U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)

  X   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
      OF 1934 For the quarterly period ended July 31, 1997.

      TRANSITION  REPORT  UNDER  SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the
      transition period from _____ to _____.

                                  NEWGOLD, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its chapter)

           Delaware                                         16-1400479
-------------------------------                  -------------------------------
(State or other jurisdiction of                  (IRS Employer
 incorporation or organization)                              Identification No.)
                                                 

                  5190 Neil Road, Suite 320, Reno, Nevada 89502
                  ---------------------------------------------
                    (Address of principal executive offices)

                                 (702) 823-4000
                           ---------------------------
                           (Issuer's telephone number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.   Yes X No
                                                               ---  ---

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by court.  Yes X No
                                                ---  ---

The number of shares of Common Stock outstanding as of September 1, 1997: 
     18,961,839
     ----------

Transitional Small Business Disclosure Format (check one):     Yes   No X
                                                                  ---  ---
<PAGE>
PART I.  Financial Information.

         1.  Interim Financial Statements (unaudited)

             Balance Sheet -
                      July 31, 1997..........................................1

             Statements of Operations -
                      Three months ended July 31, 1997 and June 30, 1996.....2

             Statements of Cash Flows -
                      Three months ended July 31, 1997 and June 30, 1996.....3

             Notes to Financial Statements...................................4

         2.  Management's Discussion and Analysis............................5

PART II. Other information

             Signatures.....................................................10

























<PAGE>
                                  NEWGOLD, INC.

                                  Balance Sheet

                                   (Unaudited)

                                  July 31, 1997



Cash                                                         $         29,567


Property, plant and equipment including undeveloped
  mineral properties of $4,891,359 net of $64,480
  accumulated depreciation                                          4,826,879
Reclamation bonds                                                     256,500
Other assets                                                            6,172

                                      Total assets           $      5,119,118
                                                                    =========


                             Liabilities and Stockholder's Equity

Current liabilities
   Accounts payable                                          $        449,541
   Accrued expenses                                                    62,637
   Accrued reclamation costs                                           25,000
   Due to affiliate                                                    94,706
    Notes payable                                                     385,000
   Shareholder loan                                                   165,000

                   Total current liabilities                        1,181,884

Deferred revenue                                                      800,000

                                 Total liabilities                  1,981,884

Stockholders' equity
  Common stock - Authorized 50,000,000 shares par
        value $0.001; 18,961,839 and 12,000,000 outstanding
     at July 31, 1997 and June 30, 1996, respectively                 18,962
  Additional paid-in capital                                       7,144,522
  Accumulated deficit                                             (4,026,250)

                 Total stockholders' equity                        3,137,234

                 Total liabilities and stockholders' equity  $     5,119,118
                                                                   =========
                                       1

<PAGE>
                                  NEWGOLD, INC.

                            Statements of Operations

                                   (Unaudited)

                                                 For the three months ended

                                             July 31, 1997         June 30, 1996

Sales
  Net sales                                   $      -            $      -
  Cost of sales                                      -                   -

          Gross Margin                               -                   -

Operating expenses
  General and administrative expenses            504,207              21,521
  Exploration costs                               74,467              49,144


          Total operating expenses               578,674              70,665
                                                ---------           ---------

          Loss from operations                  (578,674)            (70,665)

Other income (expense)
  Interest expense                               (15,688)

          Total other expense                    (15,688)

Income tax provision                                 -                   -

Net loss                                      $ (594,362)         $  (70,665)
                                                =========           =========

Loss per share                                   ($0.032)            ($0.007)
                                                 ========            ========

Weighted average number of shares outstanding 18,779,230          10,649,575
                                              ===========         ===========

                                       2

<PAGE>
                                  NEWGOLD, INC.

                            Statements of Cash Flows

                                   (Unaudited)

                                                 For the three months ended

                                             July 31, 1997         June 30, 1996

Cash flows from operating activities
  Net loss                                   $   (594,362)         $    (70,665)
                                              ------------          ------------
  Adjustments to reconcile net loss to net cash
  used in operating activities
    Depreciation                                   22,088                   393
  Changes in operating assets and liabilities
    Reclamation bonds                                                    30,000
    Other assets                                   10,408                   -
    Accounts payable                               12,348                16,309
    Accrued expenses                              (23,748)               (1,718)
                                              ------------          ------------

       Total adjustments to net loss               21,096                44,984
                                              ------------          ------------

       Net cash used by operations               (573,266)              (25,681)

Cash flows from investing activities
  Capital expenditures                           (131,657)               13,654
                                              ------------          ------------

        Net cash used in investing activities    (131,657)               13,654

Cash flows from financing activities
    Net advances from affiliate                     8,079               275,671
    Deferred revenue                              300,000                   -
    Proceeds from short-term loan                  60,000                   -
    Net proceeds from stockholder loan             (5,000)                  -
    Net reduction of debt converted to equity         -                (221,625)
    Proceeds from sale of stock                   200,000                   -
                                              ------------          ------------

        Net cash provided by financing activities 563,079                54,046
                                              ------------          ------------

        Net increase (decrease) in cash          (141,844)               42,019

Cash and cash equivalents, beginning of period    171,411                 4,299
                                              ------------          ------------

Cash and cash equivalents, end of period      $    29,567           $    46,318
                                              ===========           ============

                                       3

<PAGE>
NEWGOLD, INC.
NOTES TO FINANCIAL STATEMENTS       
-----------------------------

1.   Preparation of Interim  Financial  Statements:  The accompanying  financial
     statements have been prepared in accordance  with the  instructions to Form
     10-QSB  and,  therefore,  do not  include  all  information  and  footnotes
     necessary for a presentation of financial  position,  results of operations
     and cash flows in conformity with generally accepted accounting principles.
     In the opinion of management,  the referenced  financial statements reflect
     all normal and recurring  adjustments  necessary for a fair presentation of
     the results of operations  and financial  position for the interim  periods
     presented.  Operating  results  for the three month  period  ended July 31,
     1997,  are not  necessarily  indicative of the results that may be expected
     for the fiscal year ended January 31, 1998.

     For  further  information,  see  the  financial  statements  and  footnotes
     included in the  Company's  Annual  Report on Form 10-KSB for the  thirteen
     months ended January 31, 1997.

2.   Income  Taxes:  No  income  tax  provisions  have  been  made due to losses
     incurred.  Deferred income tax benefits have been fully reserved due to the
     uncertainty of future realization.

3.   Net (Loss) Per share:  Net (loss) per share has been  computed on the basis
     of the weighted average number of shares outstanding during the period.

4.   Reclamation of Mining Areas:  Reclamation  costs,  including the removal of
     production  facilities at the end of their useful lives,  are estimated and
     accrued on an undiscounted  basis over the productive  lives of properties.
     Remediation   costs  are  expensed  when  the  liability  is  probable  and
     estimable. Based on current environmental regulations and known reclamation
     requirements,   management   has  included  its  best   estimate  of  these
     obligations in it reclamation accruals.  However, it is reasonably possible
     that the Company's estimates of its ultimate reclamation  liabilities could
     change as a result of changes in regulations or cost estimates. The Company
     performs concurrent  reclamation to the extent possible.  However,  most of
     the  accrued  costs are  anticipated  to be expended at the end of the mine
     life.

5.   Royalty  Agreement:  During July, 1997, Repadre  International  Corporation
     purchased for $300,000 a 1.5% royalty on the net proceeds,  after smelting,

                                       4

<PAGE>
     from the  production of the Relief Canyon Mine.  The $300,000  received has
     been recorded as deferred revenue.

6.   Stock Transactions:  Repadre International  Corporation,  under an Offshore
     Securities Subscription Agreement as defined by Regulation S under the U.S.
     Securities Act of 1933,  purchased  200,000 units from Newgold at $1.00 per
     unit. A unit is defined as one share of stock and  one-half a warrant.  The
     Company issued Repadre 200,000 shares of stock.  The warrant allows Repadre
     to purchase up to 100,000 shares of Company stock on or before September 8,
     1998 at an exercise price of $1.00 per share.  The Company has recorded the
     $200,000 received in the equity section of the balance sheet.

7.   Sale of Equipment:  The Company borrowed $60,000 from Repadre International
     Corporation  using its aircraft as  collateral.  Subsequent  to the balance
     sheet date,  the Company  executed a sale  lease-back of the aircraft.  The
     $250,000  proceeds  were  applied  to repay the above  note and to  provide
     interim  operating  capital  pending  the  closing  of other  financing  in
     progress.  The lease term is for one year,  requires  monthly  payments  of
     $3,141  beginning  October  1,  1997  and has a  re-purchase  provision  of
     $290,000 which may be exercised at any time during the lease term.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
        ------------------------------------

Introduction.
-------------
     The Company is engaged in the  business of acquiring  dormant,  potentially
gold-producing   properties   located  in  the  continental  United  States  and
developing such properties into commercial gold mining operation. The Company is
currently  developing or exploring its three  properties:  (1) the Relief Canyon
Mine,  located in Pershing  County,  Nevada;  (2) the Mission  Mine,  located in
Riverside  County,  California;  and (3) the  Bruner  Property,  located  in Nye
County,  Nevada.  The Company is the result of a merger (the  "Merger")  between
Warehouse Auto Centers, Inc., a Delaware corporation ("WAC"), and Newgold, Inc.,
a Nevada corporation ("NGNV"), pursuant to a Plan of Reorganization (the "Plan")
approved  by the U.S.  Bankruptcy  Court for the  Western  District of New York,
effective as of November 21, 1996. For accounting  purposes,  under the terms of
the Merger, NGNV has been treated as the acquirer.

Financial Plan of Operation for the Next Twelve Months.
-------------------------------------------------------
     As of July 31, 1997,  the Company had $29,567 in cash and  ($1,062,178)  in
working  capital.  Current plans and  assumptions  relating to  operations  will
require  approximately $2 million in additional  funding to complete  permitting
and to begin operations and gold production at its Relief Canyon Mine.  Further,
the Company will need approximately

                                       5

<PAGE>
$500,000 to begin production at its Mission Mine and approximately  $400,000 for
exploration at its Bruner  property.  The Company is pursuing a working  capital
loan of $1.5 million for Relief Canyon mine  production  and an off-shore  stock
financing of up to $3 million.  Further,  the Company is  investigating a credit
line of $2 million,  through  multiple  sources,  for putting Relief Canyon into
production.  There  can be no  assurance  that any of these  opportunities  will
result in actual funding, or that additional  financing will be available to the
Company, when needed, on commercially reasonable terms. If the Company is unable
to obtain additional  financing,  it will be required to curtail its development
plans and cease its  operations.  The  Company's  independent  accountants  have
included an  explanatory  paragraph in their report on the  Company's  financial
statements  for  the  thirteen   months  ended  January  31,  1997,   indicating
substantial doubt about the Company's ability to continue as a going concern.

     At the Relief Canyon Mine,  the Company  intends to begin  operations  upon
approval of its Plan of Operations,  an  environmental  assessment by the Nevada
Department of Environmental  Protection and final approval by the Bureau of Land
Management ("BLM") . The Company anticipates  issuance of the permits before the
end  of  September  1997.  In  addition,  the  Company  must  post  an  $888,000
reclamation  bond and has filed its  application  with the State of Nevada  Bond
Pool. The Company anticipates that its initial contribution for the bond will be
$145,000 with the remaining $743,000 balance provided by the Bond Pool, of which
there can be no certainty of  acceptance.  The recovery  facilities are complete
with the  exception  that an  additional  leach  pad will need to be built at an
approximate  cost of $200,000  and  approved by the State of Nevada and the BLM.
Mining  and  loading  the new pad with  processed  ore will be  accomplished  by
third-party  contractors.  The Company has  allocated $1 million for  contractor
mobilization and operation for the initial 90 days with $655,000 held in reserve
for possible  contingencies.  The Company has  personnel in place to operate the
leach system recovery  facility.  The Company intends to have analyses completed
by an independent engineering firm to establish proven and probable reserves for
the Relief Canyon claims based upon the exploration data collected during 1997.

     At Mission Mine,  the Company has allocated  $500,000 for  mobilization  of
contractors  to begin  operation at the Mission Mine.  In addition,  the Company
intends to engage third-party  contractors to complete approximately $200,000 in
renovations to the production  shaft of the existing  mine,  make  approximately
$50,000 in  improvements to the road to the mine and develop a Plan Of Operation
with an anticipated cost of $150,000. The Company has also allocated $100,000 to
possible  contingencies.  The Company  anticipates mining will begin in the next
twelve months using  contractors and ore will be processed at existing  off-site
mills.

     Under the terms of an option  agreement with Miramar Mining Company,  dated
November 18, 1996,  relating to the Bruner  property,  the Company will complete
20,000 feet of  exploration  drilling in the next fourteen  months.  The company
expects to spend approximately  $400,000 for exploration by drilling contractors
and $80,000 for maintenance costs of the property.

                                       6

<PAGE>
     This report,  as well as certain of the notes to the financial  statements,
contain  "forward-looking  statements"  within the meaning of Section 27A of the
Securities Exchange Act of 1934, as amended.  Such statements  include,  but are
not  limited  to,  (i)   expectations  as  to  the  funding  of  future  capital
expenditures  and  other  cash  needs,  (ii)  statements  as  to  the  projected
development  of certain ore deposits,  including  estimates of  development  and
other capital costs and financing plans with respect thereto, (iii) estimates of
future costs and other  liabilities for certain  environmental  matters and (iv)
statements  as to the  likelihood of the outcome of  litigation  matters.  These
forward-looking statements are subject to risks, uncertainties and other factors
that could cause actual results to differ  materially  from the  forward-looking
statements  or  the  results   projected  or  implied  by  the   forward-looking
statements.

     The amount and timing of future capital expenditures could be influenced by
a number of factors,  including  the timing of receipt of necessary  permits and
other governmental approvals, the failure of equipment,  processes or facilities
to operate in accordance with  specifications  and expectations,  labor disputes
and  unanticipated  changes in mine plans. The funding of such  expenditures and
other cash needs will be  affected  by the level of cash flow  generated  by the
Company,  if any,  and the  ability of the  Company to  otherwise  finance  such
expenditures,  which in turn could be affected by general U.S. and international
economic and  political  conditions,  political  and economic  conditions in the
country in which the  expenditure  is being  made,  a well as  financial  market
conditions.

     The  development  of certain ore deposits could be affected by, among other
things, labor disputes, delays in the receipt of or failure to receive necessary
governmental permit or approvals, changes in U.S. or foreign laws or regulations
or the interpretation, enforcement or implementation thereof, the failure of any
of the Company's joint venture  partners to perform as agreed under the relevant
agreements or any termination of any such agreements,  unanticipated  ground and
water conditions,  the failure of equipment,  processes or facilities to operate
in accordance with  specifications or expectations,  or delays in the receipt of
or the ability to obtain necessary financing.

     Future  environmental costs and liabilities could be impacted by changes in
U.S.  or foreign  laws or  regulations  or the  interpretation,  enforcement  or
implementation thereof and other factors beyond the control of the Company.

     For a more detailed  discussion of the  foregoing  risks and  uncertainties
affecting the Company and its operations, see "Cautionary Statement for Purposes
of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995." and "Risk  Factors"  contained  in Item 1 and 2 of the  Company's  annual
Report on Form 10-KSB for the period ended  January 31,  1997,  as well as other
filings made by the Company from time to time with the  Securities  and Exchange
Commission. Many of these factors are beyond the Company's ability to control or
predict.  Readers are  cautioned  not to put undue  reliance on  forward-looking
statements.  The

                                       7

<PAGE>
Company   disclaims   any  intent  or   obligation   to  update   publicly   any
forward-looking statements set forth in this discussion,  whether as a result of
new information, future events or otherwise.


PART II. OTHER INFORMATION.
         ------------------

ITEM 1.  Legal Proceedings.
         ------------------

     a) On December 3, 1996,  the case of  Christiansen  v.  Newgold,  et al., a
purported  breach of contract action was filed in the Second Judicial  District,
Washoe County, Reno, Nevada. Plaintiff alleges that he is owed $250,000 relating
to  recovery  of his  investment  with a property  subsequently  acquired by the
Company.  The Company believes that Plaintiff's claim is meritless and the claim
is being vigorously defended by counsel.

     b) On January 28, 1997, the case of Stewart v. Newgold,  a purported breach
of contract for the purchase of the Cerro Gordo Mine in California, was filed in
the Second Judicial District,  Washoe County, Reno, Nevada. Plaintiff was unable
to present clear title to the property and the Company was unable to clear title
and refused to make additional payments called for under the contract. Plaintiff
is seeking  $40,000 in  damages.  The  parties  have  reached an  agreement  for
settlement  totaling  $20,000;  the Company is waiting for funds to complete the
transaction.

     c) On April 25, 1997, the Company filed a declaratory  relief action in the
case of Newgold v. Wirsing,  et al. in the Sacramento County Superior Court. Mr.
Wirsing and his fellow defendant,  Mr. Wong, are each alleging that they are the
owners  of a 10% share of the net  profits  interest  from  Relief  Canyon.  The
Company  filed the action to seek  declaratory  relief that Messrs.  Wirsing and
Wong's claim is without merit. Mr. Wong has filed a $100,000,000  mechanics lien
on the Relief  Canyon Mine.  The Company  believes  that the use of a mechanics'
lien is  improper  and that  there is no merit in  Messrs.  Wirsing  and  Wong's
claims.  The case currently is in the discovery  stage.  However,  to the extent
that Messrs.  Wiring and Wong are successful,  it could have a material  adverse
effect on the Company.

ITEM 2.  Changes in Securities.
         ----------------------

                           None.


ITEM 3.  Defaults on Senior Securities.
         ------------------------------

                           None.

                                       8

<PAGE>
ITEM 4.  Matters Submitted to a Vote of Security Holders.
         ------------------------------------------------

                           None.

ITEM 5.  Other Information.
         ------------------

     On  September  8, 1997,  pursuant  to an Offshore  Securities  Subscription
Agreement,  Repadre  International  Corporation,  a non-U.S.  person,  purchased
200,000  units with a unit  defined as one share of Common  Stock with  one-half
warrant.  The  price per unit was  $1.00.  Repadre  was  issued  200,000  shares
("Shares") of the Company Common Stock and a warrant  ("Warrant") to purchase an
aggregate  100,000  shares of  Common  Stock  from  September  8,  1997  through
September  8, 1998 at an exercise  price of $1.00 per share.  The Shares and the
Warrant were issued  without  registration  under the Securities Act of 1933, as
amended (the "Act"), pursuant to Regulation S promulgated under the Act.

ITEM 6.  Exhibits and Reports on Form 8-K.

         a) Exhibits.

              Exhibit 3.1     Certificate of Incorporation of the Registrant (1)

              Exhibit         3.2   Certificate  of  Amendment  to
                              Certificate of  Incorporation of the
                              Registrant (2).

              Exhibit 3.3     Bylaws of the Registrant (1).

              Exhibit 27      Financial Data Schedule.

              (1)      Incorporated   by  reference   to  the   Registrant's
                       Registration   Statement   on  Form  SB-2  (File  No.
                       33-49920)  filed with the  Commission  on October 14,
                       1993.

              (2)      Incorporated by reference to the Registrant's  Annual
                       Report on Form  10-KSB-40  for the fiscal  year ended
                       January 31, 1996 filed with the Commission on January
                       22, 1997.

         b) Reports on Form 8-K.

                       None





                                       9
<PAGE>
                                   SIGNATURES


Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto authorized.


NEWGOLD, INC.


/s/ A. Scott Dockter                                    Date: September 12, 1997
--------------------
A. Scott Dockter
Chief Executive Officer


/s/ Robert W. Morris                                    Date: September 12, 1997
--------------------
Robert W. Morris
Chief Financial Officer

                                       10