RENO, Nev., Jan. 20, 2005 (PRIMEZONE) -- Western Goldfields, Inc. (OTCBB:WGDF) has completed an additional scoping study that reviews opportunities for new mining at its 100%-owned Mesquite Gold Mine in southern California.
In its Technical Report completed to Canadian National Instrument 43-101 standards, Mine Development Associates (MDA) reported in situ mineralized material containing approximately 42.9 million tons averaging 0.021 ounces of gold per ton in four extensions to the Mesquite pits. Total costs, including capital, were estimated at approximately $300 per ounce.
The MDA mine plan, which is based on Newmont Mining Company's internal plan using a gold price of $325 per ounce, was projected to generate approximately $20 million cash flow after repayment of capital. The same plan using a gold price of $400 per ounce projected cash flow after capital repayment of approximately $75 million.
Western Goldfields has recently completed a further study reviewing the impact of higher gold prices. In summary, the Company estimates that the mineable resource expands to approximately 90 million tons grading 0.018 ounces per ton at a gold price of $400 and to more than 116 million tons grading 0.016 ounces per ton at a gold price of $450 per ounce. Total costs, including capital, are expected to be less than $325 per ounce.
These numbers exclude the high grade structures that the Company has identified and which it believes have the potential to substantially enhance the grade, increase production and lower costs.
In separate news, Western Goldfields is pleased to report that it has engaged Research Capital Corporation, a Toronto-based integrated investment bank, to act as its agent for a private placement of up to US$5 million to fund completion of a feasibility study at Mesquite and other expenses to prepare Mesquite for new mine production in 2005, and for general corporate purposes.
Toby Mancuso, President, commented, "We are making tremendous strides in our analysis of the large volume of data at Mesquite. This latest work program further enhances our plan to expand production at Mesquite to at least 100,000 ounces per year. We are excited to be working with the Research Capital team that understands the excellent opportunity at Mesquite so well."
About Western Goldfields
Western Goldfields acquired the Mesquite Gold Mine in southern California in 2003. The mine produced approximately three million ounces of gold from its inception in 1986. Western Goldfields is focused on expanding Mesquite within existing operation permits, exploring for extensions of high-grade mineralization at depth, and optimizing current production from the material already stacked on the heap leach pads. The Company also holds exclusive exploration and development rights to the Cahuilla gold project in Southern California, as well as a portfolio of exploration properties in Nevada and throughout the western United States. Certain information contained in this news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the safe harbor created by such sections. However, such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from such forward-looking statements. For a discussion of such risks, uncertainties and other factors, please see "Risk Factors" in our Registration Statement on Form SB-2. The Company disclaims any intent or obligation to update publicly any forward-looking statements set forth herein, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.