Western Goldfields Announces Exercise of Over-Allotment Option by Underwriters

    TORONTO, Jan. 31 /CNW/ - Western Goldfields, Inc. (TSX: WGI, OTC BB:
WGDF.OB) announced that the underwriters have exercised in full their
over-allotment option to purchase an additional 2,215,000 common shares in
connection with Western Goldfields' previously announced marketed public
equity offering at a public offering price of C$2.25 per share for gross
proceeds of approximately C$5.0 million. The offering was made under a
prospectus supplement to Western Goldfields' shelf prospectus dated October
27, 2006. Including the over-allotment shares, the offering will total
33,330,000 common shares at a public offering price of C$2.25 per share for
gross proceeds of approximately C$75 million.
    The underwriting syndicate was co-led by Wellington West Capital Markets
Inc. and BMO Capital Markets and included RBC Capital Markets, GMP Securities
L.P. and Research Capital Corp.
    The net proceeds of the offering will be used to finance activities at
Western Goldfields' Mesquite Mine project and for general corporate purposes.
    Copies of the prospectus supplement may be obtained from Wellington West
Capital Markets Inc., 145 King Street West, Suite 700, Toronto, Ontario, M5H
1J8 (Tel: 416 642-1900, Attention: Scott Larin); or from BMO Capital Markets,
1 First Canadian Place, Distribution Centre, Toronto, Ontario, M5X 1H3 (Tel:
416 363-6996 x 224, Attention: Des Raposo).

    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 operated the mine until 2001 when it
ceased operations, 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.
    Western Goldfields, Inc. is listed on the Toronto Stock Exchange and
trades under the symbol WGI and is quoted on the OTCBB under the symbol
WGDF.OB. For further details, please visit www.westerngoldfields.com.

    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 similar 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,
financing options and the consequences thereof, 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.
    %SEDAR: 00021587E          %CIK: 0001208038

For further information:

For further information: please visit www.westerngoldfields.com, or
contact Brian Penny, Chief Financial Officer, (416) 324-6002,
bpenny@westerngoldfields.com; Julie Taylor Pantziris, Director, Regulatory
Affairs and Investor Relations, (416) 324-6015, jtaylor@westerngoldfields.com;
Richard Wertheim, Investor and Media Relations, Wertheim + Company Inc., (416)
594-1600, wertheim@wertheim.ca

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