- Listing on the TSX is consistent with company's choice of Toronto as an ideal location from which to build a dynamic mining company
- Plans first gold pour from expansion of California mining property in April 2008 with annual production of 165,000 ounces
Toronto, Ontario, August 28, 2006 - Gold producer Western Goldfields, Inc. (TSX: WGI, OTC BB: WGDF.OB) today announced that its shares of common stock have commenced trading on the Toronto Stock Exchange under the symbol WGI.
"The listing of Western Goldfields' shares for trading on the Toronto Stock Exchange, one of the world's premier markets for resource stocks, is an exciting step in the development of our company," said Mr. Randall Oliphant, Chairman of Western Goldfields.
"We expect that listing on the TSX will improve the liquidity in the trading of our shares. The decision to list on the TSX is consistent with our decision to move the company's principal executive office from Reno, Nevada to Toronto. Toronto has been shown time and again to be an ideal place from which to build a dynamic mining company," Mr. Oliphant added.
"The recently completed Feasibility Study on the expansion of our operations at the Mesquite Mine confirmed our enthusiasm for the potential of this exceptional property," remarked Mr. Raymond W. Threlkeld, President and Chief Executive Officer, Western Goldfields.
The Feasibility Study indicated proven and probable reserves of 2.36 million ounces of gold and measured and indicated resources of 1.25 million ounces (1). The company estimates average annual production of 165,000 ounces, beginning in April 2008, with an initial project life of 9 ½ years. "This is a unique gold mining opportunity, in that it is a fully permitted, multi-million ounce reserve in a politically safe location. We believe that there is excellent potential to increase the resources beyond the current estimates," continued Mr. Threlkeld.
These estimates are summarized in the Appendix to this press release.
On a 100 percent equity financing basis, the Feasibility Study projects after-tax rates of return on the mine's expansion ranging from 16 percent with gold at US$500 per ounce to 30 percent at a gold price of US$600 per ounce, and 41 percent if gold is US$700 per ounce.
"The Mesquite Mine, located in Imperial County, California, should form a very solid and profitable foundation on which we can create increasing value for the shareholders of Western Goldfields," said Mr. Oliphant. "We also intend to pursue additional consolidation opportunities that are emerging in our resource industry, particularly in North America."
Western Goldfields acquired the Mesquite property in 2003 from Newmont Mining Corporation. Newmont Mining had ceased operations of the mine in 2001 as the low gold prices at that time did not support expansion plans. Western Goldfields has continued producing gold from ore placed on heaps by the previous owners, and expects gold production in 2006 to be about 14,000 ounces.
Western Goldfields, Inc.
Under a new, highly experienced, and dynamic management team, Western Goldfields is a gold producer focused on completing the expansion of its Mesquite Mine, located in Imperial County, California, and returning the mine to full production. The company will pursue other precious metals opportunities, mainly in North America. The company currently has 67,780,801 common shares issued and outstanding and 111,367,681 shares of common stock on a fully diluted basis. For further details, please visit the company's website at www.westerngoldfields.com.
(1) Resource estimates are exclusive of Mineral Reserves. Cautionary note to U.S. investors concerning Measured, Indicated, and Inferred mineral resources: These terms are required by the CIM's "Standards on Mineral Resources and Reserves, Definition and Guidelines". U.S. investors are cautioned not to assume that all or any part of the stated mineral resources will be converted into reserves. Reference is made to the Press Release of the company issued on August 9, 2006 for additional information regarding the Feasibility Study and mineral resource and reserve estimates regarding the Mesquite Mine.
Forward-Looking Information
Certain statements contained in this news release and subsequent oral statements made by and on behalf of the company may contain forward-looking information within the meaning of the United States Private Securities Litigation reform Act of 1995. Such forward-looking statements are identified by words such as "intends", "anticipates", "believes", "expects", and "hopes" and include, without limitation, statements regarding the company's plan of business operations, potential contractual arrangements, receipt of working capital, anticipated revenues, and related expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, those set forth in the company's Annual Report on Form 10-KSB for the year ended December 31, 2005 filed with the U.S. Securities and Exchange Commission, under the caption, "Risk Factors". Most of these factors are outside the control of the company. Investors are cautioned not to put undue reliance on forward-looking statements. Except as otherwise required by applicable securities statutes or regulation, the company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.
For further information, please contact:
Raymond W. Threlkeld
President and Chief Executive Officer
(416)-324-6005
rthrelkeld@westerngoldfields.com
or
Brian Penny
Chief Financial Officer
(416)-324-6002
bpenny@westerngoldfields.com
or
Richard Wertheim
Investor and Media Relations
Wertheim + Company Inc.
(416)-594-1600
wertheim@wertheim.ca
APPENDIX
MESQUITE MINE
Mineral Resources and Reserves
August 1, 2006
------------------------------------------------------------------------
Mineral Resources Inclusive of Reserves
-----------------------------------------------------------------------
Classification Category Tons Grade Contained
(x 1,000) (Au oz/T) (Au ozs)
-----------------------------------------------------------------------
Measured Oxide 73,355 0.016 1,188,000
Non-oxide 19,591 0.024 470,000
-----------------------------------------------------------------------
Measured Subtotal 92,946 0.018 1,658,000
-----------------------------------------------------------------------
Indicated Oxide 82,611 0.016 1,338,000
Non-oxide 26,338 0.022 566,000
-----------------------------------------------------------------------
Indicated Subtotal 108,949 0.017 1,904,000
-----------------------------------------------------------------------
M&I TOTAL 201,895 0.018 3,562,000
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Mineral Reserves
-----------------------------------------------------------------------
Classification Category Tons Grade Contained
(x 1,000) (Au oz/T) (Au ozs)
-----------------------------------------------------------------------
Proven Oxide 55,923 0.017 923,000
Non-oxide 12,749 0.024 306,000
-----------------------------------------------------------------------
Proven Subtotal 68,672 0.018 1,229,000
-----------------------------------------------------------------------
Probable Oxide 52,589 0.017 910,000
Non-oxide 9,647 0.023 222,000
-----------------------------------------------------------------------
Probable Subtotal 62,236 0.018 1,132,000
-----------------------------------------------------------------------
P&P TOTAL 130,908 0.018 2,361,000
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Mineral Resources Exclusive of Reserves
-----------------------------------------------------------------------
Classification Category Tons Grade Contained
(x 1,000) (Au oz/T) (Au ozs)
-----------------------------------------------------------------------
Measured Oxide 18,767 0.015 274,000
Non-oxide 7,484 0.023 174,000
-----------------------------------------------------------------------
Measured Subtotal 26,251 0.017 448,000
-----------------------------------------------------------------------
Indicated Oxide 31,019 0.015 453,000
Non-oxide 17,101 0.021 351,000
-----------------------------------------------------------------------
Indicated Subtotal 48,120 0.017 804,000
-----------------------------------------------------------------------
M&I TOTAL 74,371 0.017 1,252,000
-----------------------------------------------------------------------
1. The Company's mineral reserves are estimated using appropriate
cut-off grades at an assumed gold price of US$ 450 per ounce and
projected process recoveries, operating costs and life of mine
plans which include allowances for dilution and mining recovery.
2. The Company's mineral reserves are consistent with the definitions
established by Industry Guide 7, administered by the U.S.
Securities and Exchange Commission.
3. The Company's mineral resources are estimated using appropriate
cut-off grades at an assumed gold price of US$ 500 per ounce,
projected process recoveries, operating costs and mine plans which
include allowances for dilution and mining recovery.
4. The Company's mineral resources and mineral reserves are classified
in accordance with the Canadian Institute of Mining, Metallurgy and
Petroleum's (CIM) "Standards on Mineral Resources and Reserves,
Definitions and Guidelines".
5. Cautionary note to U.S. investors concerning Measured, Indicated
and Inferred mineral resources: These terms are required by the
CIM's "Standards on Mineral Resources and Reserves, Definitions and
Guidelines". Mineral resources that are not mineral reserves do not
have demonstrated economic viability. U.S. Investors are cautioned
not to assume that all or any part of the stated mineral resources
will be converted into reserves.
6. The Company's mineral resource and reserve estimates were prepared
under the supervision of Mr. M. Hester, FAusIMM, Vice President,
Independent Mining Consultants Inc., Tucson Arizona, who qualifies
as an independent Qualified Person under Canadian Securities
legislation.
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