M3 Engineering and Technology Corporation Contracted for Preliminary Economic Assessment of Cieneguita Silver and Gold Project

By Pan American Goldfields Ltd, PRNE
Wednesday, July 13, 2011

BROOMFIELD, Colorado, July 14, 2011 -


Further to its press release of June 29th, 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 US$950 oz/Ag and US$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

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
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


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