- Mesquite Mine is a rare permitted multi-million ounce U.S. gold reserve, one of only a handful of such opportunities in the United States
- Proven and Probable reserves of 2.36 million ounces of gold and Measured and Indicated resources of 1.25 million ounces1
- Average annual production of 165,000 ounces of gold planned commencing April 2008
- Company recently listed on the Toronto Stock Exchange
Toronto, Canada, September 22, 2006 -- Western Goldfields, Inc. (TSX:WGI, OTC BB:WGDF.OB) today announced the commencement of a major 70,000-foot reverse circulation drilling program, designed to expand the non-oxide mineral resource base at its Mesquite Mine in Imperial County, California. The drilling program is consistent with Western Goldfields' decision to proceed quickly with bringing this exceptional gold mining opportunity into production by April 2008. 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.
Initial test work from the Mesquite Vista pit non-oxides conducted by Newmont Metallurgical Services indicated a recovery of gold in concentrate of more than 80 percent, suggesting excellent potential for enhanced gold recovery from a gravity and flotation circuit program. Samples from the drilling program also will be used for further metallurgical test work to optimize gold recovery going forward. The Layne Christensen Company of Chandler, Arizona, is conducting the reverse circulation drilling program.
"After reviewing the geologic database supporting the reserve estimate described in the recent Feasibility Study, it is apparent that many of the drill holes in the mine area stopped in mineralized non-oxide material," said Mr. Raymond W. Threlkeld, President and Chief Executive Officer. "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 potential to increase resources appears excellent. Mesquite is already permitted for development which will make it possible to expand our production in a remarkably short time."
Western Goldfields announced the findings of the Feasibility Study in a news release on August 9, 2006, and the results can be found on Western Goldfields' website. The resource and reserve estimates are summarized in the Appendix to this news release.
"The Mesquite Mine is a unique gold mining opportunity, in that it is a fully permitted, multi-million ounce reserve in a politically safe location -- one of only a handful of major deposits owned by an independent company in the United States," said Mr. Randall Oliphant, Chairman, Western Goldfields. "The Mesquite Mine should form a very solid and profitable foundation on which we can create increasing value for the shareholders of Western Goldfields. We also intend to pursue additional precious metals opportunities that are emerging in our industry, particularly in North America," added Mr. Oliphant.
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 originally operated the mine until 2001 when it ceased production, 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. recently began trading on the Toronto Stock Exchange under the symbol WGI. The Company currently has 69,187,051 common shares issued and outstanding and 111,369,230 shares of common stock on a fully diluted basis.
For further details, please visit www.westerngoldfields.com, or contact:
Raymond W. Threlkeld
President and Chief Executive Officer
(416)-324-6005
rthrelkeld@westerngoldfields.com
Brian Penny
Chief Financial Officer
(416)-324-6002
bpenny@westerngoldfields.com
Richard Wertheim
Investor and Media Relations
Wertheim + Company Inc.
(416)-594-1600
wertheim@wertheim.ca
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 Company's news release 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 and equivalent 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, drilling program, 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.
APPENDIX
MESQUITE MINE
Mineral Resources and Reserves
August 1, 2006
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Mineral Resources Inclusive of Reserves
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Classification Category Tons Grade Contained
(x 1,000) (Au oz/T) (Au ozs)
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Measured Oxide 73,355 0.016 1,188,000
Non-oxide 19,591 0.024 470,000
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Measured Subtotal 92,946 0.018 1,658,000
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Indicated Oxide 82,611 0.016 1,338,000
Non-oxide 26,338 0.022 566,000
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Indicated Subtotal 108,949 0.017 1,904,000
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M&I TOTAL 201,895 0.018 3,562,000
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Mineral Reserves
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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
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Proven Subtotal 68,672 0.018 1,229,000
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Probable Oxide 52,589 0.017 910,000
Non-oxide 9,647 0.023 222,000
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Probable Subtotal 62,236 0.018 1,132,000
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P&P TOTAL 130,908 0.018 2,361,000
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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
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Measured Subtotal 26,251 0.017 448,000
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Indicated Oxide 31,019 0.015 453,000
Non-oxide 17,101 0.021 351,000
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Indicated Subtotal 48,120 0.017 804,000
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M&I TOTAL 74,371 0.017 1,252,000
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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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