Pan American Receives Preliminary Drill Results from Huicicila Property.

VANCOUVER, British Columbia -- Pan American Gold Corporation (OTCBB: PNAMF) ("Pan American") has received results from 604m of diamond drilling in five holes drilled on the Huicicila (Miravalles) property in Nayarit State, Mexico during 2006. The work was initiated prior to Pan American's involvement by Grupo Anfaza S.A. de C.V. ("Anfaza"), the property owner, and financed through a Fideicomiso Mexican government Credit Loan. Servicio GeolE[thorn]gico Mexicano (SGM), a Mexican government agency (formerly Consejo de Recursos Minerales), supervised the project and provided exploration support services.

Anfaza planned the drilling program to verify the existence of historic ore reserves developed on the Huichapa vein by American Smelting And Refining Company ("ASARCO") in the 1920's and 30's. Anfaza drilled three holes to explore for ore shoots developed by ASARCO and to test for new mineralization encountered this year during road building on the adjoining La Republica vein zone. Prior to Anfaza's work, the property had never been drilled.

From 1926 to 1936, ASARCO actively explored the property and estimated historic reserves of 45,274 tons of 31.2 gm/ton gold, 401 gm/ton of 401 gm/ton silver, and 3.4% lead in the Miravalles mine. Thomas Clendenin, a Harvard geologist working for ASARCO in 1926 while the company advanced the Huichapa #3 and #4 adits, made the ore reserve estimate (Jenny, 1926).

There are no known production records from ASARCO's tenure in the district and it is not clear whether this mineralization was extracted or remains in place. ASARCO reportedly abandoned its efforts because of repeated bandit assaults and assassinations. However, the company maintained the claims until 1968 when a change in the Mexican mining law forced all foreign companies to abandon their claims or reorganize under new legal requirements.

The Huichapa vein consists of massive chalcopyrite-pyrite-arsenopyrite-pyrrhotite mineralization in a centimeter to 3 meter wide bull quartz vein. Where the vein changes strike, it is broken and brecciated. Massive galena and sphalerite bearing "very strong gold values" (> 1 oz Au/ton) occupy the breccia matrix and form the two ore shoots encountered in the Miravalles exploration adits (Clendenin, 1926). The vein follows a North 60 West trending structure that is up to 50 meters wide and together with a dark gray, aphanitic trachyte porphyry dike cuts fractured, sheared, and hornfelthized andesite and diorite wall rocks.

Prospect pits and minor workings mark the Huichapa vein zone and its accompanying aphanite porphyry dike for approximately 1500 meters on surface. Only about 600 meters have been explored of its known strike. Additional Huichapa vein zone targets include the Coronillas crosscut area and the Huichapa West Adit located 400 meters southeast and 200 meters northwest of the Miravalles mine respectively. Peripheral to the Huichapa vein zone are parallel veins that show similar occurrences of quartz-sulfide vein mineralization and include the San Francisco, Republica, La Constancia, Trinidad, and Dos Estrellas prospects.

Drill holes advanced by Anfaza during 2006 are as follows:

[TABLE OMITTED]

Anfaza Huicicila Project Preliminary Drill Results (S.G.M.)

[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]

DDH-3 shows the strongest results of approximately 2.1 meters of 27.1 gm Au/m.t. That the Huichapa vein mineralization exists where old reserve plans indicate grade, is very encouraging and adds to the hypothesis that the historic reserves remain in place. However, it is too early to say that the old ASARCO historic reserves are in tact or that other potential exists downdip and along strike from the Huichapa ore shoots.

DDH-1 was lost at 73.95 meters in underground openings that coincide with the approximate location of the Huichapa shaft. The Manchaca family of Tepic sank the shaft approximately 140-150 years ago to mine vein near surface. From 53.58 to 63.2 meters, DDH-1 encountered approximately 5.5 meters of 2.4 gm Au/m.t. and from 63.2 to 69.95 meters 3.9 meters of 9.2 gm Au/m.t. Both intercepts adjoin what are believed to be old workings. This suggests that mineralization remains around previous efforts at underground mining.

Interpretation of preliminary drill hole data is complicated by several factors.

1. DDH-3 was drilled vertically to intercept a 70 dipping vein and may have followed the vein for a considerable distance distorting the true intercept and grade of mineralization.

2. The hole bottomed in gold mineralized quartz vein and the true thickness of the vein is not known.

3. Core recovery for both DDH-3 and DDH-1 is variable and generally poor, ranging between 27.5-100.0% and averaging 65% through strongest vein intersections.

4. Pan American cannot confirm or criticize quality control measures used on the project at this time during core handling, sampling, and shipping for any holes drilled. Nor is Pan American familiar with the "Centro Experimental Chihuahua Laboratory of Servicio GeolE[thorn]gico Mexicano " where the core samples were analyzed.

5. A final report on the 2006 drilling activities from Servicio GeolE[thorn]gico Mexicano is not yet complete.

The Huichapa vein, its historic reserve, plus extensions are the main focus of Pan American's 2007 exploration efforts and are the subject of an exploration plan currently being laid out which includes the redrilling of the DDH -- 3 intercept at a greater core angle to the vein and contracting the necessary drilling technology to ensure adequate core recovery through the vein.

Pan American Gold Corporation is a Canadian-based mineral exploration company quoted 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.

Eugene K. Schmidt acts as the "qualified person" for Pan American Gold Corporation as that term is defined in National Instrument 43-101.

Eugene K. Schmidt,
Vice President of Exploration
Pan American Gold Corp.

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) historic reserves may remain in place due to the existence of Huichapa vein mineralization where old reserve plans indicate grade; (ii) mineralization may remain around previous efforts at underground mining; (iii) the redrilling of the DDH - 3 intercept and the contracting of necessary drilling technology will be included in Pan American's exploration plan for 2007; and (iv) 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.