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|OMB APPROVAL                                                                                      
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB



[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2006



OR



[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



From ________________ to ________________



US PRECIOUS METALS, INC.

(Exact name of registrant as specified in its charter)



|                                               |                           |                                  
|---------------------------------------------- | ------------------------- | ---------------------------------
|Delaware                                       | 000-50703                 | 14-1839426                       
|(State or other jurisdiction of incorporation) | (Commission File  Number) | (IRS Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|6 Glory Lane Sussex, NJ.                 |  | 07461-0326
|(Address of principal executive offices) |  | (Zip Code)



(973) 875-7647

(Registrant's telephone number, including area code)



|                                                                                 |     | 
|-------------------------------------------------------------------------------- | --- | 
|                                                                                 | N/A | 
|(Former name, former address & former fiscal year, if changed since last report)



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



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]  No [X]



APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of March 31, 2006: 31,899,644 shares of Common Stock, $.00001 par value.



Transitional Small Business Disclosure format (check one):  Yes [  ]  No [X]



SEC 2334 (9-05)

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the  form displays a currently valid OMB control number.



i











TABLE OF CONTENTS









PART I  FINANCIAL INFORMATION

1

ITEM 1. FINANCIAL STATEMENTS

1

CONSOLIDATED BALANCE SHEETS

1

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

2

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

3

CONSOLIDATED STATEMENTS OF CASH FLOWS

4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

6

ITEM 3. CONTROLS AND PROCEDURES.

8

PART II OTHER INFORMATION

9

ITEM 1. LEGAL PROCEEDINGS.

9

ITEM 2. UNREGISTERED SALE OF SECURITIES AND USE OF PROCEEDS.

9

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

9

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

9

ITEM 5. OTHER EVENTS OR INFORMATION.

9

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

10

SIGNATURES

11

INDEX TO ATTACHED EXHIBITS

12







i





PART I  FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS





U. S. PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS



|                                                                           |                                                                                              |              |                |            |             |  |  |  |  | 
|-------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------ | -------------- | ---------- | ----------- |  |  |  |  | 
|ASSETS                                                                     |                                                                                              |              |               
|                                                                           | February 28, 2006                                                                            |              | May 31, 2005  
|(Unaudited)                                                                |                                                                                              | (Audited)   
|                                                                           |                                                                                              |             
|Current Assets:                                                            |                                                                                              |              |                |           
|                                                                           | Cash                                                                                         |              | $    897,899   |            | $     4,734
|                                                                           |                                                                                              |              |                |           
|                                                                           | Total current assets                                                                         |              | 897,899        |            | 4,734      
|                                                                           |                                                                                              |              |                |           
|Other Assets:                                                              |                                                                                              |              |                |           
|                                                                           | Investments in mining rights                                                                 |              | 63,598         |            | 63,598     
|                                                                           | Demand loan receivable                                                                       |              | -              |            | 5,000      
|                                                                           |                                                                                              |              |                |           
|                                                                           | Total Assets                                                                                 |              | $    961,497   |            | $   73,332 
|                                                                           |                                                                                              |              |                |           
|                                                                           |                                                                                              |              |                |           
|LIABILITIES AND STOCKHOLDERS EQUITY                                       |                                                                                              |              |                |           
|                                                                           |                                                                                              |              |                |           
|                                                                           |                                                                                              |              |                |           
|Current Liabilities:                                                       |                                                                                              |              |                |           
|                                                                           | Accounts payable                                                                             |              | $        4,835 |            | $   13,226 
|                                                                           | Demand loan payable                                                                          |              | 65,000         |            | -          
|                                                                           |                                                                                              |              |                |            |            
|                                                                           | Total current liabilities                                                                    |              | 69,835         |            | 13,226     
|                                                                           |                                                                                              |              |                |            |            
|Stockholders Equity:                                                      |                                                                                              |              |                |            |            
|Preferred stock:  authorized 10,000,000 shares                             |                                                                                              |              |                |           
|                                                                           | of $.00001 par value; issued and outstanding, none                                           |              |                |            |            
|Common stock:  authorized 100,000,000                                      |                                                                                              |              |                |           
|                                                                           | shares of $.00001 par value; issued and outstanding, 30,806,018 and 26,816,018, respectively |              | 311            |            | 268        
|Additional paid in capital                                                 |                                                                                              | 1,816,551    |                | 814,982   
|Deficit accumulated during exploration stage                               |                                                                                              | (925,200)    |                | (755,144) 
|                                                                           |                                                                                              |              |                |            |            
|                                                                           | Total stockholders equity                                                                   |              | 891,662        |            | 60,106     
|                                                                           |                                                                                              |              |                |            |            
|                                                                           | Total Liabilities and Stockholders Equity                                                   | $    961,497 |                | $   73,332
|                                                                           |                                                                                              |              |                |            |            
|                                                                           |                                                                                              |              |                |            |            
|                                                                          
|                                                                          
|The accompanying notes are an integral part of these financial statements.







1





U. S. PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

ACCUMULATED DURING EXPLORATION STAGE

For the Nine Month Periods Ended February 28

(Unaudited)



|                                  |                                 |            |               |            |                     |  |                           |  | 
|--------------------------------- | ------------------------------- | ---------- | ------------- | ---------- | ------------------- |  | ------------------------- |  | 
|                                  | January 21, 1998               
|                                  |                                 |            |               |            | (Date of Inception)
|                                  |                                 |            | 2006          |            | 2005                |  | To February 28, 2006     
|                                  |                                 |            |               |           
|Revenue                           |                                 |            | $           - |            | $             -     |  | $                       -
|                                  |                                 |            |               |            |                     | 
|Expenses                          |                                 |            | 170,056       |            | 181,785             |  | 925,200                  
|                                  |                                 |            |               |            |                     | 
|Loss accumulated during           |                                 |            |               |            |                    
|                                  | exploration stage               |            | $(170,056)    |            | $(181,785)          |  | $         (925,200)      
|                                  |                                 |            |               |            |                    
|Net Loss Per Share                |                                 |            |               |           
|                                  | Basic and Diluted               |            | $(.01)        |            | $(.01)              | 
|                                  |                                 |            |               |            |                    
|Weighted Average Number of Shares |                                 |            |              
|                                  | Outstanding  Basic and Diluted | 27,098,636 |               | 26,426,459 |                    
|                                  |                                 |            |              









|                                     |                          |            |  |           
|------------------------------------ | ------------------------ | ---------- |  | ----------
|(A) Includes the following expenses: |                          |            | 
|                                     | Professional fees        | $   79,949 |  | $   52,227
|                                     | Salaries                 | 6,838      |  | 20,800    
|                                     | Geology fees             | 22,800     |  | 10,600    
|                                     | Office expenses          | 1,040      |  | 15,692    
|                                     | Consulting fees          | 2,500      |  | 27,000    
|                                     | Licenses and permits     | 5,660      |  | -         
|                                     | Travel and entertainment | -          |  | 27,216    
|                                     | Insurance                | -          |  | 6,750     
|                                     | Auto rental              | 21,867     |  | 13,916    
|                                     | Other expenses           | 29,402     |  | 7,584     
|                                     |                          | $170,056   |  | $181,785  
|                                     |                          |            |  |           







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









2





U. S. PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

ACCUMULATED DURING EXPLORATION STAGE

For the Three Month Periods Ended February 28,

(Unaudited)





| |                                   |                  |  |                 |                      |                      |  | 
| | --------------------------------- | ---------------- |  | --------------- | -------------------- | -------------------- |  | 
| |                                   |                  |  |                 | January 21, 1998    
| |                                   |                  |  |                 | (Date of Inception) 
| |                                   | 2006             |  | 2005            | to February 28, 2006
| |                                   |                  |  |                 |                      |                     
| | Revenue                           | $            -   |  | $             - |                      | $                  -
| |                                   |                  |  |                 |                      |                     
| | Expenses                          | 105,493(A)       |  | 41,790(A)       |                      | 925,200             
| |                                   |                  |  |                 |                      |                     
| | Loss accumulated during           |                  |  |                 |                      |                     
| | exploration stage                 | $  (105,493)     |  | $   (41,790)    |                      | $      (925,200)    
| |                                   |                  |  |                 |                      |                     
| | Net Loss Per Share                |                  |  |                 |                      |                     
| | Basic and Diluted                 | $              - |  | $             - |                      |                     
| |                                   |                  |  |                 |                      |                     
| | Weighted Average Number of Shares |                  |  |                 |                      |                     
| | Outstanding  Basic and Diluted   | 28,411,142       |  | 26,426,670      |                      |                     









|                                    |                          |           |  |         
|----------------------------------- | ------------------------ | --------- |  | --------
|(A) Includes the following expenses |                          |           | 
|                                    | Professional fees        | $  40,880 |  | $  7,449
|                                    | Salaries                 | -         |  | 6,525   
|                                    | Geology fees             | 13,800    |  | 6,600   
|                                    | Office expenses          | -         |  | -       
|                                    | Consulting fees          | -         |  | 3,902   
|                                    | Licenses and permits     | 2,947     |  | -       
|                                    | Travel and entertainment | 184       |  | 9,227   
|                                    | Insurance                | -         |  | 2,062   
|                                    | Auto rental              | 21,867    |  | 4,026   
|                                    | Other expense            | 25,815    |  | 1,999   
|                                    |                          | $105,493  |  | $41,790 
|                                    |                          |           |  |         











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







3





U. S. PRECIOUS METALS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Month Periods Ended February 28,

(Unaudited)



| |                                           |              |  |             |  |                      |  |  |  |  |  |  |  | 
| | ----------------------------------------- | ------------ |  | ----------- |  | -------------------- |  |  |  |  |  |  |  | 
| |                                           |              |  |             |  | January 21, 1998    
| |                                           |              |  |             |  | (Date of Inception) 
| |                                           | 2006         |  | 2005        |  | to February 28, 2006
| |                                           |              |  |             |  |                     
| | Cash Flows From Operations:               |              |  |             |  |                     
| | Net loss                                  | $(170,056)   |  | $(181,785)  |  | $  (925,200)        
| | Charges not requiring the outlay of cash: |              |  |             |  |                     
| | Common stock issued for services          | 9,112        |  | 25,000      |  | 256,862             
| | Changes in assets and liabilities:        |              |  |             |  |                     
| | Increase (decrease) in accounts payable   | (8,391)      |  | 299         |  | 4,835               
| |                                           |              |  |             |  |                     
| | Net Cash Consumed by                      |              |  |             |  |                     
| | Operating Activities                      | (169,335)    |  | (156,486)   |  | (663,503)           
| |                                           |              |  |             |  |                     
| | Cash Flows From Investing Activities:     |              |  |             |  |                     
| | Investments in mining rights              | -            |  | -           |  | (48,598)            
| | Repayment of receivable                   | 5,000        |  | -           |  | -                   
| |                                           |              |  |             |  |                     
| | Net Cash Consumed by                      |              |  |             |  |                     
| | Investing Activities                      | 5,000        |  | -           |  | (48,598)            
| |                                           |              |  |             |  |                     
| | Cash Flows From Financing Activities:     |              |  |             |  |                     
| | Sales of common stock                     | 992,500      |  | 140,000     |  | 1,545,000           
| | Proceeds of demand loans                  | 65,000       |  | -           |  | 65,000              
| | Net Cash Provided by                      |              |  |             |  |                     
| | Financing Activities                      | 1,057,500    |  | 140,000     |  | 1,610,000           
| |                                           |              |  |             |  |                     
| | Net Increase In Cash Balance              | 893,165      |  | (16,486)    |  | 897,899             
| | Cash Balance, Beginning of Period         | 4,734        |  | 23,534      |  | -                   
| | Cash Balance, End of Period               | $    897,899 |  | $     7,048 |  | $    897,899        













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









4





U. S. PRECIOUS METALS, INC.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2006

(Unaudited)





1.

BASIS OF PRESENTATION



The unaudited interim consolidated financial statements of U.S. Precious Metals, Inc. and its subsidiary (the Company) as of February 28, 2006 and for the three and nine month periods ended February 28, 2006 and February 28, 2005, have been prepared in accordance with accounting principals generally accepted in the United States of America.  In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods.  The results of operations for the nine months ended February 28, 2006 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, 2006.



Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading.  The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended May 31, 2005.



2.

SUPPLEMENTARY CASH FLOWS INFORMATION



There was no cash paid for either interest or income taxes during either of the periods presented.



3.

COMMON STOCK



Shares of common stock were issued in private placement offerings during the 2005 period.  A total of 3,970,000 shares were issued, yielding proceeds of $992,500.  These shares were accompanied by  1,985,000 warrants, each permitting the purchase one-half share of common stock at $.50 per share.  These warrants expire 18 months after the date of issuance.  In addition, 91,126 shares of common stock were issued for services, valued at $9,112.



4.

WARRANTS



As of February 28, 2006, there are 5,895,000 warrants available for exercise at $.50 per share through December 31, 2006.  The following table details the warrants for the nine month period ended February 28, 2006.



|                                       |  |          
|-------------------------------------- |  | ---------
|Warrants outstanding May 31, 2005      |  | 3,910,000
|Warrants issued                        |  | 1,985,000
|Warrants exercised                     |  | -        
|Warrants outstanding February 28, 2006 |  | 5,895,000





5.

CONTINGENCY



The Board has authorized the issuance of 2,300,000 preferred shares.  When issued, theses preferred shares would be convertible into 23,000,000 shares of common stock.  There are currently no plans to issue this preferred stock.









5





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION



This section of this report and other parts of this report contain forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this report are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, many of which cannot be predicted or anticipated. The following should be read in conjunction with the unaudited consolidated financial statements of the Company included elsewhere herein.

We are a mineral exploration company. Though our wholly owned Mexican subsidiary, U. S. Precious Metals De Mexico, S.A. DE C.V. We have acquired exploration concessions to certain mineral properties known as "Solidaridad I", "Solidaridad II," Solidaridad IIA, Solidaridad IIB, "Solidaridad III," "Solidaridad IV", and "Solidaridad V" (collectively, the "Solidaridad Properties"). The Solidaridad Properties are located in State of Michoacan, Mexico. The estimated sizes of the properties are as follows:

Solidaridad I - 175 hectares, Solidaridad II - 2,164 hectares, Solidaridad IIA - 1.4 hectares, Solidaridad IIB - 0.1 hectares, Solidaridad III - 294 hectares, Solidaridad IV - 150 hectares and Solidaridad V- 921 hectares.

In February 2006, our Mexican subsidiary claimed a mine concession lot entitled La Sabila with a surface size of approximately 12,987 hectares surrounding the Solidaridad properties in order to protect the future exploration and exploitation of the Solidaridad properties.  The claim has been preliminarily accepted by the Mexican General Director of Mining, written studies have been delivered and formal acceptance from that authority is expected shortly.  If and when formal acceptance is issued, our Mexican subsidiary will control a mine concession cluster area total of approximately 16,400 hectares

In addition, through our Mexican subsidiary, we have agreed to acquire the following mine concessions, subject to successful results of our exploration activities:

|                                              |                 |  |                                                                           | 
|--------------------------------------------- | --------------- |  | ------------------------------------------------------------------------- | 
|NAME                                          | SURFACE         |  | LOCATION                                                                 
|(A) La Provindencia                           | 600.0 hectares  |  | Municipalities of Tzitzio and Nicholas Romero, State of Michoacan, Mexico
|Potential Mineralization:                     | Copper and Gold |  |                                                                          
|                                              |                 |  |                                                                          
|(B) Tajitos Cluster:                          |                 |  |                                                                          
|La Abuncancia                                 | 25 hectares     |  | Caborca, State of Sonora, Mexico                                         
|La Abuncancia II                              | 101 hectares    |  | (approximately 400 meters from Federal Road)                             
|La Abuncancia III                             | 43 Hectares     |  |                                                                           | 
|La Abuncancia IV                              | 25 hectares     |  |                                                                           | 
|Cuatro Hermanos                               | 20 hectares     |  |                                                                           | 
|El Oro Dos                                    | 1 hectare       |  |                                                                           | 
|                                              | 215 hectares    |  |                                                                           | 
|Potential Mineralization:                     | Gold            |  |                                                                           | 
|                                              |                 |  |                                                                           | 
|(C) Ampliacion El Carmen y La Zmorana Cluster |                 |  |                                                                           | 
|El Carmen Fr. 1                               | 364 hectares    |  | Turitaco, State of Michoacan,                                            
|La Zamorana Fr.1                              | 228 hectares    |  |                                                                           | 
|La Zamorana Fr.2                              | 23 hectares     |  |                                                                           | 
|                                              | 615 hectares    |  |                                                                           | 
|Potential Mineralization:                     | Gold            |  |                                                                           | 
|                                              |                 |  |                                                                           | 
|                                              |                 |  |                                                                           | 

A hectare is equivalent to 2.47 acres. We have also received mining reports on the Solidaridad I property from two geologists who performed limited geological work on the Solidaridad I property. At the time of their respective reports, both geologists were independent, however, subsequent to his report, we appointed Dr. Gerald Harper to our Board



6





of Directors. There are no known bodies of ore on the property that we have concessioned. Our plan of operation is to raise funds to carry out further exploration on the Solidaridad Properties with the objective of establishing ore of commercial tonnage and grade.

The following summarizes our cash raising activities since May 2003. We have had no other sources of capital during that time and have only suffered losses since our inception on January 28, 1998. In May 2003, the Company completed a private placement of its common stock pursuant to which it sold 5,000,000 units at $0.025 per unit to a total of 17 accredited investors and received $125,000 in gross proceeds. In November 2003, the Company completed a private placement of its common stock pursuant to which it sold 1,600,000 units at $0.10 per unit to a total of 13 accredited investors and received $160,000 in gross proceeds. From January 2004 through May 31, 2004, the Company completed a private placement of its common stock pursuant to which it sold 360,000 units at $0.25 per unit to a total of 8 accredited investors and received $90,000 in gross proceeds. Each unit for the above offerings consisted of one share of common stock and on half of a warrant. The warrant is exercisable at $0.50 per share and its exercise period has been extended to expire on December 31, 2006.

During the year ended May 31, 2005, the Company sold a total of 860,000 units in a private placement offering in which the Company received $ 177,500 in gross proceeds. Each unit consisted of one share of common stock and a stock purchase warrant to acquire one-half of a share of common stock. The exercise price per whole share is $.50 per share, and these  warrants have also been extended to expire on December 31, 2006.

During our first quarter ended August 31, 2005, we raised an additional $15,000 from the sale of one and one half units to two accredited investors. Each unit consisted of 40,000 shares of common stock and stock purchase warrants to acquire an additional 20,000 shares of common stock. The warrants expire  on December 31, 2006 and are exercisable at $0.50 per share. During the quarter ended the second quarter ending.

November 30, 2005, we did not raise additional funds from the sale of our securities. However, we borrowed, on a demand basis,$45,000 from a company certain of whose officers are also officers and directors of our company. During our third quarter ending February 28, 2006 (the period covered by this Report of Form 10QSB),  we borrowed an additional $20,000 from the same affiliated lender also on a demand basis. Also during this quarter, we raised $977,500 from the sale of 48.875 units to 45 accredited investors.Each unit consisted of 80,000 shares of our common stock and stock purchase warrants to acquire an additional 40,000 shares of common stock.  The warrants expire 18 months from issuance and are exercisable at $0.50 per share. Because of our lack of working capital, during the quarter ending February 28, 2006 we did a minimum of exploration activity. In this regard, during this quarter, this exploration activity did result in the discovery of an estimated significant gold mineralization at our La Sabila project in  Michoacan, Mexico. Our currents plan of operation had been put on hold, pending our obtaining additional financing, through the sale of our securities. We have been successful in obtaining what we believe to be such adequate financing in the quarter that is the subject of the is report. Our cash requirements for the next 12 months are estimated to be $1,000,000, of which $460,000 is allocated for additional exploration on the Solidaridad I property, $250,000 for exploration on the other Solidaridad Properties other than Solidaridad I, $150,000 for exploration of other claims in the region, and $140,000 for general and administrative costs, each as described below.

The projected exploration on the Solidaridad I property will consist of preliminary ground exploration work and exploratory drilling. The preliminary ground exploration will entail detailed geological mapping, soil sampling, and channel sampling of road cuts to delineate mineralization, if any. This preliminary work will be followed by a combination of reverse circulation rotary and diamond depth of drilling currently cannot be determined, it is anticipated that initial holes will total 150 to 300 meters in depth. Based on existing data, we expect to core drilling to test the grade, thickness, and continuity of mineralization, if any, determined or identified by the preliminary ground exploration. While the drill approximately 40-60 exploratory holes; however, the actual number will be dependent upon the results of preliminary exploratory work, results of prior drill holes, and our available working capital. We will also assay sampling and core hole results for gold, copper, and silver.

Exploratory work on the other Solidaridad claims will seek to identify and drill test for gold mineralization in a manner similar to the Solidaridad I claim. This work will include geological mapping, geochemical sampling (drainage samples, soil samples, and rock-chip samples), possibly geophysical methods, and exploratory drilling.

Regional exploration around the Solidaridad claims will consist of geological prospecting including rock chip and drainage sampling, examination of satellite imagery that we purchase, and evaluation of known mineral prospects.



When our plan of operation is resumed, we anticipate general and administrative costs to include travel expenditures to Mexico for our officers and consultants estimated to be $20,000; salaries to employees consisting of salaries to our vice president and a field geologist in Mexico estimated to be $60,000; legal and professional fees, including legal fees for local counsel in Mexico estimated to be $40,000; regulatory work in Mexico estimated to be $10,000, and office supplies and expenses estimated to be $10,000.

We are seeking to raise a minimum of $1,000,000 in the next 12 months to support our working capital needs as described above. The funds may be procured through the public or private offering of our equity securities including the exercise of the warrants that we have outstanding. We believe that debt financing is not a funding alternative at this time due to our lack of cash flow. We have entered into discussions with a number of investors concerning an investment in our Company; however, at this time, it has not received commitments from any source, and has no firm arrangements in place for our required funding. The Company cannot predict whether it will be successful in raising any capital.

We have no material commitments for capital at this time other than as described above. In addition, we do not expect to incur research and development costs within the next 12 months. If we are successful in raising the estimated $1,000,000, management believes that that our exploratory programs can be completed within 12 months from funding. If we are able to raise part but not all of the $1,000,000, we will prioritize the allocation of such funds towards the exploration of the Solidaridad I property discussed above, along with the payment of salaries for the two personnel and other administrative costs described above. Thereafter, any additional funds will be allocated for exploration of the other Solidaridad Properties, followed by regional exploration. If we are unable to raise any funds, we will be unable to complete our plan of operation.

Exploration for minerals is a speculative venture involving substantial risk. There is no certainty that the expenditures that we may make in the exploration for gold and other minerals will result in discoveries of commercial quantities of ore. Hazards such as unusual or unexpected formations and other conditions are involved in mineral exploration and development. Consequently, we cannot predict whether it will be successful in establishing a "commercial quantity" of ore for the Solidaridad Properties. A "commercial quantity" of ore is a quantity of ore which is sufficient to economically justify commercial exploitation. In determining whether a body of ore economically justifies exploitation, we will assess those factors which impact the economics of production of the Solidaridad Properties, including prevailing metal prices, the grade (or metal content) of the ore, mining and processing costs, cost of capital, environmental compliance costs, and general economic conditions.

If we are successful in establishing a commercial quantity of ore on the Solidaridad Proprieties, our present intention is not to engage in actual mining operations. Rather, we expect to sell the properties to a mining company, or enter into a joint venture with a mining company to conduct actual mining operations on the property. We have no such arrangements at this time.

Off-Balance Sheet Arrangements. During the three, six and nine months ended February 28, 2006, the Company did not engage in any off-balance sheet arrangements as defined in Item 303(c) of the SEC's Regulation S-B.

ITEM 3. CONTROLS AND PROCEDURES.





A review and evaluation was performed by the Company's Chief Executive Officer (the "CEO") and its Chief Financial Officer (the "CFO"), of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that review and evaluation, these officers have concluded that the Company's current disclosure controls and procedures, as designed and implemented, were effective. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls subsequent to the date of their evaluation. There were no significant material weaknesses identified in the course of such review and evaluation and, therefore, the Company took no corrective measures.

















PART II OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS.

None

ITEM 2. UNREGISTERED SALE OF SECURITIES AND USE OF PROCEEDS.

During the three month period ended February 28, 2006, the Company raised $977,500 from the sale of 48.875 units to 45 accredited investors. Each unit consisted of 80,000 shares of our common stock and stock purchase warrants to acquire an additional 40,000 shares of common stock.  The warrants expire 18 months from issuance and are exercisable at $0.50 per share. In addition, we authorized the issuance 2.3 million shares of preferred stock to three of our officers and directors for services previously rendered as follows: 1,000,000 each to Peter Toscano and Jack Wagenti and 300,000 to Jose Garcia. The shares, if any when issued, will be valued at $.00001 per share and will be convertible into common stock shares at the rate of 10 shares of common for one share of preferred stock in the event of a hostile takeover attempt. To date, the shares have not been issued.

The securities issuances referred to above were exempt from registration pursuant to Section 3(b) and 4(2) of the Securities Act of 1933, as amended (the "Act"), including Rule 506 of Regulation D promulgated under the Act. Furthermore, each recipient who purchased their securities was an "accredited investor" as defined under Regulation D, and represented his or her intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and, appropriate legends were affixed to the share certificates issued in such transactions. No advertisement or general solicitation was used in connection with any offer or sale of such securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

ITEM 5. OTHER EVENTS OR INFORMATION.

On March 23, 2004, prior to the Registrant becoming subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, on June 23, 2004, the Registrants wholly owned Mexican subsidiary,  U.S. Precious Metals De Mexico, S.A. DE C.V., entered into an agreement whereby it acquired the exclusive five year rights to conduct exploration and mining activities in Sonora , Mexico. In consideration of obtaining said rights the subsidiary agreed to pay the seller was 3% of the value of the production resulting from mining activities, or, at the option of the seller, a to be  agreed upon number of shares of  the Registrant. This agreement was inadvertently omitted as an exhibit from prior filings of the Registrant and is included herein as Exhibit 10.1.



On April 19, 2006, the Registrant affirmed an agreement that its subsidiary entered into to acquire mining concessions on approximately 615 hectares in the State of Michoacan, Mexico, known as the Ampliacion El Carmen y La Zmorana Cluster.  The agreement is subject to successful results of the subsidiarys exploration program, and is attached herein as Exhibit 10.2.



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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.



(a). Furnish the Exhibits required by Item 601 of Regulation S-B.



Exhibit 10.1 - Buy-Selling Promise Private Agreement to Acquire the Concession Rights of  Mining Lots between Registrants wholly owned subsidiary, U.S. Precious Metals De Mexico, S.A. DE C.V. (Buyer) and Antonio Baduy Gonzalez (Seller) [English translation].



Exhibit 10.2 -  Mining Concession Agreement; Re: Approximately 615 hectares know as the Ampliacion El Carmen y La Zmorana Cluster. [English translation]



Exhibit 31.1 - Certification Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a), Toscano



Exhibit 31.2 - Certification Principal Financial Officer required by Rule 13a- 14(a) or Rule 15d-14(a), Wagenti



Exhibit 32.1 - Certification Required by Rule 13a-14(b) or Rule 15d-14(b) and

Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Toscano



Exhibit 32.2 - Certification Required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Wagenti

(b) Reports on Form 8-K.

There were three reports on Form 8-K filed by the Company during the last quarter of the period covered by this Form 10K-SB (i.e. the quarter ending February 28, 2006).



The reports on form 8-K are as follows:



·

Announcement of the February 6, 2006 resignation of directors, William Matlack and Gerald Harper, both for personal reasons, and the appointment of president, Peter Toscano  as the temporary Chairman of the Board (filed on February 6, 2006).

·

Announcement of the Companys Board of Directors appointment of James ORourke as  its president replacing Peter Toscano, who was then appointed as the permanent Chairman of the Board. A February 9, 2006 press release announcing the same appointment was incorporated by reference and attached as an exhibit to this report on form 8-K.  (inadvertently duplicate filed on February 10, 2006 and February 14, 2006).

·

Announcement of the Company issuing a February 14, 2006 press release announcing the discovery of estimated significant gold mineralization in its La Sabila project in Michoacan, Mexico, and the previous acquisition of an option on exploration properties in Sonora, Mexico. The press release was incorporated by reference and attached as an exhibit to this report on form 8-K.  (filed on February 15, 2006).



























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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: April 19, 2006

U.S. Precious Metals, Inc.

|                                                                           | 
|-------------------------------------------------------------------------- | 
|                                                                          
|/s/Jack Wagenti                                                            | 
|Jack Wagenti                                                               | 
|(Vice President, Chief Executive Officer and  Principal Financial Officer) | 















INDEX TO ATTACHED EXHIBITS



Exhibit 10.1 - Buy-Selling Promise Private Agreement to Acquire the Concession Rights of  Mining Lots



Exhibit 31.1 - Certification Chief Executive Officer and Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a), Wagenti



Exhibit 32.1 - Certification Required by Rule 13a-14(b) or Rule 15d-14(b) and

Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, Wagenti





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