EXHIBIT 10.3

                               SECURITY AGREEMENT
                         (All Personal Property Assets)


     THIS SECURITY AGREEMENT, dated as of November 5, 2003 (the "Agreement"),
between WESTERN MESQUITE MINES, INC., a corporation organized under the laws of
the State of Nevada and having an address of 7000 Independence Parkway, Suite
160 #135, Plano, Texas 75025 ("WMMI" or "Debtor"), and RMB INTERNATIONAL
(DUBLIN) LIMITED, a corporations organized under the laws of the Republic of
Ireland and having an address of 28 Shelbourne Road, Ballsbridge, Dublin 4
Ireland, and its agent, RMB RESOURCES LIMITED, a corporation organized under the
laws of England and having an address of Level 3, One Mitre Square, London EC3A
5AN, United Kingdom (collectively, the "Secured Party").

     WHEREAS, Debtor has entered into a Facility Agreement made November 5, 2003
(as amended and in effect from time to time, the "Facility Agreement"), with the
Secured Party, pursuant to which the Secured Party has agreed to make loans to
Debtor in accordance with the terms and conditions contained in the Facility
Agreement; and

     WHEREAS, WMMI and Calumet Mining Company, an Idaho corporation having an
address of 7000 Independence Parkway, Suite 160 #135, Plano, Texas 75025 ("CMC")
are wholly-owned subsidiaries of Western Goldfields, Inc., an Idaho corporation
having an address of 7000 Independence Parkway, Suite 160 #135, Plano, Texas
75025 ("WGI"); and

     WHEREAS, WGI and CMC have entered into a Deed of Guarantee and Indemnity
made November 5, 2003 (as amended and in effect from time to time, the
"Guarantee"), with the Secured Party, pursuant to which WGI and CMC have agreed
to perform all of the obligations of WMMI under the Facility Agreement in
certain events, including without limitation any default of WMMI's duties and
obligations under the Facility Agreement; and

     WHEREAS, the parties have entered into the Facility Agreement and Guarantee
in connection with Debtor's acquisition of the Mesquite Mine in Imperial County,
California; and

     WHEREAS, it is a condition precedent to the Secured Party's making any
loans to the Debtor under the Facility Agreement that the Debtor execute and
deliver to the Secured Party a security agreement in substantially the form
hereof; and

     WHEREAS, the Debtor wishes to grant a security interest in favor of the
Secured Party as herein provided;

     NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1.     DEFINITIONS.  All capitalized terms used herein without definitions shall
       -----------
have the meaning given to them in the Facility Agreement.  All terms defined in
the Uniform Commercial Code of Colorado (Colorado Revised Statutes Sec. 4-9-101
et seq., the "Code") and used herein shall have


<PAGE>
the same meanings in this Agreement as specified in the Code. However, if a term
is defined in Article 9 of the Code differently than in another Article of the
Code, the term shall have the meaning specified in Article 9. The term
"Obligations," as used herein, means all of the indebtedness, obligations and
liabilities of the Debtor to the Secured Party, individually or collectively,
whether direct or indirect, joint or several, absolute or contingent, due or to
become due, now existing or hereafter arising under or in respect of the
Facility Agreement, or any other instruments or agreements executed and
delivered pursuant thereto or in connection therewith, or this Agreement, and
shall specifically include all future advances made by the Secured Party for
taxes, levies, insurance and repairs to or maintenance of the Collateral. The
term "Default," as used herein, means the failure of the Debtor to pay or
perform any of the Obligations as and when due to be paid or performed under the
terms of the Facility Agreement or this Agreement, and shall include, without
limitation, those events of Default specified in Section 12 of the Facilities
Agreement.

2.     GRANT OF SECURITY INTEREST.  To secure the payment and performance in
       --------------------------
full of all of the Obligations, the Debtor hereby grants to the Secured Party a
security interest in and so pledges and assigns to the Secured Party the
following properties, assets and rights of the Debtor, wherever located, whether
now owned or hereafter acquired or arising, and all additions and accessions
thereto and all substitutions therefore, and all proceeds and products thereof
(all of the same being hereinafter called the "Collateral"):  all personal and
fixture property of every kind and nature including without limitation all goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts, deposit accounts, chattel
paper (whether tangible or electronic), letter-of-credit rights (whether or not
the letter of credit is evidenced by a writing), commercial tort claims (whether
pending now or arising in the future), securities and all other investment
property, supporting obligations, any other contract rights or rights to the
payment of money, insurance claims and proceeds, all general intangibles
(including all payment intangibles), and all as-extracted collateral. The
Secured Party acknowledges that the attachment of its security interest in any
future or additional commercial tort claim as original collateral is subject to
the Debtor's compliance with Section 4.7.  The Collateral shall specifically
include those items specifically identified on Exhibit A attached hereto and by
this reference incorporated herein; provided, however, that the identification
of specific Collateral on Exhibit A shall not be construed to exclude any
property, right or interest not specifically identified on Exhibit A, including
those hereafter acquired, from inclusion in the "Collateral" secured hereby.

3.     AUTHORIZATION TO FILE FINANCING STATEMENTS.  The Debtor hereby
       ------------------------------------------
irrevocably authorizes the Secured Party at any time and from time to time to
file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of the Debtor or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Code or the Uniform Commercial Code of any
other such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail; and (b) provide any other information required by Part 5 of
Article 9 of the Code, or the Uniform Commercial Code of any other such
jurisdiction, for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether the Debtor is an organization, the
type of organization and any organizational identification number issued to the
Debtor, and (ii) in the case of a financing statement filed as a fixture filing
or indicating Collateral as as-extracted collateral, a sufficient description of
real


<PAGE>
property to which the Collateral relates. The Debtor agrees to furnish any such
information to the Secured Party promptly upon the Secured Party's request. The
Debtor also ratifies its authorization for the Secured Party to have filed in
any Uniform Commercial Code jurisdiction any like initial financing statements
or amendments thereto if filed prior to the date hereof.

4.     OTHER ACTIONS.  To further the attachment, perfection and first priority
       -------------
of, and the ability of the Secured Party to enforce, the Secured Party's
security interest in the Collateral, and without limitation on the Debtor's
other obligations in this Agreement, the Debtor agrees, in each case at the
Debtor's expense, to take the following actions with respect to the following
Collateral:

     4.1.     PROMISSORY NOTES AND TANGIBLE CHATTEL PAPER.  If the Debtor shall
at any time hold or acquire any promissory notes or tangible chattel paper, the
Debtor shall forthwith endorse, assign and deliver the originals of the same to
the Secured Party, accompanied by such instruments of transfer or assignment
duly executed in blank as the Secured Party may from time to time specify.

     4.2.     DEPOSIT ACCOUNTS.  For each deposit account that the Debtor at any
time opens or maintains, the Debtor shall, at the Secured Party's request and
option, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (a) cause the depositary bank to comply at any time with
instructions from the Secured Party to such depositary bank directing the
disposition of funds from time to time credited to such deposit account, without
further consent of the Debtor; or (b) arrange for the Secured Party to become
the customer of the depositary bank with respect to the deposit account, with
the Debtor being permitted, only with the consent of the Secured Party, to
exercise rights to withdraw funds from such deposit account. The provisions of
this paragraph shall not apply to (i) any deposit account for which the Debtor,
the depositary bank and the Secured Party have entered into a cash collateral
agreement specially negotiated among the Debtor, the depositary bank and the
Secured Party for the specific purpose set forth therein; (ii) a deposit account
for which the Secured Party is the depositary bank and is in automatic control;
and (iii) deposit accounts specially and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of the
Debtor's salaried employees.

     4.3.     INVESTMENT PROPERTY.  If the Debtor shall at any time hold or
acquire any certificated securities, the Debtor shall forthwith endorse, assign
and deliver the same to the Secured Party, accompanied by such instruments of
transfer or assignment duly executed in blank as the Secured Party may from time
to time specify. If any securities now or hereafter acquired by the Debtor are
uncertificated and are issued to the Debtor or its nominee directly by the
issuer thereof, the Debtor shall immediately notify the Secured Party thereof
and, at the Secured Party's request and option, pursuant to an agreement in form
and substance satisfactory to the Secured Party, either (a) cause the issuer to
agree to comply with instructions from the Secured Party as to such securities,
without further consent of the Debtor or such nominee, or (b) arrange for the
Secured Party to become the registered owner of the securities.  If any
securities, whether certificated or uncertificated, or other investment property
now or hereafter acquired by the Debtor are held by the Debtor or its nominee
through a securities intermediary or commodity intermediary, the Debtor shall
immediately notify the Secured Party thereof and, at the Secured Party's request
and option, pursuant to an agreement in form and substance


<PAGE>
satisfactory to the Secured Party, either (i) cause such securities intermediary
or (as the case may be) commodity intermediary to agree to comply with
entitlement orders or other instructions from the Secured Party to such
securities intermediary as to such securities or other investment property, or
(as the case may be) to apply any value distributed on account of any commodity
contract as directed by the Secured Party to such commodity intermediary, in
each case without further consent of the Debtor or such nominee, or (ii) in the
case of financial assets or other investment property held through a securities
intermediary, arrange for the Secured Party to become the entitlement holder
with respect to such investment property, with the Debtor being permitted, only
with the consent of the Secured Party, to exercise rights to withdraw or
otherwise deal with such investment property. The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which the Secured Party is the securities intermediary.

     4.4.     COLLATERAL IN THE POSSESSION OF A BAILEE.  If any Collateral is at
any time in the possession of a bailee, the Debtor shall promptly notify the
Secured Party thereof and, at the Secured Party's request and option, shall
promptly obtain an acknowledgement from the bailee, in form and substance
satisfactory to the Secured Party, that the bailee holds such Collateral for the
benefit of the Secured Party, and that such bailee agrees to comply, without
further consent of the Debtor, with instructions from the Secured Party as to
such Collateral.

     4.5.     ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS.  If the Debtor
at any time holds or acquires an interest in any electronic chattel paper or any
"transferable record," as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, the Debtor shall promptly notify the Secured Party thereof and, at
the request and option of the Secured Party, shall take such action as the
Secured Party may reasonably request to vest in the Secured Party control, under
Section 9-105 of the Uniform Commercial Code, of such electronic chattel paper
or control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record.  The Secured Party agrees with the Debtor that the Secured
Party will arrange, pursuant to procedures satisfactory to the Secured Party and
so long as such procedures will not result in the Secured Party's loss of
control, for the Debtor to make alterations to the electronic chattel paper or
transferable record permitted under Section 9-105 of the Code or, as the case
may be, Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a
party in control to make without loss of control, unless a Default has occurred
and is continuing or would occur after taking into account any action by the
Debtor with respect to such electronic chattel paper or transferable record.

     4.6.     LETTER-OF-CREDIT RIGHTS.  If the Debtor is at any time a
beneficiary under a letter of credit, the Debtor shall promptly notify the
Secured Party thereof and, at the request and option of the Secured Party, the
Debtor shall, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (i) arrange for the issuer and any confirmer or other
nominated person of such letter of credit to consent to an assignment to the
Secured Party of the proceeds of the letter of credit, or (ii) arrange for the
Secured Party to become the transferee


<PAGE>
beneficiary of the letter of credit, with the Secured Party agreeing, in each
case, that the proceeds of the letter to credit are to be applied as provided in
the Facility Agreement.

     4.7     COMMERCIAL TORT CLAIMS.  If the Debtor shall at any time hold or
acquire a commercial tort claim, the Debtor shall immediately notify the Secured
Party in a writing signed by the Debtor of the particulars thereof and grant to
the Secured Party in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to the Secured Party.

     4.8.     OTHER ACTIONS AS TO ANY AND ALL COLLATERAL.  The Debtor further
agrees, at the request and option of the Secured Party, to take any and all
other actions the Secured Party may determine to be necessary or useful for the
attachment, perfection and first priority of, and the ability of the Secured
Party to enforce, the Secured Party's security interest in any and all of the
Collateral, including without limitation (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under
the Code, to the extent, if any, that the Debtor's signature thereon is required
therefor; (b) causing the Secured Party's name to be noted as secured party on
any certificate of title for a titled good if such notation is a condition to
attachment, perfection or priority of, or ability of the Secured Party to
enforce, the Secured Party's security interest in such Collateral; (c) complying
with any provision of any statute, regulation or treaty of the United States as
to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of the Secured Party to
enforce, the Secured Party's security interest in such Collateral; (d) obtaining
governmental and other third party waivers, consents and approvals in form and
substance satisfactory to Secured Party, including, without limitation, any
consent of any licensor, lessor or other person obligated on Collateral; (e)
obtaining waivers from mortgagees and landlords in form and substance
satisfactory to the Secured Party; and (f) taking all actions under any earlier
versions of the Uniform Commercial Code or under any other law, as reasonably
determined by the Secured Party to be applicable in the Code or the Uniform
Commercial Code of any other jurisdiction, including any foreign jurisdiction.

5.     RELATION TO OTHER SECURITY DOCUMENTS.  The provisions of this Agreement
       ------------------------------------
supplement the provisions of any real estate mortgage or deed of trust granted
by the Debtor to the Secured Party which secures the payment or performance of
any of the Obligations.  Nothing contained in any such real estate mortgage or
deed of trust shall derogate from any of the rights or remedies of the Secured
Party hereunder.  In addition to the provisions of this Agreement being so read
and construed with any such mortgage or deed of trust, the provisions of this
Agreement shall be read and construed with the other Security Documents referred
to below in the manner so indicated.  Concurrently herewith, the Debtor is
executing and delivering to the Secured Party a Pledge Agreement pursuant to
which WGI is pledging to the Secured Party all the shares of the capital stock
or other securities of WMMI and CMC.  Such pledge shall be governed by the terms
of such Pledge Agreement, and not by the terms of this Agreement.

6.     REPRESENTATIONS AND WARRANTIES CONCERNING DEBTOR'S LEGAL STATUS.  The
       ---------------------------------------------------------------
Debtor has previously or concurrently herewith delivered to the Secured Party a
certificate signed by the Debtor and entitled "Perfection Certificate" (the
"Perfection Certificate").  The Debtor represents and warrants to the Secured
Party as follows:  (a) the Debtor's exact legal name is that indicated on the
Perfection Certificate and on the signature page hereof; (b) the Debtor is an
Organization


<PAGE>
of the type, and is organized in the jurisdiction set forth in the Perfection
Certificate; (c) the Perfection Certificate accurately sets forth the Debtor's
organizational identification number or accurately states that the Debtor has
none; (d) the Perfection Certificate accurately sets forth the Debtor's place of
business or, if more than one, its chief executive office, as well as the
Debtor's mailing address, if different; (e) all other information set forth on
the Perfection Certificate pertaining to the Debtor is accurate and complete,
and (f) that there has been no change in any information provided in the
Perfection Certificate since the date on which it was executed by the Debtor.

7.     COVENANTS CONCERNING DEBTOR'S LEGAL STATUS.  The Debtor covenants with
       ------------------------------------------
the Secured Party as follows:  (a) without providing at least 30 days prior
written notice to the Secured Party, the Debtor will not change its name, its
place of business or, if more than one, chief executive office, or its mailing
address or organizational identification number if it has one; (b) if the Debtor
does not have an organizational identification number and later obtains one, the
Debtor shall forthwith notify the Secured Party of such organizational
identification number; and (c) the Debtor will not change its type of
organization, jurisdiction of organization or other legal structure.

8.     REPRESENTATIONS AND WARRANTIES CONCERNING COLLATERAL, ETC.  The Debtor
       ---------------------------------------------------------
further represents and warrants to the Secured Party as follows:  (a) the Debtor
is the owner of or has other rights in or power to transfer the Collateral, free
from any right or claim of any person or any adverse lien, security interest or
other encumbrance, except for the security interest created by this Agreement
and other liens permitted by the Facility Agreement, if any; (b) none of the
account debtors or other persons obligated on any of the Collateral is a
governmental authority covered by the Federal Assignment of Claims Act or like
federal, state or local statute or rule in respect of such Collateral; (c) the
Debtor holds no commercial tort claim except as indicated on the Perfection
Certificate; and (d) the Debtor has at all times operated its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances; (e) all other information set forth on the
Perfection Certificate pertaining to the Collateral is accurate and complete;
and (f) that there has been no change in any information provided in the
Perfection Certificate since the date on which it was executed by the Debtor.

9.     COVENANTS CONCERNING COLLATERAL, ETC.  The Debtor further covenants with
       ------------------------------------
the Secured Party as follows:  (a) the Collateral, to the extent not delivered
to the Secured Party pursuant to Section 4, will be kept at those locations
listed on the Perfection Certificate and the Debtor will not remove the
Collateral from such locations, without providing at least thirty days prior
written notice to the Secured Party; (b) the Debtor shall use the Collateral
exclusively in connection with Debtor's conduct of mining, leaching and
processing operations located at the Mesquite Mine in Imperial County,
California, and in connection with the marketing and sale of products derived
therefrom, except to the extent necessary to use the Collateral in other
locations in connection with such operations, marketing and sales, or except as
permitted by the Facility Agreement; (c) except for the security interest herein
granted and liens permitted by the Facility Agreement, if any, the Debtor shall
be the owner of or have other rights in the Collateral free from any right or
claim of any other person, lien, security interest or other encumbrance, and the
Debtor shall defend the same against all claims and demands of all persons at
any time claiming the same or


<PAGE>
any interests therein adverse to the Secured Party; (d) the Debtor shall not
pledge, mortgage or create, or suffer to exist any right of any person in or
claim by any person to the Collateral, or any security interest, lien or
encumbrance in the Collateral in favor of any person, other than the Secured
Party, except for liens permitted by the Facility Agreement, if any; (e) the
Debtor will keep the Collateral in good order and repair and will not use the
same in violation of law or any policy of insurance thereon; (f) as provided in
the Facility Agreement, the Debtor will permit the Secured Party, or its
designee, to inspect the Collateral at any reasonable time, wherever located;
(g) the Debtor will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement; (h)
the Debtor will continue to operate its business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances; and (i) the Debtor will not sell or otherwise dispose,
or offer to sell or otherwise dispose, of the Collateral or any interest therein
except for (i) sales of inventory and licenses of general intangibles in the
ordinary course of business, and (ii) so long as no Default has occurred and is
continuing, sales or other dispositions of obsolescent items of equipment
consistent with past practices, and any other dispositions permitted by the
Facility Agreement.

10.     INSURANCE.  The Debtor will obtain and maintain with financially sound
        ---------
and reputable insurers insurance of such types, in such amounts, and on such
terms, as shall be required by the Facility Agreement.

11.     COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
        ----------------------------------------------------------

     11.1.     EXPENSES INCURRED BY SECURED PARTY.  In the Secured Party's
discretion, if the Debtor fails to do so, the Secured Party may discharge taxes
and other encumbrances at any time levied or placed on any of the Collateral,
maintain any of the Collateral, make repairs thereto and pay any necessary
filing fees or insurance premiums. The Debtor agrees to reimburse the Secured
Party on demand for all expenditures so made. The Secured Party shall have no
obligation to the Debtor to make any such expenditures, nor shall the making
thereof be construed as the waiver or cure of any Default.

     11.2.     SECURED PARTY'S OBLIGATIONS AND DUTIES.  Anything herein to the
contrary notwithstanding, the Debtor shall remain obligated and liable under
each contract or agreement comprised in the Collateral to be observed or
performed by the Debtor thereunder. The Secured Party shall not have any
obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Secured Party of any payment
relating to any of the Collateral, nor shall the Secured Party be obligated in
any manner to perform any of the obligations of the Debtor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Secured Party in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled at
any time or times.  The Secured Party's sole duty with respect to the custody,
safe keeping and physical preservation of the Collateral in its


<PAGE>
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
such Collateral in the same manner as the Secured Party deals with similar
property for its own account.

12.     SECURITIES AND DEPOSITS.  The Secured Party may at any time following
        -----------------------
and during the continuance of a Default, at its option, transfer to itself or
any nominee any securities constituting Collateral, receive any income thereon
and hold such income as additional Collateral or apply it to the Obligations.
Whether or not any Obligations are due, the Secured Party may following and
during the continuance of a Default demand, sue for, collect, or make any
settlement or compromise which it deems desirable with respect to the
Collateral.  Regardless of the adequacy of Collateral or any other security for
the Obligations, any deposits or other sums at any time credited by or due from
the Secured Party to the Debtor may at any time be applied to or set off against
any of the Obligations then due and owing.

13.     NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
        --------------------------------------------------------------
COLLATERAL.  If a Default shall have occurred and be continuing, the Debtor
----------
shall, at the request and option of the Secured Party, notify account debtors
and other persons obligated on any of the Collateral of the security interest of
the Secured Party in any account, chattel paper, general intangible, instrument
or other Collateral and that payment thereof is to be made directly to the
Secured Party or to any financial institution designated by the Secured Party as
the Secured Party's agent therefor, and the Secured Party may itself, if a
Default shall have occurred and be continuing, without notice to or demand upon
the Debtor, so notify account debtors and other persons obligated on Collateral.
After the making of such a request or the giving of any such notification, the
Debtor shall hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Debtor as trustee
for the Secured Party without commingling the same with other funds of the
Debtor and shall turn the same over to the Secured Party in the identical form
received, together with any necessary endorsements or assignments.  The Secured
Party shall apply the proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Secured Party to
the Obligations, such proceeds to be immediately credited after final payment in
cash or other immediately available funds of the items giving rise to them.

14.     POWER OF ATTORNEY.
        -----------------

     14.1.     APPOINTMENT AND POWERS OF SECURED PARTY.  The Debtor hereby
irrevocably constitutes and appoints the Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of the Debtor or in the Secured Party's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on
behalf of the Debtor, without notice to or assent by the Debtor, to do the
following:

          (a)     upon the occurrence and during the continuance of a Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise dispose of or deal with any of the Collateral in such manner as is
consistent with the Code and as fully and completely as though the Secured Party
were the absolute owner thereof for all purposes, and to do, at the


<PAGE>
Debtor's expense, at any time, or from time to time, all acts and things which
the Secured Party deems necessary or useful to protect, preserve or realize upon
the Collateral and the Secured Party's security interest therein, in order to
effect the intent of this Agreement, all at least as fully and effectively as
the Debtor might do, including, without limitation, (i) the filing and
prosecuting of registration and transfer applications with the appropriate
federal, state, local or other agencies or authorities with respect to
trademarks, copyrights and patentable inventions and processes; (ii) upon
written notice to the Debtor, the exercise of voting rights with respect to
voting securities, which rights may be exercised, if the Secured Party so
elects, with a view to causing the liquidation of assets of the issuer of any
such securities; and (iii) the execution, delivery and recording, in connection
with any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with respect to such
Collateral; and

          (b)     to the extent that the Debtor's authorization given in Section
3 is not sufficient, to file such financing statements with respect hereto, with
or without the Debtor's signature, or a photocopy of this Agreement in
substitution for a financing statement, as the Secured Party may deem
appropriate and to execute in the Debtor's name such financing statements and
amendments thereto and continuation statements which may require the Debtor's
signature.

     14.2.     RATIFICATION BY DEBTOR.  To the extent permitted by law, the
Debtor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

     14.3.     NO DUTY ON SECURED PARTY.  The powers conferred on the Secured
Party hereunder are solely to protect its interests in the Collateral and shall
not impose any duty upon it to exercise any such powers.  The Secured Party
shall be accountable only for the amounts that it actually receives as a result
of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Debtor for any act or
failure to act, except for the Secured Party's own gross negligence or willful
misconduct.

15.     RIGHTS AND REMEDIES.  If a Default shall have occurred and be
        -------------------
continuing, the Secured Party, without any other notice to or demand upon the
Debtor, shall have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Code and any additional rights and remedies which may be
provided to a secured party in any jurisdiction in which Collateral is located,
including, without limitation, the right to take possession of the Collateral,
and for that purpose the Secured Party may, so far as the Debtor can give
authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom.  The Secured Party may in its discretion
require the Debtor to assemble all or any part of the Collateral at such
location or locations within the jurisdiction(s) of the Debtor's principal
office(s) or at such other locations as the Secured Party may reasonably
designate.  Unless the Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, the Secured
Party shall give to the Debtor at least five Business Days prior written notice
of the time and place of any public sale of Collateral or of the time after
which any private sale or any other intended disposition is to be made.  The
Debtor hereby acknowledges that five Business Days prior written notice of such
sale or sales shall be reasonable notice. In addition, the Debtor


<PAGE>
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Secured Party's rights and remedies hereunder,
including, without limitation, its right following a Default to take immediate
possession of the Collateral and to exercise its rights and remedies with
respect thereto.

16.     STANDARDS FOR EXERCISING RIGHTS AND REMEDIES.  To the extent that
        --------------------------------------------
applicable law imposes duties on the Secured Party to exercise remedies in a
commercially reasonable manner, the Debtor acknowledges and agrees that it is
not commercially unreasonable for the Secured Party:  (a) to fail to incur
expenses reasonably deemed significant by the Secured Party to prepare
Collateral for disposition or otherwise to fail to complete raw material or work
in process into finished goods or other finished products for disposition; (b)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of; (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove liens or encumbrances on or any adverse claims against
Collateral; (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists; (e) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature; (f) to contact other persons, whether
or not in the same business as the Debtor, for expressions of interest in
acquiring all or any portion of the Collateral; (g) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature; (h) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets; (i) to dispose of assets in
wholesale rather than retail markets; (j) to disclaim disposition warranties;
(k) to purchase insurance or credit enhancements to insure the Secured Party
against risks of loss, collection or disposition of Collateral or to provide to
the Secured Party a guaranteed return from the collection or disposition of
Collateral; (l) to the extent deemed appropriate by the Secured Party, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Secured Party in the collection or disposition of
any of the Collateral; or (m) do any other thing which is permitted by the terms
of the Facility Agreement.  The Debtor acknowledges that the purpose of this
Section 16 is to provide non-exhaustive indications of what actions or omissions
by the Secured Party would fulfill the Secured Party's duties under the Code or
other Colorado law, or the law of any other relevant jurisdiction, in the
Secured Party's exercise of remedies against the Collateral and that other
actions or omissions by the Secured Party shall not be deemed to fail to fulfill
such duties solely on account of not being indicated in this Section 16.
Without limitation upon the foregoing, nothing contained in this Section 16
shall be construed to grant any rights to the Debtor or to impose any duties on
the Secured Party that would not have been granted or imposed by this Agreement
or by applicable law in the absence of this Section 16.

17.     NO WAIVER BY SECURED PARTY, ETC.  The Secured Party shall not be deemed
        -------------------------------
to have waived any of its rights or remedies in respect of the Obligations or
the Collateral unless such waiver shall be in writing and signed by the Secured
Party.  No delay or omission on the part of the Secured Party in exercising any
right or remedy shall operate as a waiver of such right or remedy or any other
right or remedy.  A waiver on any one occasion shall not be construed as a bar
to or waiver of any right or remedy on any future occasion.  All rights and
remedies of the


<PAGE>
Secured Party with respect to the Obligations or the Collateral, whether
evidenced hereby or by any other instrument or papers, shall be cumulative and
may be exercised singularly, alternatively, successively or concurrently at such
time or at such times as the Secured Party deems expedient.

18.     SURETYSHIP WAIVERS BY DEBTOR.  The Debtor waives demand, notice,
        ----------------------------
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description.  With respect to
both the Obligations and the Collateral, the Debtor assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Secured Party may deem advisable.  The Secured Party
shall have no duty as to the collection or protection of the Collateral or any
income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 11.2.  The Debtor further waives any and all other
suretyship defenses.

19.     MARSHALING.  The Secured Party shall not be required to marshal any
        ----------
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising.  To the extent that it lawfully may, the Debtor hereby agrees that it
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Secured Party's rights and
remedies under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Debtor hereby
irrevocably waives the benefits of all such laws.

20.     PROCEEDS OF DISPOSITIONS; EXPENSES.  The Debtor shall pay to the Secured
        ----------------------------------
Party on demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by the Secured Party in protecting, preserving
or enforcing the Secured Party's rights and remedies under or in respect of any
of the Obligations or any of the Collateral.  After deducting all of said
expenses, the residue of any proceeds of collection or sale or other disposition
of the Collateral shall, to the extent actually received in cash, be applied to
the payment of the Obligations in such order or preference as the Secured Party
may determine or in such order or preference as is provided in the Facility
Agreement, proper allowance and provision being made for any Obligations not
then due.  Upon the final payment and satisfaction in full of all of the
Obligations and after making any payments required by Sections 9-608(a)(1)(C) or
9-615(a)(3) of the Code, any excess shall be returned to the Debtor.  In the
absence of final payment and satisfaction in full of all of the Obligations, the
Debtor shall remain liable for any deficiency.


<PAGE>
21.     OVERDUE AMOUNTS.  Until paid, all amounts due and payable by the Debtor
        ---------------
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, interest at the rate of interest set forth in the
Facility Agreement.

22.     GOVERNING LAW; CONSENT TO JURISDICTION.  THIS AGREEMENT SHALL BE
        --------------------------------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
COLORADO.  The Debtor agrees that any action or claim arising out of, or any
dispute in connection with, this Agreement, any rights, remedies, obligations,
or duties hereunder, or the performance or enforcement hereof or thereof, may be
brought in the courts of the State of Colorado or any federal court sitting
therein and consents to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon the Debtor by mail at the
address specified for notices in the Facility Agreement.  The Debtor hereby
waives any objection that it may now or hereafter have to the venue of any such
suit or any such court or that such suit is brought in an inconvenient court.

23.     WAIVER OF JURY TRIAL.  THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
        --------------------
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER, OR THE
PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.  Except as prohibited by law, the
Debtor waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.  The Debtor:  (a) certifies that neither the Secured Party nor any
representative, agent or attorney of the Secured Party has represented,
expressly or otherwise, that the Secured Party would not, in the event of
litigation, seek to enforce the foregoing waivers or other waivers contained in
this Agreement; and (ii) acknowledges that, in entering into the Facility
Agreement and the other Transaction Documents to which the Secured Party is a
party, the Secured Party is relying upon, among other things, the waivers and
certifications contained in this Section 23.

24.     MISCELLANEOUS.  The headings of each section of this Agreement are for
        -------------
convenience only and shall not define or limit the provisions thereof.  This
Agreement and all rights and obligations hereunder shall be binding upon the
Debtor and its respective successors and assigns, and shall inure to the benefit
of the Secured Party and its successors and assigns.  If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein.  The Debtor acknowledges
receipt of a copy of this Agreement.

     IN WITNESS WHEREOF, intending to be legally bound, the Debtor has caused
this Agreement to be duly executed as of the date first above written.


WESTERN MESQUITE MINES, INC.

By:  /s/ John P. Ryan
   -------------------------
Title:  Secretary
      ----------------------
Printed Name: John P. Ryan
             ---------------


<PAGE>




ACCEPTED:

RMB INTERNATIONAL (DUBLIN)
LIMITED


By: /s/ D. Coetzee                       By: /s/ S. Duplessis
   -------------------------------          -----------------
Title:  Authorized Signatory             Title: Authorized Signatory
      ----------------------                    --------------------
Printed Name: D. Coetzee                 Printed Name: S. Duplessis
             -----------                              -------------


RMB RESOURCES LIMITED, AGENT



By: /s/ Robert Gray
   ----------------
Title:  Director
      ----------
Printed Name: Robert Gray
             ------------


Western Goldfields, Inc. and Calumet Mining Company, Guarantors, hereby consent
and agree to the terms of the foregoing Security Agreement:

WESTERN GOLDFIELDS, INC.                 CALUMET MINING COMPANY


By:  /s/ John P. Ryan                    By:  /s/ John P. Ryan
   ------------------------------           -------------------------------
Title:  Secretary                        Title:  Secretary
      ---------------------------              ----------------------------
Printed Name: John P. Ryan               Printed Name: John P. Ryan
             --------------------                     ---------------------



<PAGE>