- Results at the Brownie Hill Zone indicate the potential to increase reserves and add mine life at Mesquite Mine
- Significant results at Brownie Hill include oxide mineralization of 0.036 ounces per ton of gold over 230 feet in drill hole WM08 and 0.025 ounces per ton of gold over 300 feet in drill hole WM07, significantly higher than the average oxide reserve grade of 0.017 ounces per ton at Mesquite
- Company plans a first quarter 2007 announcement updating the Mesquite Mine's reserves and resources
Toronto, Ontario, December 13, 2006 -- Western Goldfields, Inc. (TSX:WGI, OTC BB:WGDF.OB) today announced positive initial results from exploration drilling underway at its wholly owned Mesquite Mine in Imperial County, California. The initial results include oxide intercepts of 0.036 ounces per ton of gold over 230 feet and 0.025 ounces per ton of gold over 300 feet at the Brownie Hill Zone. The Brownie Hill Zone is a largely inferred mineral resource that was not included in the Company's current mine plan for resumption of mining activity at Mesquite.
"The initial results of this exploration drilling further support our view of the Mesquite Mine as a unique and outstanding opportunity in the gold mining industry. Confirming the potential for additional resources in the Brownie Hill Zone will further add to the value of our property and our company," said Raymond Threlkeld, President and Chief Executive Officer.
"The initial drill results confirm Brownie Hill as a high-priority target with excellent potential to increase the oxide reserves and resources at Mesquite," continued Mr. Threlkeld. "We are planning to drill additional holes to upgrade this resource." On August 9, 2006, Western Goldfields announced that the Mesquite Mine's Proven and Probable reserves are estimated at 2.36 million ounces of gold and Measured and Indicated resources are estimated at 1.25 million ounces. The average grade of the currently defined oxide reserve is 0.017 ounces per ton of gold. The Company is estimating average annual production of 165,000 ounces of gold from the mine, with an initial project life of 9-1/2 years.
The initial results of the current 70,000-foot reverse circulation drilling program include seven holes (WM07 through WM14, with assays pending for WM12) targeting the Brownie Hill Zone, an area of predominantly oxide mineralization located approximately 1,000 feet to the west of the Mesquite Mine's planned Big Chief pit expansion. Drilling to date at Brownie Hill has outlined oxide mineralization measuring 1,300 feet in length by 700 feet in width with an average thickness of 250 feet. The mineralization remains open along strike.
These results indicate that the Brownie Hill Zone has the potential to add life to the Mesquite Mine. Approximately 10,800 feet of the 70,000-foot drilling program, which was announced on September 22, 2006, has been completed to date. A second drill arrived at site in early December.
The Company also has received analyses from metallurgical sample drilling in the Rainbow extension. Drill holes WM01 to WM04 were drilled earlier in the year within the current reserve of the East Rainbow pit to confirm grades, the oxide and non-oxide boundary, and metallurgical recoveries estimated by the resource model. The four holes show slight increases in gold grade compared with the resulting reserve grade estimated for the Rainbow deposit.
Drill holes WM05 and WM06 were drilled as condemnation holes to confirm that the planned location of a waste dump external to the Big Chief pit was properly situated. Assays for holes WM05 and WM06 are pending at the time of this release.
Analyses for holes WM01 through WM04 were completed by ALS Chemex (Vancouver, BC, Canada), an ISO 9001:2000 certified laboratory. Analyses for holes WM07 through WM14 were performed by American Assay Laboratories, Inc. (Reno, Nevada, USA), an ISO/IEC 17025 certified laboratory. Samples for holes WM05 and WM06 are being analyzed by American Assay Laboratories.
The data contained in this news release has been reviewed by Wes Hanson, P.Geo., Vice President of Mine Development, Western Goldfields, and the Qualified Person for the project. A complete table of the drill results is included in the appendix to this release.
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. Western Goldfields acquired the Mesquite property in 2003 from Newmont Mining Corporation. Newmont operated the mine until 2001 when it ceased operations, as the low gold prices at that time did not support expansion plans. However, Newmont continued the permitting process for expansion, and the permits were approved in 2002. 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. is listed on the Toronto Stock Exchange and trades under the symbol WGI, and is quoted on the OTCBB under the symbol WGDF.OB. For further details regarding the mineral reserves and mineral resources at Mesquite, please visit www.westerngoldfields.com.
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 and similar Canadian legislation. 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, timing and costs to recommence commercial production, economic viability of the Mesquite Mine, financing options, including entering into a debt financing arrangement, and the consequences thereof, potential contractual arrangements, receipt of working capital, anticipated revenues, exercise of outstanding warrants, and capital and operating 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.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated and Inferred Resources
This press release uses the terms "measured", "indicated" and "inferred" mineral resources. United States investors are advised that while such terms are recognized by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. United States investors are cautioned not to assume that all or any part of mineral resources will ever be converted into mineral reserves. Inferred mineral resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever by upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.
For further details, please visit www.westerngoldfields.com, or contact:
Raymond Threlkeld - President and Chief Executive Officer
(416)-324-6005
rthrelkeld@westerngoldfields.com
Julie Taylor Pantziris - Director, Regulatory Affairs and Investor Relations
(416)-324-6015
jtaylor@westerngoldfields.com
Richard Wertheim
Investor and Media Relations
Wertheim + Company Inc.
(416)-594-1600
wertheim@wertheim.ca
APPENDIX
MESQUITE MINE
Initial Drilling Results
December 13, 2006
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Intersection Assay
Hole Target Horizon From To Interval Gold
Number (feet) (feet) (feet) (oz/T)
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WM01 E Rainbow Oxide 394.5 524.4 129.9 0.025
Non-oxide 524.4 605.0 80.6 0.018
660.0 675.0 15.0 0.038
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WM02 E Rainbow Oxide 359.0 500.0 141.0 0.028
Non-oxide 500.0 605.0 105.0 0.028
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WM03 E Rainbow Oxide 315.0 505.0 190.0 0.021
Non-oxide 505.0 545.0 40.0 0.015
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WM04 E Rainbow Oxide 340.0 470.0 130.0 0.029
Non-oxide 470.0 565.0 95.0 0.022
605.0 615.0 10.0 0.023
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WM05 Big Chief Condemnation Assays Pending
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WM06 Big Chief Condemnation Assays Pending
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WM07 Brownie Hill Oxide 300.0 600.0 300.0 0.025
Non-oxide 600.0 780.0 180.0 0.013
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WM08 Brownie Hill Oxide 300.0 530.0 230.0 0.036
Non-oxide 530.0 760.0 230.0 0.015
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WM09 Brownie Hill Oxide 340.0 570.0 230.0 0.016
Non-oxide 570.0 665.0 95.0 0.016
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WM10 Brownie Hill Oxide 300.0 610.0 310.0 0.014
Non-oxide 610.0 790.0 180.0 0.014
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WM11 Brownie Hill Oxide 300.0 625.0 325.0 0.022
Non-oxide 625.0 795.0 170.0 0.012
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WM12 Brownie Hill Assays Pending
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WM13 Brownie Hill Oxide 300.0 360.0 60.0 0.007
Non-oxide 390.0 440.0 50.0 0.015
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WM14 Brownie Hill Oxide 330.0 440.0 110.0 0.015
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