Table
          of Contents








**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549









FORM
      10-QSB




**QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
      EXCHANGE ACT OF 1934**




For
      the
      quarterly period ended **June 30, 2006**







Commission
      File No.:  **0-27947**




**AMERICAN
      SOUTHWEST HOLDINGS, INC.**


(Exact
      name of small business issuer as specified in its charter)






**Delaware**
            
            **86-0800964**(State
                or other jurisdiction of
            
            ****(I.R.S.
                Employer Identification Number)incorporation
                or
                organization)








**4225
      North Brown Avenue**


**Scottsdale,
      Arizona 85251**


(Address
      of principal executive offices)




**(480)
      946-4006**


(Issuer’s
      telephone
      number)










Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        such filing requirements for the past 90 days. Yes ý No o
  Indicate
          by check mark if the registrant is a shell
          company (as defined in Rule 12b-2 of the Act).  Yes 
          oNo ý


At
      September 1, 2006, the Issuer had 149,295,806 outstanding shares
      of common stock, $.001 par value.




Transitional
      Small Business Disclosure Format  Yes oNo ý


Table
          of Contents


**AMERICAN
                    SOUTHWEST HOLDINGS, INC.****(An
                    Exploration Stage Company)****TABLE
                    OF CONTENTS****FORM
                    10-QSB****FOR
                    THE QUARTER ENDED JUNE 30, 2006****Page**PART
                    I. FINANCIAL INFORMATIONItem
                    1. Financial StatementsCondensed
                    Consolidated Balance Sheets - As of June 30,
                    2006 (Unaudited) and December
                    31, 2005
                3Condensed
                    Consolidated Statements of Operations and
                    Comprehensive Loss (Unaudited) -
                    Six Months Ended June 30, 2006 and 2005
                4Condensed
                    Consolidated Statements of Cash Flows
                    (Unaudited) - Six Months Ended June
                    30, 2006 and 2005
                5Notes
                    to Condensed Consolidated Financial
                    Statements
                6Item
                    2. Management’s Discussion and Analysis of Financial
                    Condition and Results of Operations
                9Item
                    3. Controls and Procedures
                10PART
                    II. OTHER INFORMATIONItem
                    1. Legal Proceedings
                11Item
                    2. Changes in Securities
                11Item
                    3. Defaults Upon Senior
                    Securities
                11Item
                    4. Submission of Matters to a Vote of Security
                    Holders
                11Item
                    5. Other Information
                12Item
                    6. Exhibits
                12Signatures
                13





2
 Table
          of Contents





**PART
      I – FINANCIAL
      INFORMATION**




**Item
              1.**
            **Financial
                Statements**




**AMERICAN
                  SOUTHWEST HOLDINGS, INC. AND
                  SUBSIDIARY****(An
                  Exploration Stage Company)****Condensed
                  Consolidated Balance Sheets****June
                  30, 2006**
              
              **December
                  31,****(unaudited)**
              
              **2005****ASSETS**Cash
                  & cash equivalents
              
              $
              3,415,686
              
              $
              70,422Receivables
              
              
              16,030
              
              
              2,030Other
                  receivable
              
              
              5,000
              
              
              —Deferred
                  loan costs
              
              
              167,164
              
              
              —Total
                  current assets
              
              
              3,603,880
              
              
              72,452Property
                  and equipment, net
              
              
              2,237
              
              
              2,865Goodwill
                  - mining rights
              
              
              33,100
              
              
              33,100Deferred
                  loan costs
              
              
              83,582
              
              
              —Total
                  assets
              
              $
              3,722,799
              
              $
              108,417**LIABILITIES
                  AND SHAREHOLDERS’
                  EQUITY
                  (DEFICIT)**Accounts
                  payable and accrued liabilities
              
              $
              344,983
              
              $
              105,503Total
                  current liabilities
              
              
              344,983
              
              
              105,503Loan
                  payable
              
              
              3,625,174
              
              
              —Total
                  liabilities
              
              
              3,970,157
              
              
              105,503Common
                  stock$.001
                  par value, 300,000,000 shares authorized,and
                  130,345,806 and 119,845,806 shares issued andoutstanding
                  as of June 30, 2006 andDecember
                  31, 2005, respectively
              
              
              130,346
              
              
              119,846Paid
                  in capital
              
              
              15,145,786
              
              
              14,736,286Deficit
                  accumulated during development stage
              
              
              (15,543,828
              )
              
              (14,877,424
              )Foreign
                  currency translation adjustment
              
              
              20,338
              
              
              24,206Total
                  shareholders’ equity
              
              
              (247,358
              )
              
              2,914Total
                  liabilities and shareholders’ equity
              
              $
              3,722,799
              
              $
              108,417


The
            accompanying notes are an integral part of the condensed consolidated
            financial
            statements.
 3
 Table
          of Contents


**AMERICAN
                  SOUTHWEST HOLDINGS, INC. AND
                  SUBSIDIARY****(An
                  Exploration Stage Company)****Condensed
                  Consolidated Statements of Operations and Comprehensive
                  Loss****(unaudited)****Cumulative****Three
                  months ended**
              
              **Six
                  months ended**
              
              **since****June
                  30,**
              
              **June
                  30,**
              
              **inception,****2006**
              
              **2005**
              
              **2006**
              
              **2005**
              
              **10/20/1989**Revenue
                  misc. (including interest)
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              —
              
              $
              83,938Other
                  general & administrative costs
              
              
              300,131
              
              
              400,094
              
              
              441,215
              
              
              625,776
              
              
              6,743,719Depreciation
              
              
              312
              
              
              335
              
              
              628
              
              
              682
              
              
              2,015Organizational
                  costs
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              120,000Write
                  off of Hiab project
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              7,697,615Exploration
                  expenses
              
              
              100,292
              
              
              36,019
              
              
              165,831
              
              
              206,110
              
              
              622,464Acquisition
                  fee - related party
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              300,000Costs
                  for acquisition of mining rights
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              61,275General
                  & administrative costs
              
              
              400,735
              
              
              436,448
              
              
              607,674
              
              
              832,568
              
              
              15,547,088Operating
                  loss
              
              
              (400,735
              )
              
              (436,448
              )
              
              (607,674
              )
              
              (832,568
              )
              
              (15,463,150
              )Other
                  income (expense):Foreign
                  currency (loss) income
              
              
              (39,805
              )
              
              (3,421
              )
              
              (52,875
              )
              
              (8,121
              )
              
              (79,858
              )Interest
                  income
              
              
              6,188
              
              
              —
              
              
              6,188
              
              
              —
              
              
              6,188Interest
                  expense
              
              
              (15,726
              )
              
              —
              
              
              (15,726
              )
              
              —
              
              
              (15,726
              )Other
              
              
              72
              
              
              —
              
              
              3,683
              
              
              —
              
              
              8,718(49,271
              )
              
              (3,421
              )
              
              (58,730
              )
              
              (8,121
              )
              
              (80,678
              )Loss
                  before income taxes
              
              
              (450,006
              )
              
              (439,869
              )
              
              (666,404
              )
              
              (840,689
              )
              
              (15,543,828
              )Provision
                  for income taxes
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Net
                  loss
              
              $
              (450,006
              )
              $
              (439,869
              )
              $
              (666,404
              )
              $
              (840,689
              )
              $
              (15,543,828
              )Foreign
                  currency translation adjustment
              
              
              (19,043
              )
              
              4,142
              
              
              (3,868
              )
              
              8,121
              
              
              20,338Comprehensive
                  loss
              
              $
              (469,049
              )
              $
              (435,727
              )
              $
              (670,272
              )
              $
              (832,568
              )
              $
              (15,523,490
              )Net
                  loss per share - basic & diluted
              
              $
              —
              
              $
              —
              
              $
              (0.01
              )
              $
              (0.01
              )Weighted
                  average shares outstanding
              
              
              130,246,905
              
              
              87,558,762
              
              
              128,008,789
              
              
              86,319,557


The
            accompanying notes are an integral part of the condensed consolidated
            financial
            statements.
 4
 Table
          of Contents




**AMERICAN
                  SOUTHWEST HOLDINGS, INC. AND
                  SUBSIDIARY****(An
                  Exploration Stage Company)****Condensed
                  Consolidated Statements of Cash Flows****(unaudited)****Cumulative****since****Six
                  months ended June 30,**
              
              **inception,****2006**
              
              **2005**
              
              **10/20/1989**Cash
                  flows from operating activities:Reconciliation
                  of net loss to net cash used
                  by operating activities:Net
                  loss:
              
              $
              (666,404
              )
              $
              (840,689
              )
              $
              (15,543,828
              )Adjustments
                  to reconcile net loss to net cash used
                  by operating activities:Depreciation
              
              
              628
              
              
              682
              
              
              2,015Stock
                  and warrants issued in exchange for services
              
              
              —
              
              
              —
              
              
              707,867Stock
                  issued for cancellation of warrants
              
              
              —
              
              
              —
              
              
              38,063Changes
                  in Operating Assets and Liabilities:Receivable
              
              
              (14,000
              )
              
              (4,342
              )
              
              (12,786
              )Accounts
                  payable and accrued liabilities
              
              
              239,480
              
              
              193,159
              
              
              622,505Other
                  receivable
              
              
              (5,000
              )
              
              —
              
              
              (5,000
              )Due
                  to related parties
              
              
              —
              
              
              177,060
              
              
              540,667Net
                  cash used by operating activities
              
              
              (445,296
              )
              
              (474,130
              )
              
              (13,650,497
              )Cash
                  flows from investing activities:Purchase
                  of property and equipment
              
              
              —
              
              
              —
              
              
              (172
              )Costs
                  related to acquisition of Metal Sands Limited
              
              
              —
              
              
              —
              
              
              (24,038
              )Cash
                  received from acquisition of Metal Sands
              
              
              —
              
              
              —
              
              
              169,601Amounts
                  lent to Metal Sands prior to acquisition
              
              
              —
              
              
              —
              
              
              (117,437
              )Net
                  cash provided by investing activities
              
              
              —
              
              
              —
              
              
              27,954Cash
                  flows from financing activities:Sale
                  of stock and warrants
              
              
              420,000
              
              
              322,930
              
              
              13,577,051Net
                  proceeds from debt
              
              
              3,625,174
              
              
              —
              
              
              3,625,174Net
                  borrowings from related parties
              
              
              —
              
              
              —
              
              
              4,515Deferred
                  loan costs
              
              
              (250,746
              )
              
              —
              
              
              (250,746
              )Stock
                  issue costs
              
              
              —
              
              
              —
              
              
              (5,198
              )Stock
                  subscription deposits
              
              
              —
              
              
              —
              
              
              67,095Net
                  cash provided by financing activities
              
              
              3,794,428
              
              
              322,930
              
              
              17,017,891Effect
                  of exchange rate on cash
              
              
              (3,868
              )
              
              8,576
              
              
              20,338Net
                  increase (decrease) in cash
              
              
              3,345,264
              
              
              (142,624
              )
              
              3,415,686Cash
                  and cash equivalents at beginning of period
              
              
              70,422
              
              
              205,493
              
              
              —Cash
                  and cash equivalents at end of period
              
              $
              3,415,686
              
              $
              62,869
              
              $
              3,415,686


The
            accompanying notes are an integral part of the condensed consolidated
            financial
            statements.
 5
 Table
          of Contents





**AMERICAN
      SOUTHWEST HOLDINGS, INC. AND
      SUBSIDIARY**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**






**1.**
            **Summary
                of Significant Accounting Policies and Use of
                Estimates:**




***Presentation
        of Interim Information:***
 The
          condensed consolidated financial statements included herein have been prepared
          by American Southwest Holdings, Inc. (“we”, “us”, “our” or “Company”) without
          audit, pursuant to the rules and regulations of the United States Securities
          and
          Exchange Commission (“SEC”) and should be read in conjunction with our Annual
          Report on Form 10-KSB for the year ended December 31, 2005 as filed
          with the SEC under the Securities and Exchange Act of 1934. Certain information
          and footnote disclosures normally included in financial statements prepared
          in
          accordance with accounting principles generally accepted in the United
          States of
          America have been condensed or omitted, as permitted by the SEC, although
          we
          believe the disclosures, which are made are adequate to make the information
          presented not misleading. Further, the consolidated financial statements
          reflect, in the opinion of management, all normal recurring adjustments
          necessary to present fairly our financial position at June 30, 2006 and
          the
          results of our operations and cash flows for the periods presented. The
          December 31, 2005 consolidated balance sheet data was derived from audited
          consolidated financial statements, but does not include all disclosures
          required
          by accounting principles generally accepted in the United States of
          America.
 
 Interim
          results are subject to significant seasonal variations and the results
          of
          operations for the three and six months ended June 30, 2006 are not necessarily
          indicative of the results to be expected for the full year.
  ***Nature
          of Corporation:***
 American
          Southwest Holdings, Inc. (formerly Namibian Copper Mines, Inc.) is a mineral
          development company. It has previously investigated and initially invested
          in
          the Hiab Copper Project. The fund raising for this project was unsuccessful
          and
          all initial investment was lost and written off. Currently, the Company
          is
          investigating projects in Australia. In accordance with SFAS 7 the Company
          is
          considered an exploration stage company.
 
 The
          Company was incorporated in the state of Delaware on October 20, 1989,
          under the
          name of Cordon Corporation and subsequently changed its name to Ameriserv
          Financial Corporation (Ameriserv). On April 19, 1994, bankruptcy proceedings
          for
          Ameriserv finalized in the US Bankruptcy Court, Northern District of Texas.
          Under the terms of the bankruptcy, the Company was forced to liquidate
          all of
          its assets. The proceeds were then distributed among the creditors, thereby
          satisfying all of the Company’s outstanding debts. The Company halted operations
          and ceased to do business at the conclusion of the bankruptcy proceedings.
          The
          Company utilized fresh-start accounting in its reorganization effective
          July 28,
          1995.
 
 On
          July
          28, 1995 the name was changed to Namibian Copper Mines, Inc. and the Company
          invested in the feasibility study of the Haib Copper Project Namibia. Funds
          were
          raised through private placement and the Company earned an interest in
          this
          project. As a result of falling copper prices, the project became marginal
          and
          the Company made the decision to withdraw from the project.
  On
          June
          9, 2000 the name was changed to American Southwest Holdings, Inc.


6
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          of Contents





**AMERICAN
      SOUTHWEST HOLDINGS, INC. AND SUBSIDIARY**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)**






**1.**
            **Summary
                of Significant Accounting Policies and Use of Estimates
                (continued):**




During
          the year ended December 31, 2004, the Company acquired Metal Sands Limited
          (“MSL”). MSL is a mineral sands development company incorporated in Australia,
          with mineral sands tenements held in South West of Western Australia. MSL
          was
          incorporated in Australia on September, 8, 2000, as Rainbow Nominees Pty
          Ltd.
          MSL changed its name to Metal Sands Pty Limited on May 28, 2001, and to
          Metal
          Sands Pty Ltd on May 12, 2002. On June 21, 2002, MSL converted to an Australian
          public liability company, Metal Sands Limited. Metal Sands Limited had
          minimal
          operations from December 15, 2004, the date of acquisition, through December
          31,
          2004.
 
 During
          the six months ended June 30, 2006, the Company formed Metal Sands Mining
          - PLC,
          a company registered in England and Wales (“MS-UK”). MS-UK was formed to allow
          for additional capital raising opportunities in England.


**2.**
            **Financial
                Condition and Ability to Continue as a Going
                Concern:**




The
          Company has had no revenues from operations since inception and has a deficit
          from expenditures since inception to June 30, 2006 in the amount of $15,543,828.
          The Company has relied to date, and will continue to rely on its ability
          to
          raise equity to fund working capital requirements and fund exploration
          expenditures. Management will continue to control expenditures in line
          with its
          ability to raise equity working capital.
 
 The
          ability of the Company to obtain financing and adequately manage its expenses,
          and thus maintain solvency, is dependent on equity market conditions, the
          ability to find a joint venture partner, the market for precious metals,
          and the
          willingness of other parties to lend the Company money. While the Company
          has
          been successful at certain of these efforts in the past, there can be no
          assurance that current efforts will be successful. These financial statements
          do
          not reflect the outcome of these uncertainties.


**3.**
            **Stockholders’
                Equity:**





***Common
      Stock:***


During
        the six months ended June 30, 2006, the Company issued 10,500,000 shares
        of its
        commons stock and 9,000,000 common stock warrants in exchange for cash in
        the
        amount of $420,000. The warrants are exercisable at $0.04 per warrant and
        expire
        December 31, 2006.
 
 During
        the six months ended June 30, 2005, the Company issued shares of its common
        stock as follows:


·
            2,630,000
                  shares for in connection with common stock subscriptions issued
                  in the
                  prior year in the amount of
                  $67,095.


·
            6,734,000
                  shares for cash in the amount of
                  $343,543.


7
 Table
            of Contents
 
 **AMERICAN
        SOUTHWEST HOLDINGS, INC. AND SUBSIDIARY**
 **(An
        Exploration Stage Company)**
  **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)**


**4.**
                **Investment
                    Agreement and Loan Note
                    Instrument:**
 
 On
            June
            14, 2006, Metal Sands Mining - PLC, our United Kingdom subsidiary
            (“MS-UK”), issued secured
            convertible loan notes in exchange for £2,000,000 (the
            “Notes”). Interest
            on the Notes is 10% per annum through December 31, 2006, and 24% per annum
            thereafter. Principal and interest is due on December 14, 2007, or at
            the time
            of conversion
            to common stock of MS-UK. Interest on the Notes is payable
            in cash or stock of MS-UK, at the option of the noteholder.
 
 The
            Notes
            are convertible upon the admission of MS-UK’s common
            stock for trading on the London AIM Market. The conversion price for
            the Notes
            shall be the lesser of: (A) (i) 50% of the price per share of any offering of MS-UK
            on the London AIM Market, or (ii) the volume weighted average
            price per share for the first ten days of trading after MS-UK shares
            are admitted for trading on the London AIM Market; and (B) the price
            per
            share which results in the noteholders receiving 29.9% of MS-UK capital
            stock (excluding warrants). One Warrant will be issued with each share
            issued upon conversion, with an exercise price of 100% of the public offering
            price, if any, or 150% of the volume weighted average price after the AIMS
            Market listing.
  The
            Notes
            are secured by our Governor Broome mining tenement and six other mining
            tenements.
 **5.**
                **Related
                    Party Transactions:**
 
 During
          the six months ended June 30, 2006, the Company incurred expenses of $250,746
          in
          connection with services provided by Africa Pacific Capital Pty Ltd, a
          company
          owned by the Company's President (“APC”). 
The
          expenses represent fees paid in  relation to obtaining the aforementioned
          convertible debt.  As of June 30, 2006, the Company owes APC
          $121,375.
  In
          addition, the Company entered into a consulting
          agreement with APC providing for monthly fees of approximately $15,000. 
The contract is effective through the maturity of the convertible secured
          notes,
          listing on the London AIM Market, or sale of the Company.
  8
 Table
            of Contents


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


**Forward-Looking
        Statements**
 
 Certain
        matters discussed in this report may be forward-looking statements within
        the
        meaning of the Private Securities Litigation Reform Act of 1995. When used
        in
        this discussion, the words “believes,”
        “anticipates,” “expects,” and similar expressions are intended to identify
        forward-looking statements. Such matters involve risks and uncertainties
        that
        may cause actual results to differ materially, including the following: changes
        in economic conditions; general competitive factors; the Company’s ability to
        execute its business model and strategic plans; and the risks described from
        time to time in the Company’s filings with the Securities and Exchange
        Commission. The Company undertakes no obligation to republish revised
        forward-looking statements to reflect events or circumstances after the date
        hereof or to reflect the occurrence of unanticipated events.
 
 **Quarter
        Ending June 30, 2006**
 **Operations**
  For
              the
              quarter ending June 30, 2006, the Company experienced a comprehensive loss
              of
              $469,049 which was comprised primarily of its general and administrative costs
              of
              $300,131, exploration expenses of $100,292, and net foreign currency loss
              and
              adjustment of $58,848. In comparison, during the quarter ending June
              30, 2005,
              the
              Company’s comprehensive loss was $435,727. The increase in the comprehensive
              loss in the 2006 quarter primarily resulted from increased legal and
              accounting expenses, increased exploration expenses and increased net
              foreign currency
              loss and adjustment. The Company expects its exploration expenses to increase
              throughout the remainder of 2006 towards the completion of its exploration
              programs on its properties.
 **Liquidity
            and Capital Resources**
  The
              Company raised approximately $3,625,174 from its London financing during
              the quarter
              (see below). The Company will need to continue substantial fund raising in
              2006
              and 2007, because the Company’s planned exploration program for its mining
              properties requires expenditures of approximately $8,000,000 over the
              next 4
              years,
              with approximately $5,500,000 of exploration expenditures planned for the
              next
              two years.
 
 On
              June
              14, 2006, Metal Sands Mining - PLC, our United Kingdom subsidiary (“MS-UK”),
              issued secured
              convertible loan notes in exchange for £2,000,000
              (the
              "Notes"). Interest
              on the Notes is 10% per annum through December 31, 2006 and 24% per annum
              thereafter. Principal and interest is due on December 14, 2007 or at
              the time of conversion
              to common stock of MS-UK. Interest on the Notes is payable
              in cash or stock of MS-UK, at the option of the noteholder.  The
              Notes
              are secured by our Governor Broome mining tenement and six other mining
              tenements.
 
 We
              anticipate distributing most of our stock in MS-UK to our shareholders
              when such distribution is permitted under applicable rules and regulations
              of the various countries in which our shareholders reside. It is presently
              anticipated that our shareholders will be paid cash for fractional shares
              and small blocks of shares due to our shareholders. It is also presently anticipated
              that the MS-UK shares will not be distributed to U.S. residents
              until 2008. Since we have been successful at receiving funding for
              the Governor
              Broome project on the London AIM Exchange, we shall attempt to obtain additional
              funding for our other mining tenements in the same fashion in the future.
 
 Since
              we
              have not generated any revenue, we have included a reference to our ability
              to continue as a going concern with our financial statements for the quarter
              ended June 30, 2006. Our accumulated deficit at June 30, 2006 was $15,543,828.
              All exploration costs are expensed as incurred.
 9
 Table
              of Contents
  These
            financial statements have been prepared on the going concern basis, which assumes
            that adequate sources of financing will be obtained as required and that our
            assets will be realized, and liabilities settled in the ordinary course
            of business.
            Accordingly, these financial statements do not include any adjustments related
            to the recoverability of assets and classification of assets and liabilities
            that might be necessary should we be unable to continue as a going concern.
 In
            order
            to continue as a going concern, we will require additional financing. There
            can
            be no assurance that additional financing will be available to us when needed
            or, if available, that it can be obtained on commercially reasonable terms.
            If
            we are not able to continue as a going concern, we would likely be unable
            to
            realize the carrying value of our assets reflected in the balances set out
            in
            the preparation of the financial statements.
  **Six
              Months Ending June 30, 2006**
  **Operations**
  For
              the
              six months ending June 30, 2006, the Company experienced a comprehensive loss
              of
              $670,272, which was comprised primarily of its general and administrative costs
              of
              $441,215, exploration expenses of $165,831 and net foreign currency
              loss and
              adjustment of $56,743. In comparison, during the six months ending
              June 30, 2005,
              the
              Company’ s
              comprehensive loss was $832,568. The decrease in the comprehensive
              loss in the 2006 period primarily resulted from decreased general and
              administrative expenses .
 **Item
                3.**
              **Controls
                  and Procedures**
  Our
        President (Chief Executive Officer) and Treasurer (Principal Financial Officer),
        based on the evaluation of our disclosure controls and procedures has concluded
        that, as of as of June 30, 2006, our disclosure controls and procedures were
        ineffective to ensure that the information we are required to disclose in
        reports that we file or submit under the Securities and Exchange Act of 1934
        is
        recorded, processed, summarized and reported within the time periods specified
        in Securities and Exchange Commission rules and forms. More specifically,
        the
        Company identified a material weakness due to a lack of sufficient personnel
        with appropriate knowledge in U.S. GAAP and lack of sufficient analysis and
        documentation of the application of U.S. GAAP to transactions, including
        but not
        limited to equity transactions.  Management plans to identify an
        appropriate service provider to eliminate this material weakness.  During
        the quarter ended June 30, 2006, there was no change in our internal control
        over financial reporting identified in connection with the evaluation that
        has
        materially affected, or is reasonably likely to materially affect, our internal
        control over financial reporting.
 
 10
 Table
            of Contents
  **PART
        II – OTHER
        INFORMATION**
  **Item
                1.**
              **Legal
                  Proceedings.**
  There
        are
        no material legal proceedings pending for the Registrant at June 30,
        2006.
  **Item
                2.**
              **Changes
                  in Securities.**
  On
        June
        14, 2006, Metal Sands Mining - PLC, our United Kingdom subsidiary
        (“MS-UK”), issued secured
        convertible loan notes in exchange for £2,000,000 (the
        “Notes”). Interest
        on the Notes is 10% per annum through December 31, 2006, and 24% per annum
        thereafter. Principal and interest is due on December 14, 2007, or at the
        time
        of conversion
        to common stock of MS-UK. Interest on the Notes is payable
        in cash or stock of MS-UK, at the option of the noteholder.
 The
              Notes
              are convertible upon the admission of MS-UK’s common
              stock for trading on the London AIM Market. The conversion price for
              the Notes
              shall be the lesser of: (A) (i) 50% of the price per share of any offering of MS-UK
              on the London AIM Market, or (ii) the volume weighted average
              price per share for the first ten days of trading after MS-UK shares
              are admitted for trading on the London AIM Market; and (B) the price
              per
              share which results in the noteholders receiving 29.9% of MS-UK capital
              stock (excluding warrants). One Warrant will be issued with each share
              issued upon conversion, with an exercise price of 100% of the public offering
              price, if any, or 150% of the volume weighted average price after the AIMS
              Market listing.
 The
          Notes
          are secured by our Governor Broome mining tenement and six other mining
          tenements.
 
 A
          commission for the offering of the Notes of approximately $250,746 was paid
          to
          Africa Pacific Capital Pty Ltd, an affiliate of our President.  As of June
          30, 2006, the Company owes APC $121,375.
 
 We
          are
          hopeful that MS-UK’s common stock will be admitted for trading
          on the London AIM Market before December 31, 2006. However, we currently have no
          arrangement or agreement with any underwriter to achieve such trading admission.
 
 We
          anticipate distributing most of our stock in MS-UK to our shareholders
          when such distribution is permitted under applicable rules and regulations
          of the various countries in which our shareholders reside. It is presently
          anticipated that our shareholders will be paid cash for fractional shares
          and small blocks of shares due to our shareholders. It is also presently anticipated
          that the MS-UK shares will not be distributed to U.S. residents
          until 2008. Since we have been successful at receiving funding for the Governor
          Broome project on the London AIM Exchange, we shall attempt to obtain additional
          funding for our other mining tenements in the same fashion in the future.
 **Item
                3.**
              **Defaults
                  Upon Senior Securities**
 
 None.
  **Item
                4.**
              **Submission
                  of Matter to a Vote of Security
                  Holders**
  None.
 11
 Table
                of Contents
 **Item
                5.**
              **Other
                  Information**
  None.
 
 **Item
                6.**
              **Exhibits**
  **Exhibit**
                **Number**
              ****
              **Description**10.1*
              
              Letter
                Agreement (Mandate) between Metal Sands Limited and Africa Pacific
                Capital
                Pty Ltd, dated December 23, 200510.2*
              
              Loan
                  Note Investment Agreement, dated June 14, 200610.3*
              
              Loan
                Note Instrument, dated June 16, 200631*
              
              Certificate
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200232*
              
              Certificate
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002
 ____________
 * 
        Filed herewith.
  12
 Table
            of Contents
 
 **SIGNATURES**
 
 Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of
        1934, the Registrant has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto authorized.
 
 **AMERICAN
                  SOUTHWEST HOLDINGS, INC.**Date: 
                  September 19, 2006
                By:
                /s/ Alan
                  DoyleAlan
                    Doyle
                  President
                    (Chief Executive Officer)
                  and
                    Treasurer (Principal Financial
                    Officer)
  13