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 **September 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
      December 8, 2006, the Issuer had 137,845,806 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 SEPTEMBER 30, 2006****Page**PART
                    I. FINANCIAL INFORMATIONItem
                    1. Financial StatementsCondensed
                    Consolidated Balance Sheets - As of
                    September 30, 2006 (Unaudited) and December
                    31, 2005
                3Condensed
                    Consolidated Statements of Operations and
                    Comprehensive Loss (Unaudited) -
                    Three and Nine Months Ended September 30, 2006 and
                    2005
                4Condensed
                    Consolidated Statements of Cash Flows
                    (Unaudited) - Nine Months Ended September30, 2006 and 2005
                5Notes
                    to Condensed Consolidated Financial
                    Statements
                6Item
                    2. Management’s Discussion and Analysis of Financial
                    Condition and Results of Operations
                11Item
                    3. Controls and Procedures
                12PART
                    II. OTHER INFORMATIONItem
                    1. Legal Proceedings
                13Item
                    2. Changes in Securities
                13Item
                    3. Defaults Upon Senior
                    Securities
                13Item
                    4. Submission of Matters to a Vote of Security
                    Holders
                13Item
                    5. Other Information
                14Item
                    6. Exhibits
                14Signatures
                15





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****September
                  30, 2006**
              
              **December
                  31,****(unaudited)**
              
              **2005****ASSETS**Cash
                  & cash equivalents
              
              $
              3,282,855
              
              $
              70,422Receivables
              
              
              11,788
              
              
              2,030Deferred
                  loan costs
              
              
              170,992
              
              
              –Total
                  current assets
              
              
              3,465,635
              
              
              72,452Property
                  and equipment, net
              
              
              2,029
              
              
              2,865Goodwill
                  - mining rights
              
              
              33,100
              
              
              33,100Deferred
                  loan costs
              
              
              42,749
              
              
              –Total
                  assets
              
              $
              3,543,513
              
              $
              108,417**LIABILITIES
                  AND SHAREHOLDERS’
                  EQUITY
                  (DEFICIT)**Accounts
                  payable and accrued liabilities
              
              $
              294,974
              
              $
              105,503Loan
                  payable
              
              
              3,708,193
              
              
              –Total
                  current liabilities
              
              
              4,003,167
              
              
              105,503Common
                  stock$.001
                  par value, 300,000,000 shares authorized,and
                  137,845,806 and 119,845,806 shares issued andoutstanding
                  as of September 30, 2006 andDecember
                  31, 2005, respectively
              
              
              137,846
              
              
              119,846Paid
                  in capital
              
              
              15,414,549
              
              
              14,736,286Deficit
                  accumulated during exploration stage
              
              
              (16,011,173
              )
              
              (14,877,424
              )Foreign
                  currency translation adjustment
              
              
              (876
              )
              
              24,206Total
                  shareholders’ equity
              
              
              (459,654
              )
              
              2,914Total
                  liabilities and shareholders’ equity
              
              $
              3,543,513
              
              $
              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**
                  
                  **Nine
                      months ended**
                  
                  **since****September
                      30,**
                  
                  **September
                      30,**
                  
                  **inception,****2006**
                  
                  **2005**
                  
                  **2006**
                  
                  **2005**
                  
                  **10/20/1989**Revenue
                      misc. (including interest)
                  
                  $
                  –
                  
                  $
                  –
                  
                  $
                  –
                  
                  $
                  –
                  
                  $
                  83,938Other
                      general & administrative costs
                  
                  
                  227,839
                  
                  
                  205,739
                  
                  
                  669,054
                  
                  
                  831,515
                  
                  
                  6,971,558Depreciation
                      and amortization
                  
                  
                  42,812
                  
                  
                  272
                  
                  
                  43,440
                  
                  
                  954
                  
                  
                  44,827Organizational
                      costs
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  120,000Write
                      off of Hiab project
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  7,697,615Exploration
                      expenses
                  
                  
                  126,977
                  
                  
                  12,518
                  
                  
                  292,808
                  
                  
                  218,628
                  
                  
                  749,441Acquisition
                      fee - related party
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  300,000Costs
                      for acquisition of mining rights
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  61,275General
                      & administrative costs
                  
                  
                  397,628
                  
                  
                  218,529
                  
                  
                  1,005,302
                  
                  
                  1,051,097
                  
                  
                  15,944,716Operating
                      loss
                  
                  
                  (397,628
                  )
                  
                  (218,529
                  )
                  
                  (1,005,302
                  )
                  
                  (1,051,097
                  )
                  
                  (15,860,778
                  )Other
                      income (expense):Foreign
                      currency loss
                  
                  
                  (29,949
                  )
                  
                  (950
                  )
                  
                  (82,824
                  )
                  
                  (9,071
                  )
                  
                  (109,807
                  )Interest
                      income
                  
                  
                  20,869
                  
                  
                  –
                  
                  
                  27,057
                  
                  
                  –
                  
                  
                  27,057Interest
                      expense
                  
                  
                  (63,582
                  )
                  
                  –
                  
                  
                  (79,308
                  )
                  
                  –
                  
                  
                  (79,308
                  )Other
                  
                  
                  2,945
                  
                  
                  –
                  
                  
                  6,628
                  
                  
                  –
                  
                  
                  11,663(69,717
                  )
                  
                  (950
                  )
                  
                  (128,447
                  )
                  
                  (9,071
                  )
                  
                  (150,395
                  )Loss
                      before income taxes
                  
                  
                  (467,345
                  )
                  
                  (219,479
                  )
                  
                  (1,133,749
                  )
                  
                  (1,060,168
                  )
                  
                  (16,011,173
                  )Provision
                      for income taxes
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –
                  
                  
                  –Net
                      loss
                  
                  $
                  (467,345
                  )
                  $
                  (219,479
                  )
                  $
                  (1,133,749
                  )
                  $
                  (1,060,168
                  )
                  $
                  (16,011,173
                  )Foreign
                      currency translation adjustment
                  
                  
                  (21,214
                  )
                  
                  543
                  
                  
                  (25,082
                  )
                  
                  9,119
                  
                  
                  (876
                  )Comprehensive
                      loss
                  
                  $
                  (488,559
                  )
                  $
                  (218,936
                  )
                  $
                  (1,158,831
                  )
                  $
                  (1,051,049
                  )
                  $
                  (16,012,049
                  )Net
                      loss per share - basic & diluted
                  
                  $
                  –
                  
                  $
                  –
                  
                  $
                  (0.01
                  )
                  $
                  (0.01
                  )Weighted
                      average shares outstanding
                  
                  
                  132,954,502
                  
                  
                  93,333,208
                  
                  
                  129,675,476
                  
                  
                  88,683,132
  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****Nine
                            months
                            ended**
                        
                        **since****September
                            30,**
                        
                        **inception,****2006**
                        
                        **2005**
                        
                        **10/20/1989**Cash
                            flows from operating activities:Reconciliation
                            of net loss to net cashused
                            by operating activities:Net
                            loss:
                        
                        $
                        (1,133,749
                        )
                        $
                        (1,060,168
                        )
                        $
                        (16,011,173
                        )Adjustments
                            to reconcile net loss to net cashused
                            by operating activities:Depreciation
                            and amortization
                        
                        
                        43,440
                        
                        
                        954
                        
                        
                        44,827Stock
                            and warrants issued in exchange for services
                        
                        
                        –
                        
                        
                        –
                        
                        
                        707,867Stock
                            issued for cancellation of warrants
                        
                        
                        –
                        
                        
                        –
                        
                        
                        38,063Changes
                            in Operating Assets and Liabilities:Receivables
                        
                        
                        (9,758
                        )
                        
                        3,043
                        
                        
                        (8,544
                        )Accounts
                            payable and accrued liabilities
                        
                        
                        189,471
                        
                        
                        235,973
                        
                        
                        572,496Due
                            to related parties
                        
                        
                        –
                        
                        
                        223,791
                        
                        
                        540,667Net
                            cash used by operating activities
                        
                        
                        (910,596
                        )
                        
                        (596,407
                        )
                        
                        (14,115,797
                        )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
                        
                        
                        720,000
                        
                        
                        590,477
                        
                        
                        13,877,051Net
                            proceeds from debt
                        
                        
                        3,708,193
                        
                        
                        –
                        
                        
                        3,708,193Net
                            borrowings from related parties
                        
                        
                        –
                        
                        
                        –
                        
                        
                        4,515Deferred
                            loan costs
                        
                        
                        (256,345
                        )
                        
                        –
                        
                        
                        (256,345
                        )Stock
                            issue costs
                        
                        
                        (23,737
                        )
                        
                        –
                        
                        
                        (28,935
                        )Stock
                            subscription deposits
                        
                        
                        –
                        
                        
                        –
                        
                        
                        67,095Net
                            cash provided by financing activities
                        
                        
                        4,148,111
                        
                        
                        590,477
                        
                        
                        17,371,574Effect
                            of exchange rate on cash
                        
                        
                        (25,082
                        )
                        
                        9,119
                        
                        
                        (876
                        )Net
                            increase in cash
                        
                        
                        3,212,433
                        
                        
                        3,189
                        
                        
                        3,282,855Cash
                            and cash equivalents at beginning of period
                        
                        
                        70,422
                        
                        
                        205,493
                        
                        
                        –Cash
                            and cash equivalents at end of period
                        
                        $
                        3,282,855
                        
                        $
                        208,682
                        
                        $
                        3,282,855
 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 September
                        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 nine months ended September
                        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 Hiab 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.
 6
 Table
                                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):**
  On
                                June
                                9, 2000 the name was changed to American Southwest
                                Holdings,
                                Inc.
 
 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 nine months ended September 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.
 *New
                                Accounting Pronouncements:*
 In
                              September 2006, the SEC issued SAB No. 108, “Considering the Effects
                              of Prior Year Misstatements when Quantifying Misstatements
                              in Current Year
                              Financial Statements,” to address diversity in practice in quantifying financial
                              statement misstatements. SAB No. 108 requires that the Company quantify
                              misstatements based on their impact on each of its
                              financial statements and
                              related disclosures. SAB No. 108 is effective as of the end of the 2006
                              fiscal year, allowing a one-time transitional cumulative
                              effect adjustment to
                              retained earnings as of January 1, 2006 for errors that were not previously
                              deemed material, but are material under the guidance
                              in SAB No. 108. The Company
                              does not expect SAB No. 108 will have a material effect on its financial
                              statements.
  In
                              September 2006, the FASB issued SFAS No. 158, “Employer’s Accounting
                              for Defined Benefit Pension and Other Postretirement
                              Plans - an amendment of
                              FASB Statements No. 87, 88, 106, and 132(R).” SFAS No. 158 requires
                              the recognition of the overfunded or underfunded status
                              of defined benefit and
                              retiree medical plans as an asset or liability in the
                              Company’s
                              2006 year-end balance sheet, with changes in the funded
                              status recognized
                              through comprehensive income in the year in which they
                              occur. SFAS No. 158
                              also requires the Company to measure the funded status
                              of defined benefit and
                              retiree medical plans as of the Company’s year-end balance sheet date no later
                              than 2008. The Company does not expect SFAS No. 158 will have a material
                              effect on its financial statements.
  In
                              September 2006, the FASB issued SFAS No. 157, “Fair Value
                              Measurements,” which defines fair value, establishes a framework for
                              measuring
                              fair value, and expands disclosures about fair value
                              measurements. SFAS
                              No. 157 is effective for fiscal years beginning after December 15,
                              2007. The Company does not expect SFAS No. 157 will have a material effect
                              on its financial statements.
 7
 Table
                                      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):**
 In
                              June 2006, the FASB issued FASB Interpretation No. 48, “An
                              Interpretation of FASB Statement No. 109,” which clarifies the accounting
                              for uncertainty in income taxes recognized in a company’s financial statements
                              in accordance with FASB Statement No. 109, “Accounting for Income Taxes.”
This Interpretation prescribes a recognition threshold
                              and measurement attribute
                              for the financial statement recognition and measurement
                              of a tax position taken
                              or expected to be taken in a tax return. FIN No. 48 reflects the benefit
                              recognition approach, where a tax benefit is recognized
                              when it is “more likely
                              than not” to be sustained based on the technical merits of the
                              position. This
                              Interpretation is effective for fiscal years beginning
                              after December 15,
                              2006. The Company is currently evaluating the impact
                              of FIN No. 48 on its
                              financial statements.
 In
                                      April 2006, the FASB issued FASB Staff Position (FSP) FIN
                                      No. 46(R)-6, “Determining the Variability to Be Considered
                                      in Applying FASB
                                      Interpretation No. 46(R)”, that will become effective beginning the
                                      third
                                      quarter of 2006. FSP FIN No. 46(R)-6 clarifies that the variability to be
                                      considered in applying FASB Interpretation
                                      46(R) shall be based on an analysis
                                      of the design of the variable interest entity.
                                      The adoption of this FSP did not
                                      have a material effect on the Company’s financial statements.
  In
                              March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of
                              Financial Assets,” which provides an approach to simplify efforts to obtain
                              hedge-like (offset) accounting. This new Statement amends SFAS
                              No. 140, “Accounting for Transfers and Servicing of Financial
                              Assets and
                              Extinguishments of Liabilities,” with respect to the accounting for separately
                              recognized servicing assets and servicing liabilities.
                              SFAS No. 156 is
                              effective for all separately recognized servicing assets
                              and liabilities as of
                              the beginning of an entity’s fiscal year that begins after September 15,
                              2006, with earlier adoption permitted in certain circumstances.
                              The Company does
                              not expect SFAS No. 156 will have a material effect on its financial
                              statements.
  The
                              FASB
                              has revised its guidance on SFAS No. 133 Implementation Issues as of
                              March 2006. Several Implementation Issues were revised to
                              reflect the
                              issuance of SFAS No. 155, “Accounting for Certain Hybrid Financial
                              Instruments - an Amendment of FASB Statements No. 133 and 140,” in
                              February 2006. SFAS No. 155 allows any hybrid financial instrument
                              that contains an embedded derivative that otherwise
                              would require bifurcation
                              under SFAS No. 133, “Accounting for Derivative Instruments and Hedging
                              Activities” to be carried at fair value in its entirety, with changes
                              in fair
                              value recognized in earnings. In addition, SFAS No. 155 requires that
                              beneficial interests in securitized financial assets
                              be analyzed to determine
                              whether they are freestanding derivatives or contain
                              an embedded derivative.
                              SFAS No. 155 also eliminates a prior restriction on the types
                              of passive
                              derivatives that a qualifying special purpose entity
                              is permitted to hold. SFAS
                              No. 155 is applicable to new or modified financial instruments
                              in fiscal
                              years beginning after September 15, 2006, though the provisions related to
                              fair value accounting for hybrid financial instruments
                              can also be applied to
                              existing instruments. The Company does not expect SFAS
                              No. 155 will have a
                              material effect on its financial statements.
  **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 September 30,
                              2006 in the amount of
                              $16,011,173. 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.
  8
 Table
                                      of Contents
  **AMERICAN
                                      SOUTHWEST HOLDINGS, INC. AND SUBSIDIARY**
 **(An
                                      Exploration Stage Company)**
 **NOTES
                                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                      (continued)**
  **2.**
                                              **Financial
                                                  Condition and Ability to Continue
                                                  as a Going Concern
                                                  (continued):**
  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 nine months ended September 30, 2006, the Company
                              issued shares of its
                              common stock as follows:
  ·
                                  9,000,000
                                      shares of its common stock and 9,000,000 common
                                      stock warrants in exchange
                                      for cash in the amount of $360,000. The warrants
                                      are exercisable at $0.04
                                      per warrant and expire December 31, 2006. ·
                                  9,000,000
                                      shares of its common stock in exchange for
                                      9,000,000 common stock warrants
                                      and cash in the amount of $360,000. 
 During
                              the nine months ended September 30, 2006, the Company
                              realized costs in the
                              amount of $23,737 in connection with its equity activity.
 
 During
                              the nine months ended September 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. ·
                                  13,084,000
                                      shares for cash in the amount of $611,090 and
                                      through the exercise of
                                      4,000,000 common stock warrants. ·
                                  6,825,000
                                      shares valued at $282,192 in payment of debt
                                      to various non-related
                                      parties. ·
                                  15,000,000
                                      shares valued at $600,000 in payment of debt
                                      to APC and through the
                                      exercise of 15,000,000 common stock
                                      warrants. 
 During
                              the nine months ended September 30, 2005, the Company
                              realized costs in the
                              amount of $20,613 in connection with its equity activity.
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  **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. Interest is due on December
                                    14, 2007, or at the time of
                                    conversion to common stock of Metal Sands Limited.
                                    Interest on the Notes is
                                    payable in cash or stock Metal Sands Limited,
                                    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 nine months ended September 30, 2006, the
                                    Company incurred expenses of
                                    $331,883 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 and consulting
                                    fees (discussed below). As of September 30, 2006,
                                    the Company owes APC
                                    $171,375.
 
 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.
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**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 September 30, 2006**
 **Operations**
  For
              the
              quarter ending September 30, 2006, the Company experienced a comprehensive loss
              of
              $488,559 which was comprised primarily of its general and administrative costs
              of
              $227,839, exploration expenses of $126,977, and net foreign currency loss
              and
              adjustment of $51,163. In comparison, during the quarter ending September
              30, 2005,
              the
              Company’s comprehensive loss was $218,936. The increase in the comprehensive
              loss in the 2006 quarter primarily resulted from 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 $300,000 from the exercise of outstanding
              warrants .
              The
              Company will need to continue substantial fund raising in
              2006
              and 2007, because the Company’s planned exploration program for its remaining mining
              properties requires expenditures of approximately $3,000,000 over the
              next 4
              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.
 
 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 similar
              markets 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 September 30, 2006. Our accumulated deficit at September 30,
              2006 was $16,011,173.
              All exploration costs are expensed as incurred.
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  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.
  **Nine
              Months Ending September 30, 2006**
  **Operations**
  For
              the
              nine months ending September 30, 2006, the Company experienced a comprehensive loss
              of
              $1,158,831, which was comprised primarily of its general and administrative costs
              of
              $669,054, exploration expenses of $292,808 and net foreign currency
              loss and
              adjustment of $107,906.  In comparison, during the nine months ending
              September 30, 2005,
              the
              Company’ s
              comprehensive loss was $1,051,049. The increase in the comprehensive
              loss in the 2006 period primarily resulted from increased net foreign
              currency
              loss and adjustment 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 September 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 September 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.
 
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 Table
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  **PART
        II – OTHER
        INFORMATION**
  **Item
                1.**
              **Legal
                  Proceedings.**
  There
        are
        no material legal proceedings pending for the Registrant at September 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 
(“APC”).  As of September 30, 2006, the Company owes APC
          $171,375.
 
 We
          are
          hopeful that MS-UK’s common stock will be admitted for trading
          on the London AIM Market before June 30, 2007. However, we currently have no
          arrangement or agreement with any underwriter to achieve such trading admission.
 
 Under
          applicable rules and regulations
          of the various countries in which our shareholders reside, most of our
          stock in
          MS-UK was distributed to our shareholders in foreign countries on September
          2,
          2006. It
          is
          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 similar markets
          in
          the future.
  During
          the quarter ended September 30, 2006, we issued 7,500,000 shares of common
          stock
          upon the exercise of 7,500,000 warrants to one non-U.S. resident for a
          total
          consideration of $300,000.  There was no preparation of the U.S. market in
          connection with this sale and the stock certificates issued in this transaction
          bear restrictive legends which prohibit the sale in the U.S. without an
          applicable registration statement or exemption therefrom.  African Pacific
          Capital Limited, an affiliate of our President, received a 6% commission
          on this
          sale.  We believe this transaction complies with Regulation S, as
          promulgated under the Securities Act of 1933.
 **Item
                3.**
              **Defaults
                  Upon Senior Securities**
 
 None.
  **Item
                4.**
              **Submission
                  of Matter to a Vote of Security
                  Holders**
  None.
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 Table
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 **Item
                5.**
              **Other
                  Information**
  None.
 
 **Item
                6.**
              **Exhibits**
  **Exhibit**
                **Number**
              ****
              **Description**31*
              
              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.
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 **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: 
                  December 13, 2006
                By:
                /s/ Alan
                  DoyleAlan
                    Doyle
                  President
                    (Chief Executive Officer)
                  and
                    Treasurer (Principal Financial
                    Officer)
  15