UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-Q





(Mark
One)


[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE


ACT
OF 1934





For
the Quarterly Period Ended October 31, 2008





OR





[
] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE


ACT
OF 1934





For the
transition period from _____________ to _____________





Commission
file number 000-49996





AMERICAN GOLDFIELDS INC.


(Exact
name of registrant as specified in its charter)





5836
South Pecos Road


Las Vegas, Nevada,
USA  89120


(Address
of principal executive offices) (Zip Code)





(800)
942-2201


(Registrant's
telephone number, including area code)





200-4170 Still Creek Drive,
Burnaby B.C. V5C 6C6, Canada


(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. [X] Yes [  ] No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer  [  ]
            Accelerated
      filer  [  ]Non-accelerated
      filer [  ] (Do not check if a smaller reporting
      company)
            Smaller
      reporting company  [X]





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange
Act).  Yes  [   ]  No
[X]





Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 21,292,878 shares of common stock,
$0.001 par value, issued and outstanding as of December 1, 2008.











1








TABLE OF
CONTENTS





PagePART
      I - Financial Information
            3Item
      1. Financial Statements
            3Balance
      Sheets October 31, 2008, and January 31, 2008 (audited)
            3Statements
      of Loss for the three and nine-month periods ended October 31, 2008 and
      2007,and
      for the period from inception on December 21, 2001 to October 31,
      2008.
            4Statements
      of Cash Flows for the three and nine-month periods ended October 31, 2008
      and 2007,and
      for the period from inception on December 21, 2001 to October 31,
      2008.
            5Notes to the Financial Statements
            6Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
            9Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk
            11Item
      4. Controls and Procedures
            11PART
      II – Other Information
            11Item
      1.  Legal Proceedings
            11Item
      1A. Risk Factors
            11Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
            11Item
      3. Defaults Upon Senior Securities
            11Item
      4. Submission of Matters to a Vote of Security Holders
            11Item
      5. Other Information
            12Item
      6. Exhibits
            12





2


PART I.
FINANCIAL INFORMATION


Item
1. Financial Statements








American
Goldfields Inc.


(An
Exploration Stage Company)


Balance
Sheets


(Unaudited)





October
      31
            
            
            January
      312008
            
            
            2008AssetsCURRENT
      ASSETSCash
      and cash equivalents
            
            $
            96,077
            
            
            $
            29,771Prepaid
      expenses
            
            
            1,936
            
            
            
            22,788Total
      current assets
            
            
            98,013
            
            
            
            52,559Reclamation
      deposits
            
            
            41,800
            
            
            
            54,968Total
      Assets
            
            $
            139,813
            
            
            $
            107,527LiabilitiesCURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
            
            $
            14,130
            
            
            $
            224,015Total
      current liabilities
            
            
            14,130
            
            
            
            224,015Stockholders’
      EquitySHARE
      CAPITALAuthorized600,000,000
      common shares with a par value of $0.001 per share
              100,000,000
      preferred shares with a par value of $0.001 per shareIssued21,292,878
      (January 31, 2008 – 20,980,378) common Shares issued
              and
      outstanding at October 31, 2008
            
            
            21,293
            
            
            
            20,980Additional
      paid-in capital
            
            
            3,137,967
            
            
            
            2,919,530Warrants
            
            
            829,604
            
            
            
            829,604DEFICIT
      ACCUMULATED DURING THE EXPLORATION STAGE
            
            
            (3,863,181
            )
            
            
            (3,886,602
            )Total
      stockholders' equity
            
            
            125,683
            
            
            
            (116,488
            )Total
      Liabilities and Stockholders' Equity
            
            $
            139,813
            
            
            $
            107,527





The
accompanying notes are an integral part of these financial
statements.





3


American Goldfields Inc.


(An
Exploration Stage Company)


Statements
of Operations


(Unaudited)





Three-Months
      Ended
            
            
            Nine-Months
      Ended
            
            
            InceptionOctober
      31
            
            
            October
      31
            
            
            December
      21, 20012008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            to
      October 31,2008ExpensesMineral
      claim payments and exploration expenditures
            
            $
            26,595
            
            
            $
            96,258
            
            
            $
            (69,216
            )
            
            $
            509,647
            
            
            $
            2,500,119Office
      and sundry
            
            
            2,819
            
            
            
            9,228
            
            
            
            20,860
            
            
            
            26,158
            
            
            
            520,278Rent
            
            
            2,211
            
            
            
            1,239
            
            
            
            5,730
            
            
            
            3,545
            
            
            
            25,751Professional
      fees
            
            
            2,999
            
            
            
            2,574
            
            
            
            10,632
            
            
            
            16,378
            
            
            
            188,308Transfer
      agent fees
            
            
            -
            
            
            
            75
            
            
            
            50
            
            
            
            170
            
            
            
            6,340Amortization
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            500
            
            
            
            18,000Directors’
      fees
            
            
            2,944
            
            
            
            2,877
            
            
            
            8,835
            
            
            
            8,299
            
            
            
            31,913Interest
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,070Consulting
      fees
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            583,027Total
      expenses
            
            $
            37,568
            
            
            $
            112,251
            
            
            $
            (23,109
            )
            
            $
            564,697
            
            
            $
            3,874,806Interest
      income
            
            
            156
            
            
            
            -
            
            
            
            312
            
            
            
            -
            
            
            
            11,625Net
      income (loss) for the period
            
            $
            (37,412
            )
            
            $
            (112,251
            )
            
            $
            23,421
            
            
            $
            (564,697
            )
            
            $
            (3,863,181
            )Basic
      and diluted loss per share of common stock
            
            $
            (0.00
            )
            
            $
            (0.01
            )
            
            $
            (0.00
            )
            
            $
            (0.03
            )Weighted
      average shares outstanding – basic and diluted
            
            
            21,292,878
            
            
            
            20,667,878
            
            
            
            21,262,084
            
            
            
            20,482,713





The
accompanying notes are an integral part of these financial
statements.





4


American Goldfields
Inc.


(An
Exploration Stage Company)


Statements
of Cash Flows


(Unaudited)





Three-Months
      Ended
            
            
            Nine-Months
      Ended
            
            
            InceptionOctober
      31
            
            
            October
      31
            
            
            December
      21, 20012008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            to
      October 31, 2008Cash
      provided by (used in):Cash
      flows used in operating activitiesNet
      loss for the period
            
            $
            (37,412
            )
            
            $
            (112,251
            )
            
            $
            23,421
            
            
            $
            (564,697
            )
            
            $
            (3,863,181
            )Adjustments
      to reconcile net loss to netCash
      flows used in operating activities:Stock-based
      compensation
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            187,800
            
            
            
            1,729,000Amortization
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            500
            
            
            
            18,000Changes
      in assets and liabilitiesPrepaid
      expenses
            
            
            405
            
            
            
            (19,717
            )
            
            
            20,852
            
            
            
            (20,294
            )
            
            
            (1,936
            )Accounts
      payable and accrued liabilities
            
            
            4,695
            
            
            
            36,022
            
            
            
            (209,885
            )
            
            
            (105,260
            )
            
            
            18,673Net
      cash used in operating activities
            
            
            (32,312
            )
            
            
            (95,946
            )
            
            
            (165,612
            )
            
            
            (501,951
            )
            
            
            (2,099,444
            )Cash
      flows from (used in)financing activitiesProceeds
      from loan
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            60,000Repayment
      of loan principal
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (60,000
            )Cancellation
      of common stock
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (60,000
            )Proceeds
      from the issue of common stock
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,304,571Proceeds
      from the exercise of stock options
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            199,500
            
            
            
            774,000Proceeds
      from the exercise of warrants
            
            
            -
            
            
            
            -
            
            
            
            218,750
            
            
            
            -
            
            
            
            218,750Net
      cash from financing activities
            
            
            -
            
            
            
            -
            
            
            
            218,750
            
            
            
            199,500
            
            
            
            2,237,321Cash
      flows used in investing activitiesReclamation
      deposit
            
            
            -
            
            
            
            (11,127
            )
            
            
            13,168
            
            
            
            (21,227
            )
            
            
            (41,800
            )Net
      cash used in investing activities
            
            
            -
            
            
            
            (11,127
            )
            
            
            13,168
            
            
            
            (21,227
            )
            
            
            (41,800
            )Increase
      (decrease) in cash
            
            
            (32,312
            )
            
            
            (107,073
            )
            
            
            66,306
            
            
            
            (323,678
            )
            
            
            96,077Cash,
      beginning of period
            
            
            128,389
            
            
            
            168,907
            
            
            
            29,771
            
            
            
            385,512
            
            
            
            -Cash,
      end of period
            
            $
            96,077
            
            
            $
            61,834
            
            
            $
            96,077
            
            
            $
            61,834
            
            
            $
            96,077SCHEDULE
      OF NON-CASH ACTIVITIESSettlement
      of accounts payable by contribution from a shareholder
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            4,543Web-site
      development costs related to non-Employee stock-based
      compensation
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            18,000





The
accompanying notes are an integral part of these financial
statements.





5


American
Goldfields Inc.


(An
Exploration Stage Company)


Notes to
the Financial Statements


(Unaudited)





October
31, 2008 and 2007





1.
Basis of Presentation and Going Concern Considerations





The
unaudited financial information furnished herein reflects all adjustments, which
in the opinion of management are necessary to fairly state the financial
position of American Goldfields Inc. (the “Company”) and the results of its
operations for the periods presented.  This report on Form 10-Q should
be read in conjunction with the Company’s financial statements and notes thereto
included in the Company’s Form 10-K for the fiscal year ended January 31,
2008.  The Company assumes that the users of the interim financial
information herein have read or have access to the audited financial statements
for the preceding fiscal year and that the adequacy of additional disclosure
needed for a fair presentation may be determined in that
context.  Accordingly, footnote disclosure, which would substantially
duplicate the disclosure contained in the Company’s Form 10-K for the fiscal
year ended January 31, 2008 has been omitted.  The results of
operations for the three or nine-month periods ended October 31, 2008 are not
necessary indicative of results for the entire year ending January 31,
2009.





Organization





The
Company was incorporated in the State of Nevada, U.S.A., on December 21,
2001.  On February 24, 2004, the Company and a majority of the
Company’s stockholders authorized the changing of the Company’s name to American
Goldfields Inc.  The name change became effective March 31,
2004.




Exploration Stage
Activities





The
Company has been in the exploration stage since its formation and has not yet
realized any revenues from its planned operations.  It is primarily
engaged in the acquisition and exploration of mining properties.  Upon
location of a commercial minable reserve, the Company expects to actively
prepare the site for its extraction and enter a development stage.




Going
Concern




The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern.




As shown
in the accompanying consolidated financial statements, the Company has incurred
a net loss of $3,863,181for the period from December 21, 2001 (inception) to
October 31, 2008, and has no sales.  The future of the Company is
dependent upon its ability to obtain financing and upon future profitable
operations from the development of its mineral properties.  Management
is seeking additional capital through an equity financing.  The
consolidated financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts of and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.




2.
Stock Options




Effective
February 1, 2006, the Company adopted the provisions of SFAS No. 123(R)
“Share Based Payment” (SFAS No. 123(R)).  SFAS No. 123(R)
requires employee equity awards to be accounted for under the fair value
method.  Accordingly, share-based compensation is measured at grant
date based on the fair value of the award.  No stock options were
granted to employees during the three or nine-month periods ended October 31,
2008 or 2007.  Therefore no compensation expense is required to be
recognized under provisions of SFAS No. 123(R).




Prior to
February 1, 2006, the Company accounted for awards granted to employees under
its equity incentive plans using the intrinsic value method prescribed by
Accounting Principles Board (APB) Opinion No. 25, “Accounting for
Stock Issued to Employees” (APB 25), and related interpretations, and provided
the required pro forma disclosures prescribed by SFAS No. 123, “Accounting
for Stock-Based Compensation” (SFAS No. 123), as
amended.   No stock options were granted to employees during the
year ended January 31, 2006 and accordingly, no compensation expense was
recognized under APB No. 25 and no compensation expense was required to be
recognized under provisions of SFAS No. 123(R) with respect to
employees.




Under the
modified prospective method of adoption for SFAS No. 123(R), the
compensation cost recognized by the Company beginning on February 1, 2006
includes (a) compensation cost for all equity incentive awards granted
prior to, but not yet vested as of February 1, 2006, based on the grant-date
fair value estimated in accordance with the original provisions of SFAS
No. 123, and (b) compensation cost for all equity incentive awards
granted subsequent to February 1, 2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS
No. 123(R).  The Company uses the straight-line attribution
method to recognize share-based compensation costs over the service period of
the award. Upon exercise, cancellation, forfeiture, or expiration of stock
options, or upon vesting or forfeiture of restricted stock units, deferred tax
assets for options and restricted stock units with multiple vesting dates are
eliminated for each vesting period on a first-in, first-out basis as if each
vesting period was a separate award. To calculate the excess tax benefits
available for use in offsetting future tax shortfalls as of the date of
implementation, the Company followed the alternative transition method discussed
in FASB Staff Position No. 123(R)-3.





6


American
Goldfields Inc.


(An
Exploration Stage Company)





Notes to
the Financial Statements


(Unaudited)





October
31, 2008 and 2007





2.
Stock Options - continued





In March
2004, the Board of Directors adopted the American Goldfields Inc.’s 2004 Stock
Option Plan (the 2004 Plan) reserving 5,000,000 common shares for grant to
employees, directors and consultants.  Because additional stock
options are expected to be granted in future periods, the following stock-based
compensation expenses are not representative of the effects on reported
financial results for future periods.





During the nine-months ended October 31, 2008 the
Company did not grant any options under the 2004 plan.  During the
nine-months ended October 31, 2007, the Company granted 300,000 options under
the 2004 plan.  These options were valued using the Black-Scholes
option pricing model with the following assumptions:





2007Dividend
      yield
            
            
            0
            %Expected
      volatility
            
            
            126
            %Risk-free
      rate
            
            
            4.61
            %Expected
      life
            
            10
      years





For the
nine-month period ended October 31, 2007, $187,800 has been included in mineral
claim payments and exploration expenditures on the Statement of
Operations.





Activity
under the 2004 Plan is summarized as follows:





WeightedAverageOptions
            
            
            ExerciseOutstanding
            
            
            PriceBalance,
      January 31, 2008
            
            
            850,000
            
            
            $
            1.09Options
      granted
            
            
            -
            
            
            $
            -Options
      exercised
            
            
            -
            
            
            $
            -Balance,
      October 31, 2008
            
            
            850,000
            
            
            $
            1.09





The
following table summarizes information concerning outstanding and exercisable
common stock options under the 2004 Plan at October 31, 2008:





WeightedAverageRemaining
            
            
            Weighted
            
            
            Number
      of
            
            
            WeightedRange
      of
            
            
            Number
      of
            
            
            Contractual
            
            
            Average
            
            
            Options
            
            
            AverageExercise
            
            
            Options
            
            
            Life
            
            
            Exercise
            
            
            Currently
            
            
            ExercisePrices
            
            
            Outstanding
            
            
            (in
      Years)
            
            
            Price
            
            
            Exercisable
            
            
            Price$
            0.06
            
            
            
            50,000
            
            
            
            5.42
            
            
            $
            0.06
            
            
            
            50,000
            
            
            $
            0.06$
            1.00
            
            
            
            200,000
            
            
            
            7.67
            
            
            $
            1.00
            
            
            
            200,000
            
            
            $
            1.00$
            1.20
            
            
            
            600,000
            
            
            
            7.00
            
            
            $
            1.20
            
            
            
            600,000
            
            
            $
            1.20850,000
            
            
            
            7.06
            
            
            $
            1.09
            
            
            
            850,000
            
            
            $
            1.09





The
aggregate intrinsic value of stock options outstanding, as well as those
exercisable, at October 31, 2008 is $1,000.  All stock options
currently outstanding are exercisable so there is no unrecognized compensation
expense at October 31, 2008.  No stock options were exercised during
the three or nine-months ended October 31, 2008.





7


American
Goldfields Inc.


(An
Exploration Stage Company)





Notes to
the Financial Statements


(Unaudited)





October
31, 2008 and 2007





3.
Warrants


Warrants
      OutstandingBalance,
      January 31, 2008
            
            
            1,835,800Warrants
      granted
            
            
            -Warrants
      exercised
            
            
            (312,500
            )Balance,
      October 31, 2008
            
            
            1,523,300







The
following table lists the common share warrants outstanding at October 31,
2008.  Each warrant is exchangeable for one common share.





Quantity
            Exercise
              Price
            Exercise
              Period403,600
            $
      1.50
            November
      4, 2005 to November 4, 2010403,600
            $
      2.00
            May
      4, 2006 to May 4, 2011403,600
            $
      2.50
            November
      4, 2006 to November 4, 2011312,500
            $
      0.74
            February
      6, 2008 to February 6, 20131,523,300





4.
Related Party Transactions





On May
26, 2004, Mr. Richard Kern joined the Company’s Board of Directors and on
September 12, 2008 he was appointed as the Company’s President, Chief Executive
Officer, Secretary, and Treasurer.  Mr. Kern is also the President of
MinQuest Inc. (“MinQuest”).  All of the Company’s mineral properties
have been optioned from MinQuest.  The Cortez Property Option
Agreement requires the Company to use MinQuest as the primary contractor for
exploration activity undertaken on the properties.  All exploration
work undertaken on any of the Company’s properties will be at the direction and
discretion of the Company.   For the nine-months ended October
31, 2008, the Company made total property option payments of $65,000 (October
31, 2007 - $75,000) to MinQuest related to the property option payments for the
Cortez ($50,000) and the Gilman ($15,000) properties.  Included in the
net loss for nine-months ended October 31, 2008 is an amount of $4,980 (October
31, 2007 - $5,500) with respect to fees paid to Mr. Kern for geological services
rendered to the Company.





On July
12, 2006 the Company and its former President entered into an Agreement,
pursuant to which the Company acquired 3,000,000 common shares of the Company’s
stock owned by the former President for a purchase price of $0.01 per
share.   The payment of the $30,000 purchase price was made on
April 30, 2007.







5.
Mineral Property Interests





On May
30, 2008, the Company entered into an Assignment and Assumption Agreement (the
“Agreement”) with Patriot Gold Corp., a Nevada corporation (“Patriot”), to
assign the exclusive option to an undivided right, title and interest in 24
unpatented Federal mining claims located in Esmeralda County, Nevada known as
the Imperial Property (the “Property”). The Company had originally acquired
its exclusive option on the Property on June 30, 2004, when it entered into a
Property Option Agreement (the “Property Agreement”) with MinQuest, the owner of
the Property.





Pursuant
to the Agreement, Patriot assumed the rights, and agreed to perform all of the
duties and obligations, of the Company arising under the Property Agreement.
Simultaneous with the execution and delivery of the Agreement, Patriot paid the
Company $250,000, which amount represents the full payment and satisfaction for
the assignment by the Company to Patriot of the Property Agreement and all
rights and obligations with respect thereto. Included in the assignment were,
without limitation, all sums incurred by the Company in connection with the
Property, specifically (i) the refunding of the reclamation bond previously paid
by the Company to the Bureau of Land Management in Nevada in the amount of
$13,256; (ii) the $276,944 of expenditures incurred by the Company prior to the
Agreement; and (iii) the $120,000 paid to MinQuest as option payments under the
Property Agreement.





The
payment of $250,000 has been recorded as a $236,744 reduction in mineral claim
payments and exploration expenditures and a $13,256 recovery of the reclamation
deposits for the nine-months ended October 31, 2008.





8


Item
2.  Management’s Discussion and Analysis or Plan of
Operation





The
following discussion should be read in conjunction with the financial statements
of American Goldfields Inc. (the “Company”), which are included elsewhere in
this Form 10-Q.  Certain statements contained in this report,
including statements regarding the anticipated development and expansion of the
Company's business, the intent, belief or current expectations of the Company,
its directors or its officers, primarily with respect to the future operating
performance of the Company and the products it expects to offer and other
statements contained herein regarding matters that are not historical facts, are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act (the "Reform Act"). Future filings with the Securities and
Exchange Commission, future press releases and future oral or written statements
made by or with the approval of the Company, which are not statements of
historical fact, may contain forward-looking statements, as defined under the
Reform Act. Because such statements include risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements. For a more detailed listing of some of the risks and
uncertainties facing the Company, please see the January 31, 2008 Form 10-K
filed by the Company with the Securities and Exchange Commission.





All
forward-looking statements speak only as of the date on which they are made. The
Company undertakes no obligation to update such statements to reflect events
that occur or circumstances that exist after the date on which they are
made.





Business
Overview





The
Company was incorporated in the State of Nevada, U.S.A., on December 21,
2001.  The Company has been in the exploration stage since its
formation and has not yet realized any revenues from operations.  It
is primarily engaged in the acquisition and exploration of mining
properties.  Upon location of a commercially minable reserve, the
Company expects to actively prepare the site for extraction and enter a
development stage.





On May
30, 2008, the Company entered into an Assignment and Assumption Agreement (the
“Agreement”) with Patriot Gold Corp., a Nevada corporation (“Patriot”), to
assign the exclusive option to an undivided right, title and interest in 24
unpatented Federal mining claims located in Esmeralda County, Nevada known as
the Imperial Property (the “Property”). The Company had originally acquired
its exclusive option on the Property on June 30, 2004, when it entered into a
Property Option Agreement (the “Property Agreement”) with MinQuest, the owner of
the Property.





Pursuant
to the Agreement, Patriot assumed the rights, and agreed to perform all of the
duties and obligations, of the Company arising under the Property Agreement.
Simultaneous with the execution and delivery of the Agreement, Patriot paid the
Company $250,000, which amount represents the full payment and satisfaction for
the assignment by the Company to Patriot of the Property Agreement and all
rights and obligations with respect thereto. Included in the assignment were,
without limitation, all sums incurred by the Company in connection with the
Property, specifically (i) the refunding of the reclamation bond previously paid
by the Company to the Bureau of Land Management in Nevada in the amount of
$13,256; (ii) the $276,944 of expenditures incurred by the Company prior to the
Agreement; and (iii) the $120,000 paid to MinQuest as option payments under the
Property Agreement. The payment of $250,000 has been recorded as a $236,744
reduction in mineral claim payments and exploration expenditures and a $13,256
recovery of the reclamation deposits for the nine-months ended October 31,
2008.





Mr. Richard
Kern is the President of MinQuest Inc. and he became a member of the Board of
Directors of the Company on May 26, 2004. In addition, on September 12, 2008 he
was also appointed as the Company’s President, Chief Executive Officer,
Secretary, and Treasurer.  All of the Company’s current mineral
properties have been optioned from MinQuest. In addition, MinQuest has been
engaged by the Company as its principal exploration contractor for all
exploration performed on the Company’s current properties. As a result, a
significant portion of the Company’s expenses have been the result of activities
performed directly by Mr. Kern or by subcontractors managed by
Mr. Kern or MinQuest.  For the nine-months ended October 31,
2008, the Company made total property option payments of $65,000 (October 31,
2007 - $75,000) to MinQuest related to the property option payments for the
Cortez ($50,000) and the Gilman ($15,000) properties.  The Company
also paid $4,980 (October 31, 2007 - $5,500) in fees to Mr. Kern for geological
services rendered to the Company during such period.





Plan of
Operation





Over the
next twelve months, the Company intends to explore its various properties to
determine whether there are commercially exploitable reserves of gold and silver
or other metals.  The Company does not intend to hire any employees or
to make any purchases of equipment over the next twelve months, as it intends to
rely upon outside consultants to provide all the tools needed for the
exploratory work being conducted.





During
2007 the Company conducted drill programs on the Hercules Property, where
drilling was completed in March 2008, and on the Gilman Property, where drilling
started in January 2008 but was suspended due to winter conditions and has not
been restarted yet.  The Company is currently evaluating proposed
budgets for its various properties and as of yet has not determined the budgets
for the remainder of 2008 or for 2009.





9


Even with
the $250,000 received on May 30, 2008 from the assignment of the Imperial
Property, current cash on hand is insufficient for all of the Company’s
commitments for the next 12 months. We anticipate that the additional funding
that we require will be in the form of equity financing from the sale of our
common stock.  However, we cannot provide investors with any assurance
that we will be able to raise sufficient funding from the sale of our common
stock to fund additional phases of the exploration program, should we decide to
proceed.  We believe that debt financing will not be an alternative
for funding any further phases in our exploration program.  The risky
nature of this enterprise and lack of tangible assets places debt financing
beyond the credit-worthiness required by most banks or typical investors of
corporate debt until such time as an economically viable mine can be
demonstrated.  We do not have any arrangements in place for any future
equity financing.





Notwithstanding,
we cannot be certain that any required additional financing will be available on
terms favorable to us. If additional funds are raised by the issuance of our
equity securities, such as through the issuance and exercise of warrants, then
existing stockholders will experience dilution of their ownership interest. If
additional funds are raised by the issuance of debt or other equity instruments,
we may be subject to certain limitations in our operations, and issuance of such
securities may have rights senior to those of the then existing holders of
common stock. If adequate funds are not available or not available on acceptable
terms, we may be unable to fund expansion, develop or enhance services or
respond to competitive pressures.





Results of
Operations





We did
not earn any revenues during the three or nine-months ended October 31, 2008 or
2007.  We do not anticipate earning revenues until such time as we
have entered into commercial production of our mineral properties.  We
are presently in the exploration stage of our business and we can provide no
assurance that we will discover commercially exploitable levels of mineral
resources on our properties, or if such resources are discovered, that we will
enter into commercial production of our mineral properties.





During
the nine-months ended October 31, 2008, we had a net income of $23,421 compared
to a net loss of $564,697 for the comparative period in 2007.  We had
a net income for the nine-months ended October 31, 2008 due to the receipt of
$250,000 received from the assignment of the Imperial Property to Patriot Gold
Corp.  Of the $250,000, a total of $236,744 was recorded as a
reduction in exploration expenditures.  Excluding the effect of the
receipt of the funds from the assignment of the Imperial Property, the balance
of mineral claim payments and exploration expenditures was $167,528 for the
nine-months ended October 31, 2008 compared to $509,647 for the same period in
2007.  A significant portion of the decrease was due to the effect of
stock-based compensation which was recorded as mineral claim payments and
exploration expenditures in 2007.  Stock-based compensation for 2007
was $187,800 while there was no stock-based compensation in 2008.  In
the first nine-months of 2008 the Company’s most significant mineral claim
payments and exploration expenditures related to the final costs of the drilling
program and assay and lab analysis costs for the Hercules Property as well as
property option payments of $50,000 for the Cortez Property and $15,000 for the
Gilman Property.  In the first nine-months of 2007 the Company was
completing the drill programs on its Hercules and Bankop
properties.  Both of these drill programs had begun in the late fall
of 2006.  In addition, during 2007 the Company made property option
payments of $40,000 relating to the Cortez Property and $15,000 for the Gilman
Property.  The other factor was that in 2007 the Company made a
$20,000 property option payment on the Imperial Property whereas in 2008 the
Company assigned the Imperial Property to Patriot Gold Corp. and as a result was
not required to make the Imperial payment in 2008.





During
the three months ended October 31, 2008, we incurred a net loss of $37,412
compared to a net loss of $112,251 for the comparative period in
2007.  Our loss in the current quarter has decreased from the
corresponding period in 2007 largely due to decreased exploration
expenditures.  In the third quarter of 2007 the Company’s exploration
activity on the Hercules Property was greater than its mineral property
exploration expenditures for the quarter ended October 31,
2008.  Exploration activity for the three months ended October 31,
2008 related to expenses associated with new claim costs as well as mapping
expenses.  General and administrative expenses were largely similar
between 2008 and 2007.





Liquidity and Capital
Resources





We had
cash of $96,077 as of October 31, 2008. We anticipate that we will incur the
following through the next twelve months:





·
            $110,000
      in connection with property option payments and $693,000 in exploration
      expenditures of the Company’s
properties;





·
            $53,000
      for operating expenses, including working capital and general, legal,
      accounting and administrative expenses associated with reporting
      requirements under the Securities Exchange Act of
  1934.





Net cash
used in operating activities during the nine-months ended October 31, 2008 was
$165,612 compared to $501,951 during the nine-months ended October 31,
2007.  The decrease in cash used in operating activities was largely
the result of net income generated in 2008 due to the receipt of $250,000
received from the assignment of the Imperial Property to Patriot Gold
Corp.  The receipt of the $250,000 resulted in a net income of $23,421
in 2008 compared to a net loss of $564,697 in 2007.  The effect of the
higher loss in 2007 was reduced by the recognition of $187,800 in stock-based
compensation in 2007 while none was recognized during 2008.  The
paying down of accounts payable resulted in a cash outflow of $209,885 in 2008
while for the same period in 2007 the outflow from the payment of accounts
payable was $105,260.





Cash from
financing in 2008 was $218,750 received from the exercise of warrants while in
2007 $199,500 was received from the exercise of common stock
options.  Investing activities in 2008 related to the net refund of
reclamation deposits of 13,168 while in 2007 investing related to the payment of
reclamation bonds of $21,227.


10


Going Concern
Consideration





As shown
in the accompanying consolidated financial statements, the Company has incurred
a net loss of $3,863,181 for the period from December 21, 2001 (inception) to
October 31, 2008, and has no sales.  The future of the Company is
dependent upon its ability to obtain financing and upon future profitable
operations from the development of its mineral properties.  Management
has plans to seek additional capital through a private placement and public
offering of its common stock.  The consolidated financial statements
do not include any adjustments relating to the recoverability and classification
of recorded assets, or the amounts and classification of liabilities that might
be necessary in the event the Company cannot continue in existence.




There is
substantial doubt about our ability to continue as a going concern. Accordingly,
our independent auditors included an explanatory paragraph in their report on
the January 31, 2008 financial statements regarding concerns about our ability
to continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.





Off-Balance Sheet
Arrangements





We  do  not  have  any  off-balance
sheet debt nor did we have any transactions,
arrangements,  obligations  (including  contingent  obligations)  or  other
relationships  with any unconsolidated entities or other persons that
may have a material  current or future effect on financial conditions,
changes in financial
conditions,  result  of  operations,  liquidity,  capital  expenditures,
capital
resources,  or  significant  components  of  revenue  or  expenses.





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





Smaller
reporting companies are not required to provide the information required by this
Item 3.





Item
4. Controls and Procedures.





Evaluation of Disclosure
Controls and Procedures





Our  disclosure
controls and procedures are designed  to  ensure that
information required to be disclosed in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded,
processed,  summarized  and  reported  within  the  time  periods
specified  in the rules and forms of the United States Securities and
Exchange Commission. Our principal executive officer
and  principal  financial officer have reviewed the
effectiveness  of  our "disclosure
controls  and  procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this report and  have  concluded  that
our disclosure controls and procedures are effective to ensure that material
information relating to the Company is recorded, processed, summarized, and
reported in a  timely  manner.  There were no
significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the last day they were
evaluated by our principal executive officer and principal financial
officer.





Changes in Internal Controls
over Financial Reporting





There
have been no changes in the Company's internal control over financial reporting
during the last quarterly period covered by this report that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.





PART II -
OTHER INFORMATION


Item
1. Legal Proceedings.





There are
no pending legal proceedings to which the Company is a party or in which any
director, officer or affiliate of the Company is a party or has a material
interest adverse to the Company.  The Company’s property is not the
subject of any pending legal proceedings.





Item
1A. Risk Factors.





Smaller
reporting companies are not required to provide the information required by this
Item 1A.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





None.





Item
3. Defaults upon Senior Securities.





None.





Item
4. Submission of Matters to a vote of Security Holders.





There was
no matter submitted to a vote of security holders during the fiscal quarter
ended October 31, 2008





11


Item
5. Other information.





The
disclosure provided pursuant to Part II Item 2 above is incorporated herein by
reference.





Item
6. Exhibits.





Exhibit No.
            Description
            Where Found31.1
            Rule
      13a-14(a)/15d14(a) Certifications
            Attached
      Hereto32.1
            Section
      1350 Certifications
            Attached
      Hereto











SIGNATURES





Pursuant
to the requirements of Section 13 of 15(d) of the Securities Exchange act of
1934, as amended, the Registrant has duly caused this report to be signed on
behalf by the undersigned, thereunto duly authorized.





Date:   December
      1, 2008
              
              AMERICAN
      GOLDFIELDS INC.
              
              By: /s/ Richard
      Kern
              Richard
      Kern
              President,
      Chief Executive
              Officer,
      Secretary and Treasurer
              (Principal
      Executive, Financial, and Accounting
Officer)





12