NewWest Gold Corporation Reports Third Quarter Results

Lakewood, Colorado, November 9 (ots/PRNewswire) -

- All figures in US Dollars
Third Quarter Highlights
------------------------
- Successfully completed IPO; listed on TSX
- Announced Phase One drilling program results at Long Canyon
- Subsequent to quarter-end, NewWest reported multiple high grade
intercepts at its Sandman project and positive results from roadcut
rock-chip samples at Long Canyon

NewWest Gold Corporation (TSX:NWG) ("NewWest"), one of the largest
holders of precious metals mineral rights projects in Nevada's gold
trends, today announced its third quarter results for the three
months and nine months ended September 30, 2006. The net loss for
the three months ended September 30, 2006 was US$3.1 million or
US$0.06 per share, compared to US$1.2 million or US$0.02 per share
in the comparable period last year. The net loss for the nine months
ended September 30, 2006 was US 5.3 million or US$0.10 per share
compared to US$4.6 million or US$0.09 per share in the comparable
period last year. The increase in losses can primarily be attributed
to increased exploration drilling expenses related to the Sandman
and Long Canyon projects as well as stock-based compensation expense
and bonuses paid in conjunction with the IPO. Total expenses for the
quarter were US$3.3 million, compared to US$1.3 million last year.

On August 29, 2006, NewWest successfully completed an initial
public offering (IPO) raising net proceeds of US$15.8 million to
help fund the advancement of its projects along the pipeline and
into production. As a result of the IPO, NewWest's working capital
was US$13.2 million at the end of the third quarter. The Company
anticipates that this level of working capital will be sufficient to
fund its planned exploration activities through 2007.

"Since our IPO, NewWest has made tremendous progress on our active
projects as demonstrated by the results of our Phase One drill
programs at Sandman and Long Canyon," said Steve Alfers, President
and Chief Executive Officer. "The working capital provided by our
IPO positions us to aggressively pursue our Phase Two drill
programs, allowing us to expand our knowledge of the mineralization
and structure of the mineralization at both projects and move
towards establishing additional resources."

Full interim consolidated financial statements and notes, as well
as management's discussion and analysis, are available on NewWest's
website at www.newwestgold.com, or www.sedar.com.

Project Update

During the third quarter, NewWest announced results from its Phase
One drilling program at Long Canyon, one of NewWest's principal
projects in the Eastern Great Basin area of Elko County, Nevada. The
drilling program successfully extended the known mineralization
approximately 500 feet to the Northeast and 1,200 feet to the
Southwest, defining a current cumulative strike length of
approximately 3,000 feet. Gold mineralization remains open in all
directions and at depth. The best results at Long Canyon include
grades of 0.585 ounces of gold per ton (oz Au/ton) over 45 feet and
0.092 oz Au/ton over 85 feet. For a full description of the Long
Canyon Phase One results, please see the Company's news release dated
September 21, 2006. The release, drill results and a drill hole map
are available at www.newwestgold.com.

Roadcut rock-chip sample results from Long Canyon were released
subsequent to the end of the third quarter, supporting the
interpretation of structure and stratigraphy of the geologic model.
Phase Two drilling at Long Canyon is scheduled to begin this month
to further define the size and geometry of the mineralization. For a
full description of the Long Canyon roadcut rock-chip results,
please see the Company's news release dated October 31, 2006. The
release and a map of the locations of the mineralized roadcut
intervals are available at www.newwestgold.com.

NewWest and AuEx Ventures Inc. ("AuEx") agreed by way of a letter
of intent to complete a definitive joint venture agreement for the
Long Canyon project whereby the two parties will combine their
respective land positions in the Long Canyon Area. The joint venture
agreement is currently being negotiated and is expected to be
completed in the near future. It is anticipated that under the terms
of this agreement, the Company will act as operator and may earn a
51% interest in the consolidated project if it spends US$5 million on
the project over a five year period. After completion, the Company
may elect to carry AuEx through feasibility, if warranted, thereby
earning an additional 14%.

Subsequent to quarter-end, NewWest reported multiple high-grade
intercepts at its Phase One drilling program at its Sandman Project
in Humboldt County, Nevada. The drilling continued to produce
high-grade intercepts associated with known mineralization at Silica
Ridge, Southeast Pediment and North Hill. The drilling also
identified new gold mineralization at Abel Knoll, including 420 feet
of continuous mineralization with an average grade of 0.087 oz
Au/ton. The success of the Phase One drilling demonstrates the
potential of the district exploration program. Phase Two drilling at
Sandman, which includes an additional 100 holes, is underway. For a
full description of the Sandman Phase One results, please see the
Company's news release dated October 16, 2006. The release, drill
results and drill hole maps are available at www.newwestgold.com.

Conference Call and Webcast

Management will host a conference call at 10 a.m. ET on Thursday,
November 9, 2006 to discuss the third quarter results. The call can
be accessed by dialling 416-644-3422 or 1-866-250-4907. A replay of
the call will be available until midnight on November 23, 2006. It
can be accessed by dialing 1-877-289-8525 or 416-640-1917 and
entering the passcode 21206625 followed by the number sign. The
webcast can be accessed at NewWest's web site at
www.newwestgold.com/net.

Qualified Person

Michael Gustin, Ph.D., of Mine Development Associates, Reno,
Nevada, is NewWest's qualified person as defined by NI43-101 and has
reviewed and approved the technical data in this news release.

About NewWest Gold Corporation

NewWest Gold Corporation is one of the largest holders of precious
metals mineral rights in Nevada's gold trends, spanning approximately
623, 000 acres. NewWest holds a total of 19 exploration projects,
including two projects with measured and indicated resources that
are NI43-101 compliant. NewWest's goal is to advance its projects
along the pipeline into production. NewWest has active drilling
programs underway at Northumberland, Sandman and Long Canyon.

Forward-Looking Statements

This news release includes certain "forward-looking statements"
within the meaning of Canadian securities laws. Forward-looking
statements involve risks, uncertainties and other factors that could
cause actual results, performance, prospects and opportunities to
differ materially from those expressed in such forward-looking
statements. Forward-looking statements in this news release, include
but are not limited to, economic performance, statements regarding
potential mineralization and reserve exploration, and future plans
and objectives of NewWest Gold Corporation including future
exploration and development. Any number of important factors could
cause actual results to differ materially from these forward-looking
statements, including those set out in the Company's prospectus
dated August 18, 2006, as well as future results. Although the
Company believes that the assumptions and factors used in preparing
the forward-looking statements are reasonable, undue reliance should
not be placed on these statements, which only apply as of the date
of this news release, and no assurance can be given that such events
will occur in the disclosed timeframes or at all. The Company
disclaims any intention or obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.

NEWWEST GOLD CORPORATION
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2006
(Unaudited - Prepared by Management)
NEWWEST GOLD CORPORATION
(a British Columbia Corporation)
CONSOLIDATED BALANCE SHEETS
(US Dollars)
As at
-----------------------------
September 30, December 31,
2006 2005
-------------- -------------
(Unaudited)
Assets
Current
Cash and cash equivalents.................$ 13,553,944 $ 24,251
Accounts receivable trade................. 98,205 14,900
Accrued interest receivable............... 1,853 20,656
Prepaid expenses and other................ 489,143 4,953
-------------- -------------
Total current assets...................... 14,143,145 64,760
Property, plant and equipment (net)......... 4,390,424 4,329,735
Northumberland Project...................... 10,187,605 10,187,605
Reclamation bonds........................... 987,720 947,506
-------------- -------------
Total assets................................$ 29,708,894 $ 15,529,606
-------------- -------------
-------------- -------------
Liabilities and Shareholders' Equity
Current
Accounts payable trade and
accrued expenses.........................$ 871,132 $ 764,457
Due to Predecessor Companies.............. 22,765 919,545
Current portion of reclamation costs...... 73,253 72,196
-------------- -------------
Total current liabilities................. 967,150 1,756,198
Long-term reclamation costs................. 938,310 892,152
Shareholders' equity(Note 3)................ 27,803,434 12,881,256
-------------- -------------
Total liabilities and shareholders' equity..$ 29,708,894 $ 15,529,606
-------------- -------------
-------------- -------------
Approved on Behalf of the Board,
Signed: Marvin Kaiser
Director
Signed: Richard Graff
Director
The accompanying notes are an integral part of these
financial statements.
NEWWEST GOLD CORPORATION
(a British Columbia Corporation)
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited, US Dollars)
Three Months Ended
September 30,
-----------------------------
2006 2005
-------------- -------------
Revenues $ 126,622 $ 74,970
Expenses:
Exploration(Note 7)...................... 1,673,826 613,429
Operations............................... 57,919 39,266
Reclamation accretion expense............ 16,650 18,029
General and administrative............... 1,567,895 581,647
Depreciation and amortization............ 6,657 4,600
-------------- -------------
Total expenses........................... 3,322,947 1,256,971
Other income (expense):
Interest expense(Note 5)................. - -
Interest income.......................... 63,542 5,164
Other income (expense), net.............. - (500)
-------------- -------------
Total other income (expense)............. 63,542 4,664
-------------- -------------
Loss from continuing
operations before taxes.................. (3,132,783) (1,177,337)
Income tax provision....................... - -
-------------- -------------
Loss from continuing operations........... (3,132,783) (1,177,337)
Loss from discontinued operations.......... - -
-------------- -------------
Net loss.................................. $ (3,132,783) $ (1,177,337)
-------------- -------------
-------------- -------------
Accumulated deficit beginning of period....
Accumulated deficit end of period..........
Loss per share from continuing operations.. $ (0.06) $ (0.02)
-------------- -------------
-------------- -------------
Net loss per share......................... $ (0.06) $ (0.02)
-------------- -------------
-------------- -------------
Weighted average shares outstanding........ 52,945,475 50,000,000
-------------- -------------
-------------- -------------
Nine Months Ended
September 30,
-----------------------------
2006 2005
-------------- -------------
Revenues $ 192,337 $ 106,040
Expenses:
Exploration(Note 7)...................... 2,842,895 1,268,461
Operations............................... 92,525 43,002
Reclamation accretion expense............ 49,948 56,277
General and administrative............... 2,604,434 1,594,347
Depreciation and amortization............ 17,162 13,536
-------------- -------------
Total expenses........................... 5,606,964 2,975,623
Other income (expense):
Interest expense(Note 5)................. - (1,640,976)
Interest income.......................... 105,309 15,761
Other income (expense), net.............. 11,055 15,873
-------------- -------------
Total other income (expense)............. 116,364 (1,609,342)
-------------- -------------
Loss from continuing
operations before taxes................... (5,298,263) (4,478,925)
Income tax provision - -
-------------- -------------
Loss from continuing operations............ (5,298,263) (4,478,925)
Loss from discontinued operations.......... - (130,264)
-------------- -------------
Net loss................................... $ (5,298,263) $ (4,609,189)
-------------- -------------
-------------- -------------
Accumulated deficit beginning of period....$(144,963,254) $(138,598,843)
-------------- -------------
-------------- -------------
Accumulated deficit end of period..........$(150,261,517) $(143,208,032)
-------------- -------------
-------------- -------------
Loss per share from continuing operations.. $ (0.10) $ (0.09)
-------------- -------------
-------------- -------------
Net loss per share......................... $ (0.10) $ (0.09)
-------------- -------------
-------------- -------------
Weighted average shares outstanding........ 50,992,615 50,000,000
-------------- -------------
-------------- -------------
The accompanying notes are an integral part of these
financial statements.
NEWWEST GOLD CORPORATION
(a British Columbia Corporation)
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited US Dollars)
Three Months Ended
September 30,
-----------------------------
2006 2005
-------------- -------------
Cash flows from operating activities:
Loss from continuing operations............ $ (3,132,783) $ (1,177,337)
Adjustments to reconcile loss from
continuing operations to net cash used
in operating activities:
Depreciation and amortization............ 6,657 4,600
Reclamation accretion expense............ 16,650 18,029
Reclamation expenditures................. (2,733) -
Stock-based compensation(Note 3)......... 653,126 -
Loss on disposal of assets............... - 500
Interest accrued on loans to
Ultimate Shareholder.................... - -
Changes in operating working capital:
Accounts receivable trade.............. (38,002) (59,816)
Accrued interest receivable............ 39,042 (5,164)
Accounts payable trade
and accrued expenses.................. 624,840 128,406
Loan from Predecessor Companies........ 943,776 501,261
Repayment of Loan from
Predecessor Companies................. (1,222,199) -
Prepaid expenses and other............. (421,239) 5,937
-------------- -------------
Net cash used in operating activities
from continuing operations.............. (2,532,865) (583,584)
-------------- -------------
Cash flows from investing activities:
Capital expenditures..................... (60,853) (3,720)
Cash retained by Predecessor
Companies on restructuring
of NewWest Delaware..................... - -
-------------- -------------
Net cash used in investing activities
from continuing operations.............. (60,853) (3,720)
-------------- -------------
Cash flows from financing activities:
Net proceeds from issuance of shares
from initial public offering............ 15,807,333 -
Reclamation bonds....................... (12,414) -
Contributions from Ultimate Shareholder.. - 585,000
Loan from Predecessor Company............ - -
Repayment of loan from
Predecessor Company..................... - -
-------------- -------------
Net cash provided by financing activities
from continuing operations.............. 15,794,919 585,000
Effect of exchange rate changes
on cash and cash equivalents............ 971 -
Net cash provided by (used in)
continuing operations................... 13,202,172 (2,304)
Net cash used in discontinued
operations.............................. - -
-------------- -------------
Increase (decrease) in cash
and cash equivalents.................... 13,202,172 (2,304)
Cash and cash equivalents at
beginning of period..................... 351,772 9,034
-------------- -------------
Cash and cash equivalents
at end of period........................ $ 13,553,944 $ 6,730
-------------- -------------
-------------- -------------
Nine Months Ended
September 30,
-----------------------------
2006 2005
-------------- -------------
Cash flows from operating activities:
Loss from continuing operations............ $ (5,298,263) $(4,478,925)
Adjustments to reconcile loss from
continuing operations to net cash used
in operating activities:
Depreciation and amortization............ 17,162 13,536
Reclamation accretion expense............ 49,948 56,277
Reclamation expenditures................. (2,733) (2,374)
Stock-based compensation(Note 3)......... 653,126 -
Loss on disposal of assets............... 300 1,850
Interest accrued on loans to
Ultimate Shareholder.................... - 1,640,976
Changes in operating working capital:
Accounts receivable trade.............. (83,305) (87,264)
Accrued interest receivable............ 18,813 (15,492)
Accounts payable trade
and accrued expenses.................. 105,674 187,760
Loan from Predecessor Companies........ 1,668,049 501,261
Repayment of Loan from
Predecessor Companies................. (2,564,829) -
Prepaid expenses and other............. (484,190) -
-------------- -------------
Net cash used in operating activities
from continuing operations.............. (5,920,248) (2,182,395)
-------------- -------------
Cash flows from investing activities:
Capital expenditures..................... (78,149) (7,890)
Cash retained by Predecessor
Companies on restructuring
of NewWest Delaware..................... - (391,013)
-------------- -------------
Net cash used in investing activities
from continuing operations.............. (78,149) (398,903)
-------------- -------------
Cash flows from financing activities:
Net proceeds from issuance of shares
from initial public offering............ 15,807,333 -
Reclamation bonds....................... (40,214) -
Contributions from Ultimate Shareholder.. 3,760,000 2,758,000
Loan from Predecessor Company............ 1,700,000 -
Repayment of loan from
Predecessor Company..................... (1,700,000) -
-------------- -------------
Net cash provided by financing activities
from continuing operations.............. 19,527,119 2,758,000
-------------- -------------
Effect of exchange rate changes
on cash and cash equivalents............ 971 -
Net cash provided by (used in)
continuing operations................... 13,529,693 176,702
Net cash used in discontinued
operations.............................. - (268,209)
-------------- -------------
Increase (decrease) in cash
and cash equivalents.................... 13,529,693 (91,507)
Cash and cash equivalents at
beginning of period..................... 24,251 98,237
-------------- -------------
Cash and cash equivalents
at end of period........................ $ 13,553,944 $ 6,730
-------------- -------------
-------------- -------------
The accompanying notes are an integral part of these
financial statements.
NEWWEST GOLD CORPORATION
(a British Columbia Corporation)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited US Dollars, unless otherwise indicated)
1. BASIS OF PRESENTATION
These unaudited interim consolidated financial statements of NewWest
Gold Corporation (the "Company") have been prepared in accordance
with Canadian generally accepted accounting principles. These interim
consolidated financial statements of the Company do not include all
information and note disclosures as required under Canadian generally
accepted accounting principles for annual financial statements. The
interim consolidated financial statements should be read in
conjunction with the Company's consolidated annual financial
statements included in the Company's final prospectus dated as of
August 18, 2006.
The assets and liabilities of the Company's British Columbia company,
whose functional currency is the Canadian dollar, are translated at
the exchange rate in effect on the last day of the period, and income
and expenses are translated at the average exchange rate during the
reporting period. The net effect of translation gains and losses is
accumulated as a separate component of shareholders' equity. The
functional currency of all of the Company's other subsidiaries is the
United States ("US") dollar. The consolidated financial statements
and related notes are presented in US dollars, unless otherwise
indicated.
The Company's consolidated financial statements have been prepared on
a going concern basis, which presumes the realization of assets and
discharge of liabilities in the normal course of business for the
foreseeable future. The Company is currently an exploration and
development stage company and does not have any mining operations
which generate revenues or profits. Further, there can be no
assurance that the Company will either achieve or maintain
profitability in the future.
The Company believes that the net proceeds from its initial public
offering will be sufficient to meet its working capital requirements
and its currently anticipated expenditure levels through 2007.
Additional financing by way of other public offerings, private
placements or bank borrowings will also be required in the future,
the outcome of which cannot be predicted at this time. These
consolidated financial statements do not include any adjustments and
reclassifications of assets and liabilities, which might be necessary
should the Company be unable to continue its exploration and
development efforts.
2. HISTORY OF THE COMPANY
Formation
On and as of June 30, 2005, a restructuring was completed where
NewWest Delaware Corporation (a Delaware Corporation)("NewWest
Delaware") consolidated the rights to possess, explore, develop and
mine the precious metals mineral interests of Western States Minerals
Corporation, Zaca Resources Corp. and 26 Ranch Inc. (collectively,
the "Predecessor Companies" and each individually a "Predecessor
Company").
On and as of May 3, 2006, the Company was incorporated under the
Business Corporations Act as a British Columbia company.
The Company was formed for the initial purpose of, through a series
of transactions completed on July 5, 2006, acquiring certain precious
metal mineral interests consisting of mineral rights located on
private lands and mining claims located on public lands in the United
States. These mineral interests are located primarily in the state of
Nevada, with smaller land positions in the states of California, Utah
and Arizona. The mineral interests were 100% controlled by Mr. Jacob
E. Safra ("the Ultimate Shareholder") through NewWest Delaware and
its wholly owned subsidiary Nevada Western Gold Corporation, as well
as Western States Royalty Corporation (together referred to as the
"Sellers"). Following completion of the series of transactions and
the IPO, NWG Investments (the "Principal Shareholder") owns
approximately 86% of the Company, and 100% of the Principal
Shareholder is indirectly controlled by the Ultimate Shareholder. As
part of the series of transactions completed, 50 million common
shares were issued and outstanding as of July 5, 2006.
For financial reporting purposes, the Sellers and the Predecessor
Companies' results are considered to be the historical results of the
Company under the continuity of interest basis of accounting
Completion of Offering
On August 29, 2006, the Company completed its initial public offering
and issued 8.2 million common shares for gross proceeds of
approximately $18.5 million. The Underwriters were issued an
additional 192,000 common shares on September 29, 2006 pursuant to an
over-allotment option granted in connection with the initial public
offering for gross proceeds of approximately $0.4 million
(collectively, "IPO"). The Underwriters were paid a 7% commission,
totaling approximately $1.4 million. An additional $1.7 million of
expenses were incurred in connection with the IPO, resulting in net
proceeds of approximately $15.8 million.
3. SHARE CAPITAL
Shareholders' Equity
Accumulated
Shares Common Stock Deficit
-------------- -------------- -------------
Balance at
December 31, 2005...... 50,000,000 $ 157,844,510 $(144,963,254)
Contribution from
Ultimate Shareholder... - 3,760,000 -
Net proceeds from
issuance of shares
from IPO............... 8,392,000 15,807,333 -
Stock based
compensation........... - 653,126 -
Net loss................ - - (5,298,263)
Cumulative translation
loss................... - - -
-------------- -------------- -------------
Balance at
September 30, 2006..... 58,392,000 $ 178,064,969 $(150,261,517)
-------------- -------------- -------------
-------------- -------------- -------------
Cumulative
Translation Shareholders'
Adjustment Equity
-------------- --------------
Balance at
December 31, 2005...... $ - $ 12,881,256
Contribution from
Ultimate Shareholder... - 3,760,000
Net proceeds from
issuance of shares
from IPO............... - 15,807,333
Stock based
compensation........... - 653,126
Net loss................ - (5,298,263)
Cumulative translation
loss................... (18) (18)
-------------- --------------
Balance at
September 30, 2006..... $ (18) $ 27,803,434
-------------- --------------
-------------- --------------
Outstanding Share Data
As of September 30, 2006, 58,392,000 common shares were issued and
outstanding. In addition, there were 2,027,500 stock options
outstanding, as noted below.
Stock Options
The stock option activity for the three and nine months ended
September 30, 2006 follows:
Weighted
Average
September 30, Exercise
2006 Price(1)
-------------- -------------
Stock options outstanding at
beginning of period................... - $ -
Granted................................ 2,027,500 2.25
Exercised.............................. - -
Expired and/or cancelled............... - -
-------------- -------------
Stock options outstanding at
end of period......................... 2,027,500 $ 2.25
-------------- -------------
-------------- -------------
Exercisable stock options.............. 405,500 $ 2.25
-------------- -------------
-------------- -------------
(1) Weighted average exercise price is calculated using the C$2.50
exercise price converted to US$ using the September 30, 2006
exchange rate of 1.1113.
The 2006 stock options granted have a term of 10 years, with 20%
vested on the grant date and then 20% shall vest each year thereafter
on the anniversary of such grant date for the next four years. The
fair value of the 2006 stock options granted was calculated using the
Black-Scholes option pricing model with the following assumptions:
dividend yield 0%, expected volatility of 69.45%, risk free interest
rate of 4.5 percent, and expected lives of 6.25 years. The stock-
based compensation expense for the three and nine months ended
September 30, 2006 was $653,126, of which $77,312 was charged to
exploration expenses and $575,814 was charged to general and
administrative expenses.
4. PREPAID EXPENSES AND OTHER
As at
September 30,
2006
--------------
Annual property rental fees...........................$ 311,662
Drilling deposits..................................... 95,000
Prepaid insurance..................................... 42,528
Prepaid property tax.................................. 10,301
Fuel inventory........................................ 18,106
Other................................................. 11,546
--------------
Total prepaid expenses and other......................$ 489,143
--------------
--------------
5. RELATED PARTY TRANSACTIONS
At September 30, 2006, the Company had no employees. The Predecessor
Companies provide personnel and other services to the Company at
cost. During the nine months ended September 30, 2006 and 2005,
advances were made to the Company from Predecessor Companies,
primarily in respect of these services, of approximately $1,668,049
and $501,261, respectively, substantially all of which was repaid
during the nine months ended September 20, 2006. In addition,
advances outstanding from Predecessor Companies as of December 31,
2005 of $919,545 were also repaid during the nine months ended
September 30, 2006. At September 30, 2006, advances to the Company
from Predecessor Companies totaled $22,765. The Company intends to
transfer employees to the Company on January 1, 2007.
During the nine months ended September 30, 2006 and 2005, the
Ultimate Shareholder made additional capital contributions to the
Company in the amount of $3,760,000 and $2,758,000, respectively.
During the nine months ended September 30, 2006, a Predecessor
Company made a $1.7 million non-interest bearing advance to the
Company, which was repaid in May 2006.
The Predecessor Companies received loans from the Ultimate
Shareholder to finance its activities in the aggregate amount of
$48,599,798 at June 30, 2005 bearing interest at rates ranging from
6.5% to 7%. These loans, which were unsecured and payable on demand,
were retained by the Predecessor Companies on the June 30, 2005
restructuring of NewWest Delaware (see Note 2). During the nine
months ended September 30, 2005, interest expense on these loans was
$1,640,976. No principal or interest payments were made on these
loans during the 2005 period.
6. TAX CONTINGENCIES
In connection with the series of transactions referred to in Note 2,
an application for a withholding certificate was made to the Internal
Revenue Service in the United States indicating that there would be
no tax liability to the Principal Shareholder on the sale and
transfer and, as a result, there would be no withholding tax
liability. Pending receipt of this withholding certificate, the
Company withheld and pledged 5 million common shares that would
otherwise have been delivered to the Principal Shareholder pursuant
to a withholding and pledge agreement. In September 2006, the
withholding certificate was received from the Internal Revenue
Service in the United States confirming that there will be no tax
liability to the Principal Shareholder on the sale and transfer, and
the 5 million shares were subsequently released to the Principal
Shareholder.
7. EXPLORATION
Exploration expenditures for the three and nine months ended
September 30, 2006 and 2005 are as follows:
Three Months ended Nine Months ended
------------------ -----------------
September 30, September 30,
------------- -------------
Projects 2006 2005 2006 2005
-------- ---- ---- ---- ----
Northumberland(1).... $ 62,284 $ 55,793 $ 173,722 $ 151,274
Sandman.............. 784,899 155,032 1,279,618 266,314
Zaca................. 2,655 56,471 15,687 106,277
Eastern Great
Basin............... 533,675 98,666 675,182 178,023
Carlin-Cortez
Trends.............. 34,313 47,134 80,716 132,126
Other Projects....... 8,680 49,108 28,212 107,856
Unallocated
exploration
personnel and
overhead............ 247,320 151,225 589,758 326,591
----------- ----------- ----------- ----------
Total $1,673,826 $ 613,429 $2,842,895 $1,268,461
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
(1) Amounts represent expenditures made directly by the Company
exclusive of the expenditures made by Newmont USA Limited in
accordance with the joint venture agreement.
Newmont USA Limited ("Newmont"), a subsidiary of Newmont Mining
Corporation, completed approximately $845,000 and $1,467,000 of
exploration expenditures under the Northumberland joint venture
during the three and nine months ended September 30, 2006 compared
to approximately $663,000 and $1,169,000 for the same periods in
2005, respectively.
NEWWEST GOLD CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(EXPRESSED IN U.S. DOLLARS)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2006
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussions and Analysis of Financial Condition
and Results of Operations ("MD&A") for the three and nine month
periods ended September 30, 2006, prepared as of November 8, 2006,
provides information that management believes is relevant to an
assessment and understanding of the interim consolidated financial
condition for NewWest Gold Corporation ("the Company") as at
September 30, 2006 and the results of its operations and cash flows
for the three and nine month periods then ended. This MD&A should be
read in conjunction with the Company's annual consolidated financial
statements and the corresponding notes thereto included in the
Company's final prospectus dated as of August 18, 2006.

The Company's consolidated financial statements have been prepared
by management in accordance with generally accepted accounting
principles (" GAAP") in Canada. The consolidated financial
statements, related notes and MD&A are presented in United States
("US") dollars, unless otherwise indicated.

Certain statements contained in the MD&A are forward-looking
statements that involve risks and uncertainties. The forward-looking
statements are not historical facts, but rather are based on the
current plans, objectives, goals, strategies, estimates, assumptions
and projections about the Company's industry, business and future
financial results. Actual results could differ materially from the
results contemplated by these forward-looking statements due to a
number of factors , including those discussed in the Company's final
prospectus dated as of August 18, 2006

Overview

The Company is an advanced gold exploration and development
company primarily focused in the state of Nevada. The Company is one
of the largest holders of precious metals mineral rights in Nevada's
gold trends, spanning approximately 623,000 acres. The Company holds
19 exploration projects, including advanced stage projects with
measured and indicated resources in accordance with NI 43-101. The
Company's goal is to advance its projects along the development
pipeline into production. The Company has active drilling programs
underway at its three priority projects, Northumberland, Sandman and
Long Canyon.

Highlights for the 2006 third quarter through the date of this
report are as follows:

- Successfully completed initial public offering ("IPO") for net
proceeds of $15.8 million. The Company's working capital at
September 2006 was approximately $13.2 million.
- The Company had net losses of approximately $3.1 million and
$5.3 million for the three and nine months ended September 30, 2006,
respectively. This compares to $1.2 million and $4.5 million for the
same periods in 2005, respectively. The increase in losses during the
2006 periods is primarily the result of significantly higher
exploration drilling costs together with stock-based compensation
expense and bonuses paid in conjunction with the successful
completion of the IPO.
- Completed Phase One of the Sandman 2006 drilling program, with 84
reverse circulation ("RC") holes completed, exceeding 27,000 feet.
This program verified newly discovered zones of mineralization at
Southeast Pediment and expanded mineralization at Silica Ridge and
North Hill, both laterally and at depth. A new discovery of high-
grade gold mineralization at Abel Knoll demonstrates the potential of
the district exploration program. The drilling continued to produce
high-grade intercepts associated with known mineralization.
- Phase Two of the Sandman 2006 drilling program is underway, designed
to include an additional 100 holes.
- Completed Phase One of the Long Canyon 2006 drilling program,
consisting of 16 RC drill holes, totaling 6,610 feet, construction of
access roads, continued surface sampling, and geologic mapping. The
drilling program successfully extended the known mineralization. The
program produced 13 drill holes with significant near surface
intercepts.
- Completed roadcut rock-chip sampling at Long Canyon, confirming
interpretation of the structure and stratigraphy. Phase Two of the
Long Canyon drilling program is currently being evaluated, with
drilling to commence in November.
- Since May 24, 2006 through September 30, 2006, the Company completed
approximately $561,000 of project expenditures under the Long Canyon
joint venture. It is anticipated that under the terms of this
agreement, the Company, as operator, may earn a 51% interest in the
consolidated project if it spends $5 million on the project over a
five year period.
- Newmont USA Limited ("Newmont"), a subsidiary of Newmont Mining
Corporation, completed approximately $1.5 million of project
expenditures under the Northumberland joint venture during the nine
months ended September 30, 2006, bringing Newmont's inception to date
project expenditures to approximately $4.8 million. Under the terms
of the Northumberland joint venture, Newmont must spend a minimum
cumulative expenditure through the end of 2006 of $6 million.

Company History

Formation

The Company was formed for the initial purpose of, through a
series of transactions completed on July 5, 2006, acquiring certain
precious metal mineral interests consisting of mineral rights
located on private lands and mining claims located on public lands
in the US, primarily in the state of Nevada, with smaller land
positions in the states of California, Utah and Arizona. The mineral
interests were 100% controlled by Mr. Jacob E. Safra ("the Ultimate
Shareholder") through NewWest Gold Corporation (a Delaware
Corporation) ("NewWest Delaware") and its wholly owned subsidiary
Nevada Western Gold Corporation, as well as Western States Royalty
Corporation (together referred to as the "Sellers"). Following
completion of the series of transactions and the IPO, NWG
Investments (the "Principal Shareholder") owns approximately 86% of
the Company, and 100% of the Principal Shareholder is indirectly
controlled by the Ultimate Shareholder.

On June 30, 2005, a restructuring was completed where NewWest
Delaware consolidated the rights to possess, explore, develop and
mine the precious metals mineral interests of Western States
Minerals Corporation, Zaca Resources Corp. and 26 Ranch Inc.
(collectively, the "Predecessor Companies " and each individually a
"Predecessor Company").

Basis of Presentation

The consolidated financial statements of the Company are comprised
of the combined financial statements of the Sellers and the
Predecessor Companies using the historical results of operations and
the historical basis of assets and liabilities of these companies.
Therefore, even though the Company is a newly incorporated company,
the MD&A is based on the historical combined financial statements of
the Sellers and the Predecessor Companies. For financial reporting
purposes, the Sellers and the Predecessor Companies' results are
considered to be the historical results of the Company under the
continuity of interest basis of accounting.

The combined results of operations of the Sellers and the
Predecessor Companies will not necessarily be indicative of the
consolidated financial position, operating results or cash flows in
the future or what the consolidated financial position, operation
results or cash flows would have been had the Company been a
separate, independent publicly-traded company during the periods
presented. The Company expects that its expenses as a separate
publicly-traded company may be higher than the amounts reflected in
the combined consolidated statements of operations.

Summary Financial Information (unaudited)

Three Months Ended Nine Months Ended
------------------ -----------------
Summary Operating September 30, September 30,
----------------- ------------- -------------
Results 2006 2005 2006 2005
------- ---- ---- ---- ----
Revenues.........$ 126,622 $ 74,970 $ 192,337 $ 106,040
Expenses.........$ 3,322,947 $ 1,256,971 $ 5,606,964 $ 2,975,623
Interest
expense(1)......$ - $ - $ - $ 1,640,976
Loss from
continuing
operations......$ (3,132,783) $ (1,177,337) $ (5,298,263) $ (4,478,925)
Net loss.........$ (3,132,783) $ (1,177,337) $ (5,298,263) $ (4,609,189)
Net loss per
share...........$ (0.06) $ (0.02) $ (0.10) $ (0.09)
September 30, December 31,
------------- ------------
Summary Balance Sheet 2006 2005
--------------------- ---- ----
Property, plant and equipment................$ 14,578,029 $ 14,517,340
Total assets.................................$ 29,708,894 $ 15,529,606
Total liabilities............................$ 1,905,460 $ 2,648,350
Total shareholder's equity...................$ 27,803,434 $ 12,881,256
(1) The loans giving rise to the interest expense were retained by the
Predecessor Companies on the restructuring of NewWest Delaware on
June 30, 2005.

Results of Operations - Three Months and Nine Months Ended
September 30, 2006 and 2005

Summary

Loss from continuing operations for the three months and nine
months ended September 30, 2006 were $3,132,783 and $5,298,263
compared to $1,177, 337 and $4,478,925 for the same periods in 2005,
respectively. Expenses for the three and nine months ended September
30, 2006 were $3,322,947 and $5,606,964 up from $1,256,971 and
$2,975,623 for the same periods in 2005, respectively. The increase
in losses from continuing operations and expenses during the 2006
periods can primarily be attributed to significantly higher
exploration expenses resulting from increased exploration drilling
costs together with stock-based compensation expense associated with
stock options granted in August 2006 and bonuses paid in conjunction
with the successful completion of the IPO.

Revenues

During the three and nine months ended September 30, 2006, the
Company had $126,622 and $192,337 in revenues from Newmont for
services provided by the Company related to Newmont's earn-in
requirements at the Northumberland Project. This compares to $74,970
and $106,040 of revenues from Newmont for the three and nine months
ended September 30, 2005, respectively. The higher level of services
provided to Newmont is the result of increased exploration drilling
activities in the 2006 periods compared to the 2005 periods.

Exploration

Exploration spending varies depending on the perceived potential
of properties in the portfolio and available funds. During 2006, the
Company has been focused on three priority projects; Northumberland,
Sandman and Long Canyon. Exploration expenditures were significantly
higher in the three and nine month periods ended September 30, 2006
primarily due to exploration drilling at the Sandman and Long Canyon
projects, together with stock-based compensation expense and bonuses
paid upon the successful completion of the IPO. Details of
exploration spending by project are as follows:

Three Months ended Nine Months ended
------------------ -----------------
September 30, September 30,
------------- -------------
Projects 2006 2005 2006 2005
-------- ---- ---- ---- ----
Northumberland(1)........ $ 62,284 $ 55,793 $ 173,722 $ 151,274
Sandman.................. 784,899 155,032 1,279,618 266,314
Zaca..................... 2,655 56,471 15,687 106,277
Eastern Great Basin...... 533,675 98,666 675,182 178,023
Carlin-Cortez Trends..... 34,313 47,134 80,716 132,126
Other Projects........... 8,680 49,108 28,212 107,856
Unallocated exploration
personnel and
overhead................ 247,320 151,225 589,758 326,591
----------- ----------- ----------- ----------
Total.................... $1,673,826 $ 613,429 $2,842,895 $1,268,461
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
(1) Amounts represent expenditures made directly by the Company
exclusive of the expenditures made by Newmont in accordance with the
joint venture agreement.

Newmont completed approximately $845,000 and $1,467,000 of
exploration expenditures at the Northumberland Project during the
three and nine months ended September 30, 2006 compared to
approximately $663,000 and $1,169,000 for the same periods in 2005,
respectively. The 2006 drilling program for Northumberland includes
four drill rigs, including reverse circulation ("RC ") and core rigs.
In addition to the expenditures made by Newmont under the Joint
Venture Agreement, the Company incurred $62,284 and $173,722 of
direct exploration related expenditures during the third quarter and
first nine months of 2006 compared to $55,793 and $151,274 for the
same periods in 2005, respectively, related to the Northumberland
Project.

Exploration expenditures at the Sandman Project were higher for
the three and nine months ended September 30, 2006 than the same
periods in 2005 primarily as a result of exploration drilling
expenditures from the 2006 drill program. The Company recently
completed Phase One of the 2006 drilling program, which included 75
RC holes designed to expand and test shallow and deep targets at the
known mineralized zones of Southeast Pediment, Silica Ridge and
North Hill. The Company also completed nine RC holes to test three
district targets at Abel Knoll, Windmill and Sandbowl as part of the
Phase One program. In total, 84 holes were completed, exceeding
27,000 feet. The drilling continued to produce high-grade intercepts
associated with known mineralization. Phase Two of the 2006 drilling
program is underway, and is designed to include an additional 100
holes with an estimated budget of approximately US$1.2 million.

Exploration expenditures for the Eastern Great Basin Project were
higher for the three and nine months ended September 30, 2006 due to
2006 exploration expenditures related to the Long Canyon project.
The Company recently completed Phase One of the Long Canyon 2006
drilling program, consisting of 16 RC drill holes totaling 6,610
feet, construction of access roads, continued surface sampling, and
geologic mapping. The program produced 13 drill holes with
significant near surface intercepts. Phase Two of the drilling
program is underway.

Since May 24, 2006 through September 30, 2006, the Company
completed approximately $561,000 of project expenditures under the
Long Canyon joint venture. The Company and AuEx Ventures Inc.
("AuEx") agreed by way of a letter of intent to complete a
definitive joint venture agreement for the Long Canyon project
whereby the two parties will combine their respective land positions
in the Long Canyon Area. The definitive joint venture agreement is
currently being negotiated and is expected to be completed in the
near future. Under the terms of this agreement, the Company will act
as operator and may earn a 51% interest in the consolidated project
if it spends $5 million on the project over a five year period.
After completion, the Company may elect to carry AuEx through
feasibility, if warranted, thereby earning an additional 14%.

Exploration expenditures for the Zaca project, the Carlin-Cortez
projects and other projects for the three and nine months ended
September 30, 2006 were lower than the same periods in 2005 as a
result of the Company's focus on the 2006 drilling programs for its
three priority projects.

Unallocated exploration personnel and overhead increased in the
three and nine months ended September 30, 2006 over the 2005 periods
due to higher exploration staffing levels, stock-based compensation
expense and bonuses paid.

Exploration expenses for the fourth quarter of 2006 are expected
to slightly increase over the third quarter of 2006 primarily due to
exploration activities related to the Sandman and Long Canyon
projects.

Operations Expenses

Operating expenses related to equipment services provided to
Newmont at the Northumberland Project were $57,919 and $92,525
during the three and nine months ended September 30, 2006,
respectively. This compared to $39, 266 and $43,002 for the same
periods in 2005, respectively. Equipment services were higher in the
2006 periods primarily as a result of more equipment services
provided, given the higher level of exploration drilling activities,
together with higher fuel costs in 2006.

General and Administrative Expenses

General and administrative expenses were $1,567,895 and $2,604,434
during the three and nine months ended September 30, 2006 compared to
$581, 647 and $1,594,347 during the same periods in 2005,
respectively. These expenses increased in the 2006 periods primarily
as a result of the recognitio