U.S. Securities And Exchange Commission
                             Washington, D.C. 20549

                                   Form 10QSB

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange Act
of 1934 for the quarterly period ended October 31, 1997

                         Commission file number 0-20722

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

            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  December  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 -
                  October 31, 1997............................................1

             Statements of Operations -
                  Three months ended October 31, 1997 and September 30, 1996..2

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

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

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

PART II. Other information


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

<PAGE>
                                  NEWGOLD, INC.

                            Statements of Operations

                                   (Unaudited)

                           For the three months ended

                                                     October 31     September 30
                                                        1997            1996
                                                    ------------    ------------
Sales
         Net sales                                  $     -         $     -    
         Cost of sales                                    -               -

                               Gross Margin               -               -

Operating expenses
         General and administrative expenses           313,736         177,871
         Exploration costs                              48,173          63,107

                   Total operating expenses            361,909         240,978

                       Loss from operations           (361,909)       (240,978)

Other income (expense)
         Interest income                                                   478
         Interest expense                               (9,917)         (1,647)
         Loss on disposal of assets                   (151,171)

                        Total other expense           (161,088)         (1,169)

Income tax provision                                      -               -

Net loss                                            $ (522,997)     $ (242,147)

Loss per share                                         ($0.028)        ($0.020)

Weighted average number of shares outstanding         18,961,839     12,000,000




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<PAGE>
                                  NEWGOLD, INC.

                                  Balance Sheet

                                   (Unaudited)

                                October 31, 1997

                                       Assets

Property, plant and equipment including undeveloped
  mineral properties of $4,472,681 net of $36,453
  accumulated depreciation                                       $  4,436,228
Reclamation bonds                                                     256,500
Other assets                                                            2,718

       Total assets                                              $  4,695,446


                       Liabilities and Stockholder's Equity

Current liabilities
  Bank overdraft                                                 $     56,324
  Accounts payable                                                    532,720
  Accrued expenses                                                     95,644
  Accrued reclamation costs                                            25,000
  Due to affiliate                                                     89,021
  Notes payable                                                       317,500
  Shareholder loan                                                    165,000

       Total current liabilities                                    1,281,209

Deferred revenue                                                      800,000

       Total liabilities                                         $  2,081,209

Stockholders' equity
  Common stock - Authorized 50,000,000 shares par
    value $0.001; 18,961,839 and 12,000,000 outstanding
    at October 31, 1997 and September 30, 1996, respectively            18,962
  Additional paid-in capital                                         7,144,522
  Accumulated deficit                                               (4,549,247)

       Total stockholders' equity                                    2,614,237

       Total liabilities and stockholders' equity                $   4,695,446


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<PAGE>
<TABLE>
<CAPTION>
                                  NEWGOLD, INC.

                            Statements of Cash Flows

                                   (Unaudited)

                           For the three months ended

                                                          October 31,1977    September 30, 1996
                                                         ------------------  ------------------
<S>                                                      <C>                 <C>
Cash flows from operating activities
         Net loss                                            $  (522,997)       $  (242,147)
         Adjustments to reconcile net loss to net cash
         used in operating activities
                               Depreciation                        9,051              1,126
         Changes in operating assets and liabilities
                          Reclamation bonds                                          10,000
                               Other assets                        3,454             19,868
                           Accounts payable                       83,179             42,867
                           Accrued expenses                       33,007              8,333

                 Total adjustments to net loss                   128,691             82,194

                 Net cash used by operations                    (394,306)          (159,953)

Cash flows from investing activities
         Net book value of aircraft sold                         518,671
         Capital expenditures                                   (137,071)           (20,987)

                 Net cash used in investing activities           381,600            (20,987)

Cash flows from financing activities
         Net advances from affiliate                              (5,685)             5,219
         Net reduction in notes payable                          (67,500)              -
         Increase in deferred revenue                                               200,000

                 Net cash provided by financing activities       (73,185)           205,219

                 Net increase (decrease) in cash                 (85,891)            24,279

Cash and cash equivalents, beginning of period                    29,567             46,318

Cash and cash equivalents, end of period                     $   (56,324)       $    70,597
</TABLE>



                                       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
         nd 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



                                       4
<PAGE>
         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.       Sale of Equipment:  The Company  negotiated a sale lease back agreement
         for the Commander  aircraft on September 4, 1997. Under this agreement,
         the Company sold the  Commander for $250,000 with an option to buy back
         the  aircraft for  $290,000 in  September  1998.  The Company will make
         twelve monthly  interest  payments of $3,141 in the interim.  A loss on
         sale of $143,158 was recorded.

         The  Company  sold the Cessna P210 for  $117,500 on October 1, 1997.  A
         loss on the sale of $8,013 was recorded.




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

         Introduction.
         -------------
                  The Company is engaged in the business of  acquiring  dormant,
potential gold-producing properties located in the continental United States and
developing such properties into a commercial gold mining operation.  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  $500,000 to begin
production at its Mission Mine and approximately $400,000 for exploration at its
Bruner  property.  The  Company  expects  to close two  financing  plans  during
mid-September  which  include a working  capital loan of $1.5 million for Relief
Canyon mine  production  and an off-shore  placement  of a stock  offering for a
minimum  of $1  million  with a cap  of $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



                                       5
<PAGE>
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") and upon a significant  increase in the price
of gold. The Company anticipates issuance of the permits before the end of April
1998. 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 is unsure
at this  point in time how the cost  for the bond  will be  distributed  between
itself and the State of Nevada Bond Pool. The company  anticipates  this expense
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.

                  The company has  completed  its review of the Mission Mine and
at this time  feels  that the  expense  to bring  this mine into  production  at
current  gold prices is not  ecnomically  feasable and  therefore  has chosen to
terminates its purchase contract for this property

                  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



                                       6
<PAGE>
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 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  totalling  $20,000;  the Company is
waiting for funds to complete the transaction.



                                       7
<PAGE>
                  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.



ITEM 4.  Matters Submitted to a Vote of Security Holders.

                           None.

ITEM 5.  Other Information.

                           None.

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



                                       8
<PAGE>

                 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.

                    A current  report  was filed on March  12,  1997,  to
                    announce the  approval of the Plan of  Reorganization
                    by the  U.S.  Bankruptcy  Court  and  the  merger  of
                    Newgold,   Inc.,  a  Nevada   corporation,   And  the
                    Registrant on November 21, 1996.








                                       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: December 12, 1997
--------------------
A. Scott Dockter
Chief Executive Officer


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







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