Pan American Gold Corporation Acquires New Mineral Property in Mexico's Nayarit State.

VANCOUVER, British Columbia -- Pan American Gold Corporation (OTCBB:PNAMF) ("Pan American") is pleased to announce that it has signed a binding letter of intent (the "Agreement") for the right to earn a 100% interest (the "Option") in mineral properties at Huicicila (Miravalles) in Nayarit State, Mexico (the "Property"). The current claims consist of four properties of 470, 349, 144 and 30 hectares totaling 993.883 hectares.

High grade gold and silver quartz veins are present on the property. Current and existing reserves at Huicicila total 50,000 tonnes of ore: 1 oz of Au, 12 oz Ag. The estimated probable resources are believed to be above 500,000 oz. Excellent potential exists to increase the tonnage with further exploration. Pan American is currently in negotiations with two senior geologists to join the board and aggressively pursue our exploration opportunities. Pan American intends to release a 43-101 report on the Property in the near future.

The acquisition is subject to a 3% net smelter return royalty from production on the Property (payable upon the commencement of commercial production). The area of influence encompasses all new claims staked within 20 kilometers of Punto de Partida, the starting point of the claims.

Upon the closing of the Agreement, Pan American will be entitled to exercise the Option and thereby acquire a 100% interest in the Property, subject to the NSR, by completing the following:

--Year 1 - Initial payment of US $20,000 at the beginning of the Option Period, and a second payment of US $40,000 six months later. Pan American is required to complete fieldwork commitments of US $100,000 on direct exploration of the Property in that year.

--Year 2 - Payment of US $120,000 will be made on the anniversary date of the Option Period and field work commitments of US $200,000 is required to be completed.

--Year 3 - Payment of US $170,000 and field work commitments of US $300,000 is required to be completed.

--Year 4 - Payment of US $750,000 to Ramon Farias, of which, at the discretion of Pan American, up to 50% will be payable in shares of the public company that holds the Option.

Further terms of the deal include:

--Up to 25% of payments noted above may be made in shares at the rate of 1 share for each US $0.60.

--All of the annual cash payments will be in US dollars, plus a 15% IVA (not including tax payments).

--Work commitments exceeding required amounts will be credited to the following year.

--The Optionor will assist Pan American in staffing and organizational needs as exploration work begins on the Property.

Pursuant to the terms of the Agreement, Pan American is obligated to pay the taxes and maintain the legal status of the claims comprising the Property in accordance with Mexican mining law during the Pre-Agreement Activity Period and during the Option Period while the Option is in effect.

Notice Regarding Forward-Looking Statements 

This news release contains "forward-looking statements", as that term is defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among others, the expectation and/or claim, as applicable, that: (i) current and existing reserves at Huicicila may total 50,000 tones of ore: 1 oz of Au, 12 oz Ag; (ii) the estimated probable resources are believed to be above 500,000 oz; (iii) the two senior executives will agree to join the board of directors of Pan American and that, upon appointment, such executives will aggressively pursue Pan American's exploration opportunities; and (iv) Pan American may release a 43-101 report on the Property in the near future.

Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (i) the failure of the Agreement to close for any reason; (ii) the inherent uncertainties and speculative nature associated with mineral exploration; (iii) changes in reserve estimates, if any; (iv) any number of events or causes which delay or cease exploration and development of Pan American's property interests such as environmental liabilities, weather, mechanical failures, safety concerns, labour problems and financing problems; (v) changes in economic conditions, adverse exchange rates and financial markets; (vi) the risk that Pan American does not execute its business plan; (vii) the inability to retain key employees; (viii) changes in the prices of precious metals or other minerals Pan American acquires or produces; (ix) Pan American's inability to finance its operations or growth; and (x) the inability to obtain all necessary government, environmental and regulatory approvals. These forward-looking statements are made as of the date of this news release and Pan American assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although Pan American believes that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance those beliefs, plans, expectations, or intentions will prove to be accurate. Investors should consider all of the information set forth herein and should also refer to the risk factors disclosed in Pan American's periodic reports filed from time-to-time with the Securities and Exchange Commission and available at www.sec.gov.