Western Goldfields (WGW)

[ibreken]

I'm just glad to own a stock that actually really is producing gold....unlike 'another' stock we know
Actually I wasn't all that impressed the way I saw it tanked last week when gold dipped and the markets melted down. The juniors all got hit but this one shouldn't have been hit that bad. People seem more willing to sell than I would like. Even today it gapped up nicely and lost all the gains during the session. Shamefully I was out of the country for the past couple of weeks and totally cut off from the market so I couldn't scoop up the 'cheapies'. With gold above $900 this thing should be north of $5 a share within a few months if not already. RBC upgraded the stock yesterday. I personally think they are still underestimating on all their numbers but here it is.

Western Goldfields Gets RBC Upgrade On Strong Mesquite Start

10:24am ET (Dow Jones Newswires)

TORONTO (Dow Jones)--A strong start at Western Goldfields Inc.'s (WGW) Mesquite Mine in southeastern California led RBC Capital Markets to upgrade the stock to outperform from sector perform.
Last week, the Toronto company announced the first gold pour of 1,000 ounces at Mesquite, transforming Western Goldfields into a gold producer. Production was achieved three months ahead of the feasibility study schedule and on budget, "a rarity these days," according to RBC.

Western Goldfields is targeting gold production from Mesquite in 2008 of 155,000-165,000 ounces at a cash cost of US$355-US$365 an ounce.

RBC's Michael Curran had been projecting a much slower ramp-up for the operation, forecasting 65,000 ounces of gold for 2008, but has now increased his production forecast for the year to 147,000 ounces at a cash cost of US$359 an ounce.

In a research report Thursday, Curran said his target price on the stock remains C$5, though the strong start to the project and compelling returns from the current share price level prompted the upgrade to outperform.

In Toronto Thursday, Western Goldfields is up 5.2% to C$3.42.

RBC considers the Mesquite mine to be the first building block for an eventual Tier II gold producer, noting that Western Goldfields management has "extensive experience" running much larger gold producers.

Curran said he expects increased investor interest in Western Goldfields over the next two-to-three quarters as it ramps up production in the first half of 2008. He said potential catalysts for the shares in the short-term include explorationg drill results at Mesquite and merger and acquisition activity.

The analyst considers the successful delivery of the Mesquite mine restart as "a springboard to further transactions and/or acquisitions."

Curran said impediments to his target price on Western Goldfields include commodity-price fluctuations, greater-than-expected mine operating and new project construction costs as well as increasing energy, material and manpower costs.

RBC has raised its 2008 cash-flow projection for Western Goldfields to 38 U.S. cents a share from 13 U.S. cents and now puts 2008 earnings at 17 U.S. cents a share, up from its previous projection of 4 U.S. cents. RBC's 2008 revenue forecast has also increased significantly to US$115.1 million from US$51 million.

RBC has provided investment-banking services to Western Goldfields in the last 12 months. Curran doesn't own the stock.

Company Web site: http://www.westerngoldfields.com
-Judy McKinnon, Dow Jones NewsWires; 416-306-2100
(END) Dow Jones Newswires
01-24-08 1024ET
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