual Report on Form 20-F filed on July 10, 2007).

4.11 Debt Settlement and Subscription Agreement dated October 5, 2006 with Ramon Farias (incorporated by reference from our Annual Report on Form 20-F filed on July 10, 2007).

(11)

Code of Ethics

11.1 Code of Ethics (incorporated by reference from our Registration Statement on Form 20-F, as amended, filed on July 15, 2004).

(12)	302 Certification
12.1*	Section 302 Certification under Sarbanes-Oxley Act of 2002 for Steve Bajic.
12.2*	Section 302 Certification under Sarbanes-Oxley Act of 2002 for Martin Bajic.
12.3*	Section 906 Certification under Sarbanes-Oxley Act of 2002 for Steve Bajic.
12.4*	Section 906 Certification under Sarbanes-Oxley Act of 2002 for Martin Bajic.
(99)	Additional Exhibits
99.1*	Consent of Manning Elliot, Chartered Accountants

*Filed herewith

- 70 -

SIGNATURES

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

PAN AMERICAN GOLD CORPORATION

Per:	/s/ Steve Bajic
	Steve Bajic
	President and Chief Executive Officer

Dated : September 7, 2007

CW1384229.4