TORONTO, April 20, 2006 (PRIMEZONE) -- Western Goldfields, Inc. (OTCBB:WGDF), is pleased to announce the results from a NI 43-101 compliant resource report for the Mesquite Mine located in Imperial County, California. Independent Mining Consultants, Inc. ("IMC"), of Tucson, Arizona prepared the report in accordance with Canadian NI 43-101.
The Mesquite Mine was operated between 1985 and 2001 by Goldfields Mining Corporation, Santa Fe Pacific Minerals Corporation and finally Newmont Mining Corporation ("Newmont"), who closed the mine in 2001 due to low gold prices and unfavorable economics to proceed with an expansion. At the time of closure, Newmont continued the permitting process for a mine expansion. The expansion permit was approved on July 16, 2002, but due to low gold prices Newmont elected not to reactivate mining at Mesquite.
Western Goldfields, Inc acquired the mine in 2003 and has continued to produce gold from ore placed on heaps by the previous owners. Gold production in 2006 is expected to be 17,000 ounces.
The mine site is permitted, subject to further habitat replacement costs and bonding. Current activity at the mine includes the engineering of the permitted heap leach pad expansion by Vector Colorado, LLC. Micon International Limited has been chosen as the manager for the preparation of a feasibility study to be completed mid year 2006.
The current mineral resources lie within, adjacent to and below the mined open pits known as Big Chief, North Big Chief, Cholla, Vista and Rainbow. The updated measured and indicated resources total 201,895,000 tons at an average grade of 0.018 ounces per ton estimated to contain 3,500,000 ounces of gold. The updated measured, indicated, and inferred resources are included in the attached table.
The mineral resource estimated was tabulated within a floating cone at a $500 gold price. The oxide resource cut-off grade is 0.006 oz/ton and 0.012 oz/ton for non-oxide. Oxide and non-oxide recoveries are based on over 150,000,000 tons of past mining and heap leach production, column leach tests and bottle roll tests. Heap leach oxide recovery is estimated at 75% and heap leach non-oxide recovery at 35%.
Non-oxide classification was based on a combination of geological observation and analytical tests developed by the previous owners. The data base consists of over 6,200 holes drilled between 1982 and 2001.
An internally generated scoping study was completed concurrent with the revised resource estimates on the oxide resources only. The results of this study estimate expansion capital expenditures at $71,700,000. In addition, we estimate life of mine sustaining capital expenditures at $19,500,000. Life of mine average cost of goods sold per ounce is estimated at $325. The estimated average annual production is 170,000 ounces for ten years. Production is expected to commence in 2008. Our preliminary after tax internal rate of return at an assumed gold price of $500 per ounce is 25% and at an assumed gold price of $600 per ounce is 52%.
"The revised estimates for the measured and indicated resources for the Mesquite Mine demonstrate the enormous potential that remains at Mesquite," said Ray Threlkeld, President and CEO. "This is the first step towards finalizing our feasibility study due to be completed mid year 2006. The 6,200 drill hole data base should give us a very high degree of convertibility from resource to reserve. As the resource was completed within a floating cone, we can now proceed with developing the mineable reserves for the feasibility study."
The mineral resource for the Mesquite Mine has been estimated with definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum. The mineral resource estimate was prepared by Michael Hester, Vice President Independent Mining Consultants, Inc., considered a qualified person, as the term is defined in Canadian Securities Administration National Instrument 43-101.
Western Goldfields, Inc. is a gold producer focused on bringing the Mesquite Mine, located in Imperial County, California into full production. The Company currently has 59,743,051 shares of common stock issued and outstanding and 110,563,896 shares of common stock on a fully diluted basis. For further details on Western Goldfields, Inc., please visit our website at www.westerngoldfields.com.
Certain statements contained herein and subsequent oral statements made by and on behalf of the Company may contain "forward looking statements" within the meaning of the 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. 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 fiscal year ended December 31, 2005 under the caption, "Risk Factors." Most 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.
Western Goldfields Inc.
Measured, Indicated and Inferred Resource Estimate
As at April 20, 2006
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Big Chief Cholla North Big Chief
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Ore Gold Ore Gold Ore Gold
Resource Class Ktons (oz/t) Ktons (oz/t) Ktons (oz/t)
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Measured
Mineral Resource
Oxide 7,098 0.021 29,533 0.015 1,251 0.019
Non-Oxide 267 0.035 3,157 0.022 0 0.000
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Total Measured
Mineral
Resource 7,365 0.022 32,690 0.016 1,251 0.019
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Indicated Mineral
Resource
Oxide 10,916 0.016 32,080 0.014 3,716 0.020
Non-Oxide 1,101 0.024 8,076 0.021 0 0.000
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Total Indicated
Mineral
Resource 12,017 0.017 40,156 0.015 3,716 0.020
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Measured and
Indicated
Mineral Resource
Oxide 18,014 0.018 61,613 0.014 4,967 0.020
Non-Oxide 1,368 0.026 11,233 0.021 0 0.000
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Total Measured
and
Indicated
Mineral
Resource 19,382 0.019 72,846 0.016 4,967 0.020
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Inferred Mineral
Resource
Oxide 5,647 0.019 1,625 0.018 209 0.011
Non-Oxide 442 0.035 366 0.019 0 0.000
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Total Inferred
Mineral
Resource 6,089 0.020 1,991 0.018 209 0.011
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Rainbow Vista Total
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Ore Gold Ore Gold Ore Gold
Resource Class Ktons (oz/t) Ktons (oz/t) Ktons (oz/t)
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Measured Mineral
Resource
Oxide 20,228 0.017 15,245 0.014 73,355 0.016
Non-Oxide 2,004 0.018 14,163 0.025 19,591 0.024
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Total Measured
Mineral
Resource 22,232 0.017 29,408 0.019 92,946 0.018
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Indicated Mineral
Resource
Oxide 24,382 0.020 11,517 0.013 82,611 0.016
Non-Oxide 3,344 0.020 13,817 0.022 26,338 0.022
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Total Indicated
Mineral
Resource 27,726 0.020 25,334 0.018 108,949 0.017
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Measured and
Indicated
Mineral Resource
Oxide 44,610 0.019 26,762 0.014 155,966 0.016
Non-Oxide 5,348 0.019 27,980 0.024 45,929 0.023
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Total Measured
and Indicated
Mineral
Resource 49,958 0.019 54,742 0.019 201,895 0.018
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Inferred Mineral
Resource
Oxide 796 0.014 352 0.019 8,629 0.018
Non-Oxide 2,088 0.018 908 0.021 3,804 0.021
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Total Inferred
Mineral
Resource 2,884 0.017 1,260 0.020 12,433 0.019
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Notes:
1. The mineral resource estimate was prepared by Michael Hester,
Vice President Independent Mining Consultants, Inc., considered
a qualified person, as the term is defined in Canadian Securities
Administration National Instrument 43-101.
2. Resources are tabulated within a floating cone at $500 gold.
3. Measured, indicated and inferred resources were used to develop
the cone geometry.
4. Oxide resource is at a 0.006 oz/ton cutoff grade. Non-oxide is
at 0.012 oz/ton.
5. Oxide recovery assumed at 75%, non-oxide at 35% for cone runs.
6. All tons are U.S. short tons = 2,000 pounds.