Pan American Gold Corporation Signs Definitive Option.

VANCOUVER, British Columbia -- Pan American Gold Corporation (OTCBB: PNAMF) ("Pan American") has executed a definitive option agreement for the Huicicila (Miravalles) property in Nayarit State, Mexico (the "Property"), through its wholly owned Mexican subsidiary Compania Minera P.A.M., S.A. de C.V.

Pan American has advanced the initial payment of US $20,000 to the property owner and has the following commitments in order to acquire a 100% interest in the Property, subject to a 3% NSR:

Co Year 1 - Payment of US $40,000 due in six months. Pan American is required to complete fieldwork commitments of US $100,000 on direct exploration of the Property in that year. A portion of this amount has already been realized in the Spring-Summer 2006 work program that included a 1,200m drill program.

Co 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.

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

Co Year 4 - Payment of US $750,000 of which, at the discretion of Pan American, up to 50% may be payable in shares of the company.

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 option period while the option is in effect.

The Huicicila (Miravalles) property is located 12km southeast of Tepic City and lies within the Compostela Mining District, which has several trends of gold deposits along the Pacific Coast. High-grade gold and silver veins are present on the Property with proven reserves estimated by the American Smelting and Refining Company totaling 50,000 tonnes of ore: 1 oz/t of Au and 12 oz/t Ag. Excellent potential exists to increase the tonnage with further exploration.

Pan American announces the appointment of Eugene Schmidt as director and Vice President of Exploration. Mr. Schmidt will oversee all facets of Pan American's exploration programs, including the Huicicila project, and lead the evaluation team in examining further property acquisitions. Mr. Schmidt has held senior exploration and management positions with Southern Peru Copper Company, Cia Minera El Indio, Hecla Mining Company, Freeport Exploration and The Anaconda Company. He has also consulted for major and junior companies alike including Phelps Dodge, Barrick Gold, Battle Mountain Gold, and Triton Mining. Mr. Schmidt is a licensed Geologic Engineer in Washington State and holds a Geology degree from the University of Arizona, a Masters degree in Geologic Engineering from the University of Arizona, and a MBA in International Business from Whitworth/Gonzaga. His 30 years experience in the mining industry is from the bench to the boardroom and the field to the street in exploration, open pit and underground engineering, and operations.

Mr. Schmidt's accomplishments include the creation and implementation of country-wide exploration programs in the U.S., Chile, Peru, Mexico, Argentina, Bolivia, and Ecuador that involved him in discoveries at Casa Grande, Arizona, Manantial Espejo, Argentina, Nukay, Guerrero, as well as the expansion of reserves at Toquepala and Cuajone, Peru and El Indio, Chile. His broad experience includes production supervision and operations management of a metallurgical plant and operating mines as well as large dollar exploration, development and construction projects.

Pan American has also appointed Martin Bajic as its new Chief Financial Officer. Mr. Bajic obtained his Bachelor of Arts from the University of British Columbia and holds a Chartered Accountant designation with the Institute of Chartered Accountants of British Columbia. He is currently employed with Cinnamon Jang Willoughby of Burnaby, British Columbia as a supervisor and has experience in the audit of public company financial statements, public reporting disclosure requirements and U.S. public reporting regulatory issues.

Alan Hitchborn has resigned as a director of Pan American due to other work commitments. Pan American thanks him for his time and wishes him well in his future endeavors.

Pan American announces the appointment of Giovanni Lopez as director. Mr. Lopez currently holds an English degree from the University of British Columbia. He 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.

Lastly, Pan American entered into a Debt Settlement and Subscription Agreement dated October 5, 2006 with Ramon Farias, a director of the company. Pursuant to the terms of the agreement, Pan American has agreed to issue 100,000 common shares to Mr. Farias at a deemed issue price of US $0.30 per share in consideration for Mr. Farias' past services as a director of the company.

Pan American Gold Corporation is a Canadian-based mineral exploration company listed on the OTC Bulletin Board (Symbol: PNAMF). Pan American is focused on enhancing shareholder value by identifying, exploring, and developing world-class resource projects with a current focus on properties in Mexico.

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) excellent potential exists to increase the tonnage with further exploration; and (ii) Pan American is able to develop world-class resource projects.

Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (i) the inherent uncertainties and speculative nature associated with mineral exploration; (ii) changes in reserve estimates, if any; (iii) 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; (iv) changes in economic conditions, adverse exchange rates and financial markets; (v) the risk that Pan American does not execute its business plan; (vi) the inability to retain key employees; (vii) changes in the prices of precious metals or other minerals Pan American acquires or produces; (viii) Pan American's inability to finance its operations or growth; and (ix) 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.