M3 Engineering and Technology Corporation contracted for Preliminary Economic Assessment of Cieneguita Silver and Gold project

BROOMFIELD, CO, July 14, 2011 /PRNewswire/ - Further to its press release of June 29^th, 2011, Pan American Goldfields Ltd. (OTCBB: MXOM) ("the company") has entered into an agreement with M3 Engineering and Technology Corporation for the execution and completion of a NI 43-101 compliant Preliminary Economic Assessment (PEA) for its 80% owned Cieneguita Silver and Gold Project in Chihuahua state, Mexico. The project, which is approximately 20 km northwest of Goldcorp's El Sauzal Mine, contains an 43-101 compliant in-situ drill indicated and inferred resource within an optimized pit shell of 20,087,000 tonnes with an average grade of 0.74 grams per ton gold and 51.8 grams per ton silver at a cutoff grade of 0.8 grams per ton gold equivalent, based on $950 oz/Ag and $14.50 oz/Ag. A pilot plant is currently operating to process mineralized material from pit 3 in partnership with Minera Rio Tinto SA, a Mexican private entity.

The PEA is expected to take approximately 7 months to complete and the scope of the work is to consist of Process Plant design, Site Facilities, Power Supply and Distribution, Project Execution Plan, Capital and Operating Cost Estimates, an Economic Model, and preparation of the overall Report.

The Process Plant design will be on a preliminary basis with enough detail to use as a reference for a planned feasibility study, and will include flow sheet diagrams, general arrangement drawings, specifications and data sheets, and capital and operating cost estimates for the process plant. The flow sheet and general arrangement will be used to define process and layout and will enable the generation of material take offs and size equipment to be used in the capital cost estimate. Areas of focus will include primary crushing and ore storage, grinding, flotation and regrind, thickening and filtering, tailing disposal and reclaimed water piping and pumping, along with fresh water piping and pumping.

M3 will also be responsible for the design and cost estimates of ancillary mine facilities such as offices, laboratory and access roads and will be responsible for the design of single line diagrams used in the generation by M3 of cost estimates for new power lines and substations for the power supply.

A project execution plan to be included in the PEA is to be developed jointly between Pan American Goldfields and M3. Capital cost estimates will be based in part on equipment budget quotations from approved vendors and on M3's data-base from recent projects while construction costs will use data from the same data-base.

In reaction to the agreement, Pan American's Chairman Neil Maedel commented: I am thrilled to have M3 managing this critical stage of Cieneguita's development. I can think of no better qualified engineering firm for this project. M3 has managed the design and development of more than half of the new mines in Mexico over the past 20 years. We intend to develop this project as expeditiously as possible as we continue to build value for our shareholders. Adding M3 to our development team is a major step towards accomplishing this.

Other consulting companies contributing to the preparation of the PEA will be Independent Mining Consultants who will be preparing a new resource estimate, a mine plan and schedule and mine related capital and operating costs. Resource Development Inc. will be performing metallurgical testing to define the processing flow sheet and estimation of appropriate metal recoveries. Global Resource Engineering will be performing geotechnical related investigations related to tailings and mine waste storage and other site facilities.

About Forward-Looking Statements

Except for statements of historical fact, the matters discussed in this press release are forward looking and reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond our control and may cause actual results to differ materially from stated expectations. For example, there can be no assurance that we will complete the definitive agreements with MRT and MM on a timely basis, or at all. Actual results may also differ substantially from those described in or contemplated by this press release due to risks and uncertainties that exist in our operations and business environment, including, without limitation, our ability to enter into definitive agreements with MRT and MM, our ability to successfully complete the feasibility study for the Cieneguita property, and our ability to raise funds to support our future operations, and other risks described from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof.

SOURCE: Pan American Goldfields Ltd., a fully reporting company in United States and Canada

http://www.panamgoldfields.com

SOURCE Pan American Goldfields Ltd.