UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (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, 2006

                                       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 NUMBER000-49995

                            AMERICAN GOLDFIELDS INC.

             (Exact name of registrant as specified in its charter)




              Nevada                                    71-0867612
    (State or other jurisdiction            (I.R.S. Employer Identification No.)
 of incorporation or organization)


            200-4170 Still Creek Drive, Burnaby B.C. V5C 6C6, Canada
               (Address of principal executive offices) (Zip Code)

                                 (604) 299-6600
              (Registrant's telephone number, including area code)

(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 the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest  practicable  date:  23,092,878  shares of common
stock, $0.001 par value, issued and outstanding as of December 7, 2006.

Transitional Small Business Disclosure Format (elect one) ___ Yes __X___ No

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





                                       1
<PAGE>





                                TABLE OF CONTENTS


                                                                          Page
PART I  - Financial Information                                                3
  Item 1. Financial Statements                                                 3
  Item 2. Management's Discussion and Analysis or Plan of Operation            8
  Item 3 Controls and Procedures                                               9
PART II - Other Information                                                   10
  Item 1.  Legal Proceedings                                                  10
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds         10
  Item 3. Defaults Upon Senior Securities                                     10
  Item 4. Submission of Matters to a Vote of Security Holders                 10
  Item 5. Other Information                                                   10
  Item 6. Exhibits                                                            10





                                       2
<PAGE>



                          PART I. FINANCIAL INFORMATION

 ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
American Goldfields Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets
(Unaudited)
                                                                              October 31          January 31
                                                                                  2006                2006
----------------------------------------------------------------------- --------------------- -------------------
<S>                                                                     <C>                   <C>
Assets
CURRENT ASSETS
     Cash and cash equivalents                                          $           292,955   $          314,996
     Prepaid expenses                                                                 2,323                6,629
                                                                        -- ------------------ -- ----------------

          Total current assets                                                      295,278              321,625

Reclamation deposits                                                                 33,740               27,207
Web-site development costs, net                                                       2,000                6,500
                                                                        -- ------------------ -- ----------------

Total Assets                                                             $          331,018    $         355,332
===================================================================================================================

Liabilities

CURRENT LIABILITIES
     Accounts payable and accrued liabilities                            $           16,636   $          26,808
                                                                        -- ------------------ -- ----------------

          Total current liabilities                                                  16,636              26,808
                                                                        -- ------------------ -- ----------------
Stockholders' Equity

SHARE CAPITAL
     Authorized
          600,000,000 (January 31, 2006 - 600,000,000 common
            shares with a par value of $0.001 per share
          100,000,000 preferred shares with a par value of $0.001
            per share
     Issued
          23,092,878 (January 31, 2006 - 25,892,878) common
            Shares issued and outstanding at October 31, 2006                         23,093             25,893
     Additional paid-in capital                                                    2,949,721          2,541,321

DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE                                  (2,658,432)        (2,238,690)
                                                                         -- ------------------ -- ----------------

          Total stockholders' equity                                                 314,382            328,524
                                                                         -- ------------------ -- ----------------

Total Liabilities and Stockholders' Equity                                $          331,018    $       355,332
===================================================================================================================
</TABLE>

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






                                       3
<PAGE>





<TABLE>
<CAPTION>
American Goldfields Inc.
(An Exploration Stage Company)
Consolidated Statements of Loss
(Unaudited)
                                                 Three-Months Ended      Nine-Months Ended
                                                     October 31             October 31               Inception
                                            --------------------------- ---------------------     December 21, 2001
                                                   2006        2005        2006       2005       to October 31,2006
                                            ----------------------------------------------------------------------
<S>                                         <C>            <C>        <C>        <C>              <C>
Expenses
     Mineral claim payments and
       exploration expenditures             $    62,674    $183,196   $ 152,973  $ 422,095        $ 1,468,294
     Office and sundry                            9,680       4,764      26,005     22,277            449,238
     Rent                                           741         979       2,997      3,086             13,997
     Professional fees                            2,953           -       9,959      9,919            122,936
     Transfer agent fees                            375           -         410          -              5,975
     Amortization                                 1,500       1,500       4,500      4,500             16,000
     Directors' fees                              1,120           -       3,777          -              9,208
     Interest                                         -           -           -          -              1,070
     Consulting fees                                  -           -     222,100          -            583,027
                                            ----------------------------------------------------------------------
Total expenses                             $     79,043  $  190,439   $ 422,721  $ 461,877        $ 2,669,745

Interest income                                       -       3,183       2,979      5,786             11,313
                                            ----------------------------------------------------------------------
Net loss for the period                    $    (79,043) $ (187,256)  $(419,742) $(456,091)       $(2,658,432)
===================================================================================================================

Basic and diluted loss per share
    of common stock                         $     (0.00)   $  (0.01)  $   (0.02) $  (0.02)
===================================================================================================================


Weighted average shares outstanding
- basic and diluted                          23,010,269  25,842,878   24,734,636 25,836,468
===================================================================================================================
</TABLE>

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





                                       4
<PAGE>





<TABLE>
<CAPTION>
American Goldfields Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
                                                    Three-Months Ended        Nine-Months Ended
                                                         October 31                October 31            Inception
                                                 ----------------------      --------------------     December 21, 2001
                                                        2006      2005           2006      2005     to October 31, 2006
------------------------------------------------ ----------------------      --------------------    -----------------
<S>                                              <C>         <C>             <C>        <C>              <C>
Cash provided by (used in):

Cash flows used in operating activities
     Net loss for the period                     $   (79,043)$(187,256)      $(419,742) $(456,091)       $(2,658,432)
     Adjustments to reconcile net loss to net
       Cash flows used in operating activities:
         Stock-based compensation                         -          -         195,600          -          1,541,200
         Amortization                                  1,500     1,500           4,500      4,500             16,000
       Changes in assets and liabilities
         Prepaid expenses                               (681)     (337)          4,306     (5,337)            (2,323)
         Accounts payable and accrued liabilities        651    72,193         (10,172)    66,526             21,179
                                                   --------------------      --------------------    -----------------

      Net cash used in operating activities         (77,573)  (113,900)        (225,508) (390,402)        (1,082,376)
                                                   --------------------      --------------------    -----------------
Cash flows from (used in)financing activities
      Proceeds from loan                                   -        -                -          -             60,000
      Repayment of loan principal                          -        -                -          -            (60,000)
      Redemption of common shares                          -        -          (30,000)         -            (30,000)
      Proceeds from the issue of common stock              -        -                -          -          1,104,571
      Proceeds from the exercise of stock options    240,000        -          240,000      1,500            334,500
                                                   ------------------        --------------------    -----------------
      Net cash from financing activities             240,000        -          210,000      1,500          1,409,071
                                                   ------------------        --------------------    -----------------
Cash flows used in investing activities
      Reclamation deposit                             (2,919)       -           (6,533)   (11,490)          (33,740)
                                                   ------------------        --------------------    -----------------
      Net cash used in investing activities           (2,919)       -           (6,533)   (11,490)          (33,740)
                                                   ------------------         -------------------    -----------------

Increase (decrease) in cash                          159,508 (113,900)         (22,041)  (400,392)           292,955

Cash, beginning of period                            133,447  560,707          314,996    847,199                  -
                                                   ------------------        --------------------    -----------------
Cash, end of period                              $   292,955 $446,807        $ 292,955  $ 446,807         $  292,955
======================================================================================================================
SCHEDULE OF NON-CASH ACTIVITIES
      Settlement of accounts payable  by contribution
         from a shareholder                      $        -  $      -        $       -  $       -         $    4,543
      Web-site development costs related to non-
         Employee stock-based compensation       $        -  $      -        $       -  $       -         $   18,000
</TABLE>

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





                                       5
<PAGE>




                            AMERICAN GOLDFIELDS INC.
                         (An Exploration Stage Company)
                        Notes to the Financial Statements
                                   (Unaudited)

                            OCTOBER 31, 2006 AND 2005

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-QSB should be read
in  conjunction  with the  Company's  financial  statements  and  notes  thereto
included in the  Company's  Form  10-KSB for the fiscal  year ended  January 31,
2006. 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-KSB for the  fiscal  year ended  January  31,  2006 has been
omitted.  The results of  operations  for the three and nine month periods ended
October 31,  2006 are not  necessary  indicative  of results for the entire year
ending January 31, 2007.

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  $2,658,432  for the  period  from  December  21,  2001
(inception) to October 31, 2006, 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. ISSUED SHARES

On July 14,  2006 Mr.  Greg Crowe  resigned  as a Director  of the  Company.  In
connection  with his  resignation,  the Company  and Mr.  Crowe  entered  into a
Redemption Agreement, dated July 14, 2006, pursuant to which Mr. Crowe agreed to
sell the  3,000,000  common  shares  of the  Company  owned by Mr.  Crowe to the
Company at a price of $0.01 per share.  The Company paid Mr.  Crowe  $30,000 and
returned the shares to treasury for cancellation.

3. STOCK OPTIONS

Effective  February 1, 2006,  the company  adopted  the  provisions  of SFAS No.
123(R).  SFAS No. 123(R)  requiring  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.  Prior to February 1, 2006,
the company accounted for awards granted to employees under its equity incentive
plans under 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 three or
nine months  ended  October 31, 2006 or 2005 and  accordingly,  no  compensation
expense  was  recognized  under APB No. 25 for the  three or nine  months  ended
October 31, 2006 or 2005. In addition, no compensation expense is 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


                                       6
<PAGE>

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.

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,  2006,  the Company  granted  200,000
options  under the 2004 plan to its  President.  These options were valued using
the  Black-Scholes  option  pricing  model with the following  assumptions:  (1)
dividend  yield of 0%, (2) expected  volatility of 139%,  (3) risk free interest
rate of 4.43%  and,  (4)  expected  life of 10 years.  A  consulting  expense of
$195,600 has been  recorded by the Company in relation to these  options for the
nine-months  ended October 31, 2006. The Company did not grant any  non-employee
stock options during either of the three or nine-month periods ended October 31,
2005.

Activity under the 2004 Plan is summarized as follows:


                                    Weighted
                                                                      Average
                                               Options               Exercise
                                             Outstanding               Price
                                           -----------------   -----------------
Balance, January 31, 2006                      1,225,000        $         1.08

Options granted                                  200,000        $         1.00
Options cancelled                               (100,000)       $         1.20
Options exercised                               (200,000)       $         1.20
                                           -----------------   -----------------

Balance, October 31, 2006                      1,125,000         $        1.04
                                           =================   =================



The  following  table   summarizes   information   concerning   outstanding  and
exercisable common stock options under the 2004 Plan at October 31, 2006:

<TABLE>
<CAPTION>
                                          Remaining           Weighted         Number of            Weighted
        Range of       Number of        Contractual            Average           Options             Average
        Exercise         Options               Life           Exercise         Currently            Exercise
          Prices     Outstanding        (in Years)              Price       Exercisable               Price
----------------- --------------- -- --------------- --- -------------- --- ------------- --- ---------------
<S>        <C>           <C>                 <C>            <C>                 <C>             <C>
           $0.06         125,000             7.42           $   0.06            125,000         $      0.06
           $1.00         200,000             9.67           $   1.00            200,000         $      1.00
           $1.20         800,000             9.00           $   1.20            800,000         $      1.20
   ----------------- ---------------                                        -----------

                       1,125,000             8.94           $   1.04          1,125,000         $      1.04
                  ===============                                           ===========
</TABLE>


4. RELATED PARTY TRANSACTIONS

On May 26, 2004, Mr. Richard Kern joined the Company's  Board of Directors.  Mr.
Kern is also the  President of MinQuest Inc  ("MinQuest").  All of the Company's
mineral  properties  have been optioned from  MinQuest.  The Imperial and Cortez
Property  Option  Agreements  require 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,
2006,  the Company made total property  payments of $65,000  (October 31, 2005 -
$100,000) to MinQuest related to the Cortez  ($30,000),  the Imperial  ($20,000)
and Gilman ($15,000) properties.  Included in the net loss for nine months ended
October  31,  2006 is an amount of $9,000  (October  31,  2005 -  $18,000)  with
respect  to fees  paid to Mr.  Kern  for  geological  services  rendered  to the
Company. In addition, the Company has reimbursed Mr. Kern or MinQuest a combined
total  of  $23,161   (October  31,  2005  -  $75,039)  for  expenses   including
subcontractor costs, claim filing fees, documentation preparation,  field sample
costs and travel related to exploration activity on the Company's properties.





                                       7
<PAGE>

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-QSB.  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, 2006 Form 10-KSB
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.

Plan of Operation

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 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.

Over the next twelve months,  the Company intends to explore 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 nor 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.

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,
2006 or 2005. 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,  2006,  we  incurred a net loss of
$419,742 compared to a net loss of $456,091 for the comparative  period in 2005.
Our  year to date net loss for 2006  has  decreased  over  2005  largely  due to
mineral  claim  payments  and  exploration  expenditures.  In 2006  the  Company
incurred  annual  property  option  payments  of $65,000  relating to the Cortez
($30,000),  Imperial ($20,000) and the Gilman ($15,000) properties. In 2005, the
Company  recorded  $100,000 of property option payments  relating to the initial
option payment on the Cortez Properties  ($65,000) and annual option payments on
the Imperial ($20,000) and Gilman ($15,000) properties.  In 2006 the exploration
program on the Cortez  Property was well underway while the drill program on the
Hercules had not yet started.  In 2005 the Company incurred costs related to the
entire  second  phase of the  drilling  program  on the  Imperial  Property.  In
addition,  auger  drilling  programs  commenced  on both the Hercules and Cortez
Properties during the quarter ended October 31, 2005.  Partially  offsetting the
higher  mineral claim  payments and  exploration  expenditures  in 2005 are 2006
costs related to stock-based compensation of $195,600 for options granted to our
President. No stock-based compensation was recognized in 2005.

During the three  months  ended  October  31,  2006,  we  incurred a net loss of
$79,043  compared to a net loss of $187,256 for the comparative  period in 2005.
Our loss in the current quarter has decreased over the  corresponding  period in
2005 largely due to exploration expenditures. In the third quarter the Company's
current  exploration  activity on the Hercules and Cortez Properties in 2006 was
less than its total mineral property acquisition and exploration expenditures in
2005  relating to the Imperial,  Cortez,  and Hercules  Properties.  General and
administrative expenses were largely similar between 2006 and 2005.



                                       8
<PAGE>

Liquidity and Capital Resources

We had cash of $292,955 as of October 31, 2006. We anticipate that we will incur
the following through the next twelve months:

o        $55,000 in  connection  with property  option  payments and $374,000 in
         exploration expenditures of the Company's properties;

o        $100,000 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,
2006 was $225,508  compared to $390,402  during the  corresponding  period ended
October 31, 2005. Cash used in operations in the current  nine-month  period was
lower  than in the  prior  period  due to a  decrease  in the  net  loss in 2006
($419,742)  compared to 2005  ($456,091).  In addition,  in 2006 a non-cash item
related to stock-based  compensation  of $195,600 was  recognized  while no such
item occurred in 2005.  Partially  offsetting these two factors was the increase
in accounts payable and accrued liabilities of $66,526 in 2005 while a reduction
of $10,172 occurred in 2006.

Cash inflows from financing  consisted of stock option  exercises of $240,000 in
2006  compared  to $1,500 in 2005.  Cash used in  financing  of  $30,000 in 2006
related to the purchase and redemption of 3,000,000  common shares  purchased by
the Company from Greg Crowe upon his  resignation  from the  Company's  Board of
Directors.  Cash  outflows  from  investing  for both  nine-month  periods ended
October 31 related to reclamation deposits paid to the Bureau of Land Management
in Nevada.

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.

Going Concern Consideration

As shown in the accompanying consolidated financial statements,  the Company has
incurred  a net  loss of  $2,658,432  for the  period  from  December  21,  2001
(inception) to October 31, 2006, 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  of 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, 2006 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. 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 Chief Executive Officer and Chief Financial Officer
have reviewed the effectiveness of our "disclosure  controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-15(f) and 15d-15(f)) as
of the end of the period  covered by this  report  and have  concluded  that the
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 Chief  Executive  Officer
and Chief Financial Officer.





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 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, any owner of record or
beneficially  of more than 5% of any class of voting  securities of the Company,
or security holder is a party adverse to the Company or has a material  interest
adverse to the Company. The Company's property is not the subject of any pending
legal proceedings.

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.

None.

ITEM 5. OTHER INFORMATION.

The Company does not have any procedures by which security holders can recommend
nominees to the Board of Directors.

ITEM 6. EXHIBITS.

Exhibit No.            Description                         Where Found
31.1          Rule        13a-14(a)/15d14(a)  Attached Hereto
              Certifications
32.1          Section 1350 Certifications     Attached Hereto






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                                   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 7, 2006

                            AMERICAN GOLDFIELDS INC.

By:   /s/ Donald Neal
       Donald Neal
       President, Chief Executive
       Officer, Secretary and Treasurer




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