8


                                  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 JULY 31, 2007

                                       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:  20,667,878  shares of common
stock, $0.001 par value, issued and outstanding as of September 11, 2007.

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 ]





<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


American Goldfields Inc.
(An Exploration Stage Company)
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
                                                                                    July 31           January 31
                                                                                       2007                 2007
----------------------------------------------------------------------- --------------------- -------------------
Assets
CURRENT ASSETS
<S>                                                                     <C>                   <C>
     Cash and cash equivalents                                          $           168,907   $          385,512
     Prepaid expenses                                                                 2,276                1,699
                                                                        -- ------------------ -- ----------------

          Total current assets                                                      171,183              387,211

Reclamation deposits                                                                 43,841               33,741
Web-site development costs, net                                                           -                  500
                                                                        -- ------------------ -- ----------------

Total Assets                                                             $          215,024    $         421,452
===================================================================================================================

Liabilities

CURRENT LIABILITIES
     Accounts payable and accrued liabilities                            $           28,345   $         139,627
     Accounts payable - related party (note 4)                                            -              30,000
                                                                        -- ------------------ -- ----------------

          Total current liabilities                                                  28,345             169,627
                                                                        -- ------------------ -- ----------------
Stockholders' Equity

SHARE CAPITAL
     Authorized
          600,000,000 (January 31, 2007 - 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
          20,667,878 (January 31, 2007 - 20,292,878) common
            Shares issued and outstanding at July 31, 2007                            20,668            20,293
     Additional paid-in capital                                                    2,847,182         2,460,257
     Warrants                                                                        702,264           702,264

DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE                                  (3,383,435)       (2,930,989)
                                                                         -- ------------------ -- ----------------

          Total stockholders' equity                                                 186,679           251,825
                                                                         -- ------------------ -- ----------------

Total Liabilities and Stockholders' Equity                                $          215,024    $      421,452
===================================================================================================================
</TABLE>

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




                                       3
<PAGE>






American Goldfields Inc.
(An Exploration Stage Company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
                                                Three-Months Ended      Six-Months Ended
                                                      July 31               July 31                  Inception
                                                -------------------     ----------------         December 21, 2001
                                                   2007        2006        2007       2006        to July 31,2007
                                                -------     -------     -------    -------      --------------------
<S>                                         <C>            <C>        <C>        <C>              <C>
Expenses
     Mineral claim payments and
       exploration expenditures             $   239,631    $ 54,910   $ 413,389  $  90,299        $ 2,122,497
     Office and sundry                            8,814       9,450      16,930     16,325            477,210
     Rent                                         1,214       1,152       2,306      2,256             17,472
     Professional fees                           13,803       2,149      13,803      7,006            151,999
     Transfer agent fees                             10          35          95         35              6,130
     Amortization                                     -       1,500         500      3,000             18,000
     Directors' fees                              2,748       1,354       5,423      2,657             17,343
     Interest                                         -           -           -          -              1,070
     Consulting fees                                  -     195,600           -    222,100            583,027
                                            ----------------------------------------------------------------------
Total expenses                              $   266,220   $ 266,150  $  452,446 $  343,678        $ 3,394,748

Interest income                                       -       1,374           -      2,979             11,313
                                            ----------------------------------------------------------------------
Net loss for the period                     $  (266,220)  $(264,776)  $(452,446) $(340,699)       $(3,383,435)
===================================================================================================================

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


Weighted average shares outstanding
- basic and diluted                          20,459,182  25,338,530  20,388,596  25,611,110
===================================================================================================================
</TABLE>

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



                                       4
<PAGE>






American Goldfields Inc.
(An Exploration Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
                                                   Three-Months Ended          Six-Months Ended
                                                          July 31                   July 31             Inception
                                                    ------------------         ----------------      December 21, 2001
                                                        2007      2006           2007      2006      to July 31, 2007
------------------------------------------------    --------   -------        -------   -------     ------------------
<S>                                              <C>         <C>             <C>        <C>              <C>
Cash provided by (used in):

Cash flows used in operating activities
     Net loss for the period                     $ (266,220) $(264,776)      $(452,446) $(340,699)       $(3,383,435)
Adjustments to reconcile net loss to net
     Cash flows used in operating activities:
         Stock-based compensation                   187,800    195,600         187,800    195,600          1,729,000
         Amortization                                     -      1,500             500      3,000             18,000
       Changes in assets and liabilities
         Prepaid expenses                               (94)     5,446            (577)     4,987             (2,276)
         Accounts payable and accrued liabilities     4,876      2,961        (141,282)   (10,823)            32,888
                                                   -------------------       ---------------------   -----------------

      Net cash used in operating activities         (73,638)   (59,269)       (406,005)  (147,935)        (1,605,823)

Cash flows from (used in)financing activities
      Proceeds from loan                                   -         -               -          -             60,000
      Repayment of loan principal                          -         -               -          -            (60,000)
      Cancellation of common stock                         -  (30,000)               -    (30,000)           (60,000)
      Proceeds from the issue of common stock              -         -               -          -          1,104,571
      Proceeds from the exercise of stock options    195,000         -         199,500          -            774,000
                                                   -------------------       --------------------    -----------------
      Net cash from financing activities             195,000  (30,000)         199,500    (30,000)         1,818,571

Cash flows used in investing activities
      Reclamation deposits                           (10,100)   (3,614)        (10,100)    (3,614)          (43,841)
                                                   -------------------       --------------------    -----------------
      Net cash used in investing activities          (10,100)   (3,614)        (10,100)    (3,614)          (43,841)
                                                   -------------------        -------------------    -----------------

Increase (decrease) in cash                          111,262   (92,883)       (216,605)  (181,549)          168,907

Cash, beginning of period                             57,645   226,330         385,512    314,996                 -
                                                   -------------------       --------------------    -----------------
Cash, end of period                              $   168,907 $ 133,447       $ 168,907  $ 133,447        $  168,907
======================================================================================================================
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)

                             JULY 31, 2007 AND 2006

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,
2007. 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,  2007 has been
omitted.  The results of  operations  for the three and six month  periods ended
July 31, 2007 are not necessary indicative of results for the entire year ending
January 31, 2008.

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

As shown in the accompanying  financial  statements,  the Company has incurred a
net loss of $3,383,435 for the period from December 21, 2001 (inception) to July
31,  2007,  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  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

During the six-months ended July 31, 2007, a total of 375,000 common shares were
issued pursuant to the exercise of common stock options. Total proceeds received
by the Company for these issuances were $199,500.

3. 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
year ended  January  31,  2007 or the  six-month  period  ended  July 31,  2007.
Therefore no compensation  expense is required to be recognized under provisions
of SFAS No. 123(R) with respect to employees.

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

                                       6
<PAGE>

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 six-months ended July 31, 2007, the Company granted 300,000 (July 31,
2006 - 200,000) options under the 2004 plan. These options were valued using the
Black-Scholes option pricing model with the following assumptions:

                                     2007                2006
                               ----------- -- ----------------
  Dividend yield                       0%                  0%
  Expected volatility                126%                139%
  Risk-free rate                    4.61%               4.43%
  Expected life                  10 YEARS            10 years

For the three and  six-month  periods  ended July 31,  2007,  $187,800  has been
included in mineral claim payments and exploration expenditures on the Statement
of Operations while a consulting expense of $195,600 was recorded by the Company
in relation to the options  granted during for the quarter and six-months  ended
July 31, 2006.

Activity under the 2004 Plan is summarized as follows:


                                                                     Weighted
                                                                      Average
                                Options Exercise
                                Outstanding Price
                                           -----------------   -----------------
Balance, January 31, 2007                        925,000        $         1.00

Options granted                                  300,000        $         0.65
Options exercised                               (375,000)       $         0.53
                                           -----------------    ----------------

Balance, July 31, 2007                           850,000        $         1.09
                                           =================   =================

The  following  table   summarizes   information   concerning   outstanding  and
exercisable common stock options under the 2004 Plan at July 31, 2007:


<TABLE>
<CAPTION>
                       Weighted
                        Average
                                          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>
           $0.06          50,000             6.67           $   0.06             50,000         $      0.06
           $1.00         200,000             8.92           $   1.00            200,000         $      1.00
           $1.20         600,000             8.25           $   1.20            600,000         $      1.20
   ----------------- ---------------                                        -----------

                         850,000             8.31           $   1.09            850,000         $      1.09
                  ===============                                           ===========
</TABLE>


The aggregate  intrinsic  value of stock options  outstanding,  as well as those
exercisable,   at  July  31,  2007  is  $27,000.  All  stock  options  currently
outstanding are exercisable so there is no unrecognized  compensation expense at
July 31, 2007. The aggregate  intrinsic value of stock options  exercised in the
six-months ended July 31, 2007 was $92,250.

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 six months ended July 31, 2007,
the Company  made total  property  option  payments of $75,000  (July 31, 2006 -

                                       7
<PAGE>

$65,000) to MinQuest  related to the  property  option  payments  for the Cortez
($40,000), the Gilman ($15,000) and the Imperial ($20,000) properties.  Included
in the net loss for six months  ended July 31, 2007 is an amount of $3,500 (July
31, 2006 - $6,000) 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  $1,732  (July  31,  2006 - $744)  for  expenses
including  subcontractor  costs, claim filing fees,  documentation  preparation,
field sample costs and travel related to  exploration  activity on the Company's
properties.


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

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

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, 2007 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.

During 2006 the Company  conducted drill programs on the Hercules  Property that
was completed in February 2007 and on the Bankop  Property that was completed in
January 2007. For 2007 the Company intends to undertake a small drill program on
the Gilman Property and follow-up on work completed on the Hercules  Property in
2006 and the Crescent  Fault  Property  completed in 2005. The final budgets for
these programs are yet to be finalized and approved by the Board of Directors.

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 six months ended July 31, 2007
or 2006.  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.

                                       8
<PAGE>

During the six months  ended July 31,  2007,  we incurred a net loss of $452,446
compared to a net loss of $340,699 for the comparative  period in 2006. Our year
to date net loss for 2007 has  increased  over  2006  largely  due to  increased
mineral claim  payments and  exploration  expenditures.  In the first quarter 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. For
the six months ended July 31, 2006, the only significant  mineral claim payments
and exploration  expenditures related to the property options payments. No drill
programs were ongoing in the first six months of 2006.  For the six months ended
July 31, 2007,  the Company made total  property  option  payments of $75,000 to
MinQuest related to the property option payments for the Cortez  ($40,000),  the
Gilman  ($15,000) and the Imperial  ($20,000)  properties.  In 2006, the Company
recorded  $65,000 of property  option  payments  relating to the initial  option
payment on the Cortez  Property  ($30,000)  and option  payments on the Imperial
($20,000) and Gilman  ($15,000)  properties.  Total  mineral claim  payments and
exploration  expenditures  also  increased  significantly  due to the  effect of
stock-based  compensation.  Stock-based compensation for 2007 was $187,800 while
it was $195,600 in 2006.  However,  in 2007,  stock options  granted  related to
mineral claim payments and exploration  expenditures  while in 2006 they related
to consulting.

During the three months ended July 31, 2007,  we incurred a net loss of $266,220
compared to a net loss of $264,776 for the comparative  period in 2006. Our loss
for the current  quarter for 2007 is consistent  with that of the same period in
2006. However, the total for mineral claim payments and exploration expenditures
increased   significantly  due  to  the  effect  of  stock-based   compensation.
Stock-based  compensation  for 2007 was $187,800  while it was $195,600 in 2006.
However,  in 2007,  stock options  granted related to mineral claim payments and
exploration expenditures while in 2006 they related to consulting.

Liquidity and Capital Resources

We had cash of $168,907 as of July 31, 2007.  We  anticipate  that we will incur
the following through to the end of July 2007:

o        $105,000 in  connection  with  mineral  claim  payments and $653,000 in
         exploration expenditures of the Company's properties;

o        $85,000 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 six months ended July 31, 2007
was $406,005 compared to $147,935 during the six months ended July 31, 2006. The
increase in cash used in operating activities was the result of an increased net
loss in 2007 as well as the  effect  of the  paying  down of  accounts  payable.
During the  six-months  ended July 31,  2007 the  Company  used cash to pay down
accounts  payable by $141,282 while for the same period in 2006 the outflow from
the payment of accounts payable was $10,823.

Cash from  financing in 2007 related to $199,500  received  from the exercise of
common stock options while cash used in financing in 2006 of $30,000  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.
Investing  activities related to the payment of reclamation bonds of $10,100 and
$3,614 in 2007 and 2006 respectively.

Going Concern Consideration

As shown in the accompanying consolidated financial statements,  the Company has
incurred  a net  loss of  $3,383,435  for the  period  from  December  21,  2001
(inception)  to July 31,  2007,  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  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, 2007 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

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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.

 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:   September 11, 2007

AMERICAN GOLDFIELDS INC.

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