UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) NOVEMBER 28, 2004
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WESTERN GOLDFIELDS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
IDAHO
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(State or Other Jurisdiction of Incorporation)
0-50894 38-3661016
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(Commission File Number) (IRS Employer Identification No.)
961 MATLEY LANE, SUITE 120
RENO, NEVADA 89502
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(Address of Principal Executive Offices) (Zip Code)
(775) 337-9433
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On November 28, 2004 Western Goldfields, Inc. (the "Company") signed a
Mining Venture Agreement with 321Gold, Inc. ("321"). The agreement covers
sixteen mining claims relating to the Sunny Slope properties in Mineral County,
Nevada and an area of interest including all lands within approximately one mile
beyond the boundary of the claims. The parties entered into the agreement as the
exclusive means by which they would accomplish the following purposes:
- acquiring properties within the area of interest;
- evaluating the possible development of the properties within the area
of interest;
- marketing ores, minerals and mineral resources produced from the
properties covered by the agreement; and
- performing any other activity necessary, appropriate, or incidental to
any of the foregoing.
The Company's initial contribution under the agreement is its interests in
the sixteen claims covered by the agreement. 321's initial contribution is
$1,000,000, which is to be used to fund the operations to be carried out under
the agreement and budgets approved under the agreement and shall be expended by
the end of the calendar year 2006. Each party is obligated to contribute funds
to adopted programs under the agreement in proportion to their respective
participating interests. If a party elects to contribute less than its
respective participating interest, its participating interest will be reduced
proportionally with respect to the lesser amount of the contribution. The
overall policies, objectives, procedures, methods and actions under agreement
are determined by a committee with each party appointing one member. The party
with the largest participating interest may break any deadlock of the committee.
A manager has the overall management responsibility for operations under the
agreement. The Company has been appointed as the manager.
The Company's initial participating interest is 49%, and 321's initial
participating interest is 51%. The Company has the right at any time to convert
its participating to a 4% of 100% net smelter returns interest. If the Company
exercises this right, it will have no further obligation to make any further
expenditures under the agreement.
321's participating interest will increase to 70% if it has produced at
least 500 ounces of gold from the properties covered by the agreement within
three years of the date of the agreement if the Company has not been called upon
to make a cash contribution. If 321 obtains a 70% participating interest, the
Company has the right for one year to increase its participating interest to 70%
and reduce 321's participating interest to 30% by paying 321 two and one-half
times 321's actual expenditures for exploration and development on the
properties covered by the agreement.
Phase I, the exploration program, is planned to commence upon the signing
of the agreement with a total estimated budget of $225,000. The budget for
Phase II, the development program of a small underground mine, which could
follow Phase I pending successful results of Phase I, is currently estimated at
$775,000.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
Exhibit No. Description of Exhibit
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10.1 Mining Venture Agreement, dated November 28, 2004,
between Western Goldfields, Inc. and 321Gold, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 2, 2004 Western Goldfields, Inc.
By: /s/ Mark C. Shonnard
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Name: Mark C. Shonnard
Title: CFO, Treasurer and Secretary
EXHIBIT INDEX
Exhibit No. Description of Exhibit
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10.1 Mining Venture Agreement, dated November 28, 2004,
between Western Goldfields, Inc. and 321Gold, Inc.