Record gold sales of 47,535 ounces of gold averaged $870 per ounce in the third quarter compared to 22,760 ounces in the second quarter and 9,960 ounces in the first quarter
Net income of $30.5 million or $0.22 per share, including an after-tax mark-to-market gain of $18.8 or $0.14 per share, in the third quarter
Cash flow provided from operating activities of $16.5 million in the third quarter
Cost of sales of $390 per ounce in the quarter below previous guidance
Strong financial position with cash of $45.4 million, including $7.5 million of restricted cash, an increase of $11.4 million in the quarter

Toronto, November 4, 2008 - Western Goldfields Inc. ("Western Goldfields" or the "Company") (TSX:WGI, NYSE Alternext:WGW) today announced financial results for the three-month and nine-month periods ended September 30, 2008. During the nine-month period ended September 30, 2008 the Company continued to increase production and further improved efficiencies to reduce cost of sales per ounce. Results are based on U.S. GAAP and expressed in U.S. dollars unless otherwise indicated.

"We are pleased to report our strongest quarter ever with our highest sales, lowest cost of sales and most significant cash flow," stated Mr. Raymond Threlkeld, President and Chief Executive Officer.

Gold sales during the quarter totaled 47,535 ounces, at an average cost of sales(1) of $390 per ounce which is below the Company's previous cost guidance. Gold revenues during the quarter were $870 per ounce. Gold production was 42,357 ounces.

Gold sales for the first nine months were 80,255 ounces, at an average cost of sales(1) of $503 per ounce. Gold revenues for the first nine months were $884 per ounce. Gold production was 79,947 ounces.

Subsequent to the quarter end, the Company announced the completion of one of its previously stated value-enhancing initiatives by introducing Western Goldfields' improved mine plan. The improved plan is designed to focus on sequential mining of the Mesquite pits in order to increase production to over 700,000 ounces through the next four years, reduce costs and improve cash flow.

"We are very excited about the improved mine plan as it increases production and cash flow in the next four years for the benefit of our shareholders," said Mr. Threlkeld.

Third Quarter and Year-to-Date Highlights

For the third quarter 2008, gold sales totaled 47,535 ounces, at an average cost of sales⁽¹⁾ of $390 per ounce which was below the Company's previous cost guidance. The Company produced 42,357 ounces of gold.

Production for the third quarter continued to ramp-up. The Company continued to focus on controlling costs and improving equipment efficiency resulting in lower cost of sales⁽¹⁾ per ounce than previously forecast, despite a decrease in shovel availability that negatively impacted production.

Total year-to-date gold sales totaled 80,255 ounces, at an average cost of sales⁽¹⁾ of $503 per ounce. The Company produced 79,947 ounces of gold.

	Third Quarter 2008		Nine Months 2008
	Tons Mined	Grade	Tons Mined	Grade
Ore Mined	3,012,630	0.023	6,266,543	0.026
Waste Mined	11,280,193	????? ??--? ??	34,152,652	???????? --
TOTAL	14,292,823		40,419,195?

Financial Results

For the third quarter, Western Goldfields reported net income of $30.5 million compared to a net loss of $36.4 million for the third quarter of 2007. For the three and nine-month periods ended September 30, 2008, the Company had net income to common shareholders of $30.5 million and $6.8 million, or $0.22 and $0.05 per share, respectively. This compares to a loss of $36.4 million and $43.0 million, or $0.31 and $0.39 per share for the three and nine-month periods ended September 30, 2007, respectively. The net income for the three and nine months includes a after-tax gain of $18.8 million and loss of $1.2 million, respectively, arising from the mark-to-market of contracts for the forward sale of gold, which were taken out as a requirement of our term loan facility. The mark-to-market gain reflects the fact that the spot gold price decreased from $930 per ounce at June 30, 2008 to $885 at September 30, 2008. Year-to-date results for 2008, as compared with 2007, show an increase in gold sold to 80,255 ounces from 6,101 ounces; the average selling price per ounce rose to $884 in 2008 from $665 in 2007.

Liquidity and Capital Resources

At September 30, 2008, the Company's cash balance was $45.4 million, including restricted cash of $7.5 million. In addition, the Company had unutilized credit facilities of $18.7 million. The Mesquite Mine generated $16.5 million and $3.0 million of cash flow from operating activities for the three and nine-month periods ended September 30, 2008, respectively.

Capital Expenditures

The third quarter represented Western Goldfields' last significant quarter of expansion capital spending with the Company incurring $5.2 million of capital expenditure at its Mesquite mine. Planned spending for the balance of the year is $1.6 million. The Company expects future capital requirements to achieve the current mine plan at Mesquite to be minimal. We continue to assess the potential of the sulfide resources.

2008 Outlook

Gold sales for full-year 2008 are expected to total approximately 117,000 ounces of gold at an average cost of sales(1) of $500 per ounce. The Mesquite Mine is expected to sell approximately 37,000 ounces of gold in the fourth quarter.

(1) Cost of sales per ounce is defined as cost of sales as per the Company's financial statements divided by the number of ounces sold.

Western Goldfields Inc.

Western Goldfields Inc. is an independent gold production and exploration company with a focus on precious metal mining opportunities in North America. The Mesquite Mine, currently the Company's sole asset, was brought into production in January 2008, and the Company's focus is now on achieving the anticipated rate of production and completing planned improvements to the property. The Company has 2.8 million ounces in Proven and Probable Reserves. Western Goldfields common shares trade on the Toronto Stock Exchange under the symbol WGI, and on the New York Stock Exchange Alternext under the symbol WGW.

Mr. Wes Hanson, P.Geo., Vice President of Mine Development, Western Goldfields Inc., is the qualified person under National Instrument 43-101 who supervised the preparation of the technical information contained in this news release. Mr. Hanson is an officer of the Company.

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 securities law. Such forward-looking statements are identified by words such as "intends", "anticipates", "believes", "expects", "plans" and include, without limitation, statements regarding the Company's plan of business operations, production and cost estimates, receipt of working capital, anticipated revenues, and capital and operating expenditures. These forward-looking statements are based on the best estimates of management at the time such statements are made. Expected production results and cost of sales (including without limitation, statements made with respect to future production and costs contemplated by our new mine plan) are based in part on current and historical production and cost data factoring certain assumptions with respect to future metal prices, costs and availability of supplies and labour and other parameters. 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, variations in metal prices and/or cost of supplies, possible variations in ore grade or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, as well as those set forth in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2007 filed with the U.S. Securities and Exchange Commission and with SEDAR, under the caption "Risk Factors" as well as other filings made by the Company with securities regulatory authorities. 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 regulations, 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.
CONSOLIDATED BALANCE SHEETS
(In thousands U.S. dollars)
(Unaudited)
	September 30,			December 31,
	2008			2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	37,914		$	43,870
Restricted cash		7,500			7,500
Receivables		364			298
Inventories		30,305			11,201
Prepaid expenses		1,165			887
Current portion of deferred income tax asset		1,070			755
TOTAL CURRENT ASSETS		78,318			64,511

Plant and equipment, net of
accumulated amortization		106,757			77,951
Construction in process		4,592			21,864
Investments - reclamation and remediation		8,884			8,661
Long-term deposits		362			348
Long-term prepaid expenses		1,427			1,555
Deferred debt issuance costs, net of accumulated amortization		2,881			3,227
Deferred income tax asset		31,285			36,379
TOTAL OTHER ASSETS		156,188			149,984
TOTAL ASSETS	$	234,506		$	214,495

LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	8,315		$	8,781
Current portion of mark-to-market loss on gold hedging contracts		5,674			1,935
Current portion of loan payable		15,109			6,882
TOTAL CURRENT LIABILITIES		29,098			17,598

LONG-TERM LIABILITIES
Mark-to-market loss on gold hedging contracts		54,633			56,966
Loan payable		71,230			69,581
Reclamation and remediation liabilities		5,323			5,061
TOTAL LIABILITIES		160,284			149,206

STOCKHOLDERS' EQUITY
Common stock, of no par value, unlimited shares authorized; 136,761,919 and 135,049,685 shares issued and outstanding, respectively		135,267			133,725
Stock options and warrants		8,109			7,551
Accumulated deficit		(69,154	)		(75,987	)
TOTAL STOCKHOLDERS' EQUITY		74,222			65,289

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	234,506		$	214,495

WESTERN GOLDFIELDS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(In thousands U.S. dollars)
(Unaudited)

	Three Months Ended September 30						Nine Months Ended September 30
	2008			2007			2008			2007
REVENUES
Revenues from gold sales	$	41,353		$	1,281		$	70,955		$	4,060

EXPENSES
Mine operating costs		17,591			6,067			38,800			11,741
Royalties		928			50			1,533			154
Cost of sales (excludes amortization and???????? accretion)		18,519			6,117			40,333			11,895
Amortization and accretion		2,564			1,609			6,948			2,362
		21,083			7,726			47,281			14,257

GROSS PROFIT (LOSS)		20,270			(6,445	)		23,674			(10,197	)

EXPENSES
General and administrative		1,525			1,620			4,491			5,131
Exploration and business development		121			(273	)		936			759
		1,646			1,347			5,427			5,890

OPERATING INCOME (LOSS)		18,624			(7,792	)		18,247			(16,087	)

OTHER INCOME (EXPENSE)
Interest income		269			341			942			1,383
Interest expense and commitment fees		(1,007	)		(606	)		(3,026	)		(848	)
Amortization of deferred debt issuance costs		(115	)		(118	)		(346	)		(227	)
Realized and unrealized gain (loss) on mark-to-market of gold forward sales contracts		30,777			(28,331	)		(2,043	)		(27,573	)
Gain on sale of assets		---			43			---			43
Gain (loss) on foreign currency exchange		(826	)		89			(1,596	)		294
		29,098			(28,582	)		(6,069	)		(26,928	)

INCOME (LOSS) BEFORE INCOME TAXES		47,722			(36,374	)		12,178			(43,015	)

INCOME TAX EXPENSE		(17,206	)		---			(5,345	)		---

NET INCOME (LOSS)		30,516			(36,374	)		6,833			(43,015	)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		---			8			---			---

NET COMPREHENSIVE INCOME (LOSS)	$	30,516		$	(36,366	)	$	6,833		$	(43,015	)
NET INCOME (LOSS) PER SHARE -- BASIC	$	0.22		$	(0.31	)	$	0.05		$	(0.39	)
???????????????????????????????????????????? ????????????????-- DILUTED	$	0.21		$	(0.31	)	$	0.05		$	(0.39	)
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK OUSTANDING -- BASIC		136,739,854			118,281,240			136,272,266			111,628,367
?????????????????????????????????????? ?????????????????????-- DILUTED		147,861,514			118,281,240			149,303,191			111,628,367

WESTERN GOLDFIELDS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands U.S. dollars)
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	30,516		$	(36,374	)	$	6,833		$	(43,015	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Items not affecting cash:
Amortization of plant and equipment		3,710			1,531			6,740			2,123
Amortization of deferred debt issuance costs		115			118			346			227
Accretion expense		88			84			262			253
Deferred income taxes		16,640			---			4,779			---
Gain on sale of assets		---			(43	)		---			(43	)
Interest net of reimbursed costs - reclamation and remediation		(81	)		(106	)		(223	)		(276	)
Stock based compensation		417			662			1,075			1,950
Mark-to-market loss (gain) on gold hedging contracts		(31,415	)		28,331			1,405			27,572
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable		576			18			(66	)		95
Inventories		(6,372	)		(1,827	)		(19,104	)		(1,867	)
Prepaid expenses and deposits		(323	)		(1,019	)		(150	)		(1,566	)
Long term deposits		(5	)		(5	)		(14	)		(14	)
Increase (decrease) in:
Accounts payable		(724	)		1,286			(1,251	)		337
Payroll and related taxes payable		---			---			(1,562	)		---
Accrued expenses		3,409			(106	)		4,173			329
Accrued interest expense		(26	)		292			(256	)		292
Net cash provided (used) by operating activities		16,525			(7,158	)		2,987			(13,603	)

CASH FLOWS FROM INVESTING ACTIVITIES
?Restricted cash		---			---			---			(7,500	)
??? ?Purchase of plant and equipment, including construction in process		(5,175	)		(43,305	)		(19,844	)		(74,681	)
Increase in reclamation and remediation investment		---			??????????????????? ---			---			(2,090	)
Net cash used by investing activities		(5,175	)		(43,305	)		(19,844	)		(84,271	)

CASH FLOWS FROM FINANCING ACTIVITIES
Loan payable		---			51,108			9,876			51,108
Deferred debt issuance costs		---			(2,470	)		---			(3,320	)
Common stock issued for cash		---			---			---			59,191
Exercise of options to purchase common stock		15			408			687			909
Exercise of warrants to purchase common stock		---			705			338			2,521
Net cash provided by financing activities		15			49,751			10,901			110,409

Change in cash		11,365			(712	)		(5,956	)		12,535

Cash and cash equivalents, beginning of period		26,549			18,750			43,870			5,503

Cash and cash equivalents, end of period	$	37,914		$	18,038		$	37,914		$	18,038

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid	$	(693	)	$	(457	)	$	(2,982	)	$	(457	)

NON-CASH FINANCING AND
INVESTING ACTIVITIES:
Stock, options and warrants issued for services	$	417		$	662		$	1,075		$	1,950
Equipment purchases included in accounts payable	$	(18	)	$	(9,094	)	$	316		$	2,738
Deferred debt issuance costs included in accrued expenses	$	---		$	(2,329	)	$	---		$	---
Non-cash component of inventories	$	422		$	---		$	1,623		$	---

For further details, please visit www.westerngoldfields.com, or contact:
Raymond Threlkeld
Chief Executive Officer
(416)-324-6005

Brian Penny
Chief Financial Officer
(416)-324-6002

Hannes Portmann
Director, Corporate Development and Investor Relations
(416)-324-6014