EXHIBIT 10.16

AGREEMENT  (THE "AGREEMENT")  BY  AND  AMONG  WESTERN  GOLDFIELDS,  INC.
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(HEREINAFTER REFERRED TO AS "WESTERN"), ON THE ONE HAND, AND ELECTRUM L.L.C. ON
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THE OTHER(HEREINAFTER  REFERRED  TO  AS "ELECTRUM");
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WHEREBY:

Pursuant  to  discussions  amongst  the parties, this Agreement memorializes the
agreement  whereby  Electrum  may  earn  the  right to acquire a 50% interest in
certain  mining  properties  located  in the Western United States as more fully
described  in  this  Agreement.  The  Properties  under  this  Agreement will be
hereinafter  collectively (and as the context may require) referred to either as
the  "Property",  "Properties",  "Project"  and/or  the  "Projects".

1.   MUTUAL  REPRESENTATIONS  AND  WARRANTIES.  Each of Electrum and Western and
     represent  and  warrant  to the other that as the date of signature of this
     Agreement  (the  "Effective  Date"):

     (a)  it  is  a company duly incorporated under the laws of the jurisdiction
          of  its incorporation, it is duly organized and validly existing under
          such  laws  and  is qualified to carry on business in the place of its
          incorporation;

     (b)  it  has full power and authority to carry on its business and to enter
          into  this  Agreement  and  any agreement or instrument referred to or
          contemplated by this Agreement and to carry out and perform all of its
          obligations  and  duties  hereunder;

     (c)  it  has  duly obtained all corporate authorizations for the execution,
          delivery  and  performance  of  this  Agreement  and  such  execution,
          delivery  and  performance  and  the  consummation of the transactions
          herein contemplated will not contravene any existing laws and will not
          conflict  with  or result in any breach of any covenants or agreements
          contained in, or constitute a default under, or result in the creation
          of  any  encumbrance,  lien  or  charge  under,  the provisions of its
          constituting  documents  or any shareholders' or directors' resolution
          or any indenture, agreement or other instrument whatsoever to which it
          is  a  party  or  by  which it is bound or to which it or the Property
          maybe  subject;

     (d)  this Agreement has been duly executed and delivered by it and is valid
          and  binding  upon  it  in  accordance  with  its  terms.

2.   WESTERN'S  REPRESENTATIONS  AND WARRANTIES. Western represents and warrants
     as  of  the  date  of  this  Agreement:

     (a)  It  is  in  current negotiations with Kennecott Exploration Company, a
          Delaware corporation, whose address is 224 N. 2200 W., Salt Lake City,
          Utah  84116-2921,  with  an office at 10861 North Mavinee Drive, Suite
          141,  Oro  Valley, AZ 85737; and that the subject of such negotiations
          is  that  Western  is  interested in obtaining


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          access  to  and  reviewing  Kennecott's  data  on various prospects to
          determine  whether  or not Western will conduct mineral exploration of
          these  prospects;

     (b)  It  is  in  current  negotiations  with  Newmont Mining Corporation, a
          Delaware  corporation,  whose  main offices are located in Denver, CO;
          and  that  the  subject  of  such  negotiations  is  that  Western  is
          interested  in  obtaining  access  to  and reviewing Newmont's data on
          various  prospects  to  determine  whether or not Western will conduct
          mineral  exploration  of these prospects; and further that Newmont has
          recently  offered  to Western all of its data on its mining properties
          located  in  California,  Utah, Arizona, and selectively in Nevada for
          evaluation  to  determine  whether or not Western will conduct mineral
          exploration  of  these  prospects;

     (c)  It  expects  to  complete agreements with Kennecott and Newmont within
          sixty  to  ninety  days  of the effective date of this agreement which
          will  grant  it access to the data covering the subject properties but
          their  can be no guarantee that such agreement(s) will be forthcoming;

     (d)  Except  as  may  be  set  forth  in  future  Addendums, the Properties
          reviewed  shall  be  free  and  clear  of  all  liens,  charges  and
          encumbrances,  recorded  or  to  the  best  of  Western's information,
          knowledge  and  belief,  unrecorded;

     (e)  To  the  best  of  Western's  knowledge, there shall be no outstanding
          pending  actions, suits or Properties affecting all or any part of the
          Properties,  nor  shall  there  be  any  basis  therefore.

     (f)  To the best of Western's knowledge, there shall exist no notices of an
          order  or  direction,  from  any  government  authorities  that  would
          constitute  an  Environmental  Liability in respect of the Properties.
          Environmental  Liability  shall mean any and all liabilities under any
          statute,  regulation, ordinance, order, directive, permit, contract or
          pursuant  to  any  court  order  or  judgment in respect of any prior,
          ongoing  or  future use of the Property, including without limitation,
          all  liabilities,  if  any,  in  respect of the proper abandonment and
          reclamation  of  the  Property  and related facilities and surrounding
          areas  of  any nature, all in accordance with applicable environmental
          regulations  or  requirements.

     (g)  The  Parties  acknowledge  that  prior  to  the Parties commencing any
          Exploration  activities,  they  will work together to: (i} conduct due
          diligence  as  may  be  necessary  in  order  to  verify to Electrum's
          satisfaction  that  the above Representations and Warranties regarding
          the  Projects  are  true,  correct and valid in all material respects;
          (ii)  subject  to  Section  5  b),  ensure that any rights or permits,
          including  but  not  limited  to  surface  rights, which are or may be
          necessary  in  order to commence exploration, have been made available
          and  have been properly granted, in the understanding that any permits
          that  are  necessary  as  of  or  after  the  Effective  Date shall be
          requested  by the Operator. The Parties hereto acknowledge that in the
          event  that  the surface rights necessary to commence exploration have
          not  yet  been granted, then the


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          first years' work commitment shall be extended in time accordingly. If
          the  necessary  surface  rights  are  not granted in order to commence
          exploration,  each  of  the  parties will have the option to terminate
          this  Agreement  with  respect  to  the specific area affected by such
          circumstance.  For greater clarity, "area affected" shall mean in this
          context  the  area  that  cannot  be  explored.

3.   FURTHER  REPRESENTATIONS  AND  WARRANTIES;  ACKNOWLEDGEMENT.  Western  and
     Electrum  acknowledge  and  agree  that  the  other  is  entering into this
     Agreement relying upon the representations and warranties made to it herein
     and,  the  correctness  of  each  such  representation  and  warranty  is a
     condition  upon  which  each party is entering into this Agreement, each of
     which  conditions  may be waived in whole or in part solely by the party in
     whose  favor  the  representation  and  warranty  is  made  and  all  such
     representations  and warranties shall survive the execution and delivery of
     this  Agreement  and  the  transactions  contemplated hereby and each party
     agrees  to  indemnify  and  hold  harmless the other from all loss, damage,
     cause,  action  or suits arising out of or in connection with any breach of
     any representation or warranty contained herein. Should there be a material
     breach  in  the  representations  and warranties of one of the parties, the
     other  party  would  have  the  option  to terminate this Agreement without
     obligation to complete the Initial Earn-in Obligations as set forth in this
     Agreement.

4.   TERMS  OF  THE  AGREEMENT;  EARN  IN  OBLIGATIONS

     Electrum  may  earn  a  50% interest in any, some, or all of the Properties
     (the  "Earn,  In")  by  undertaking  and  accomplishing  the  following:

     (a)  Providing the funding, professional staff, or a combination thereof on
          a  50/50 joint basis with Western to conduct an initial evaluation and
          due  diligence  study  of  each  subject  property  that is of initial
          interest  to  both  Western  and  Electrum.

     (b)  Work  Commitment. By entering into this Agreement, Electrum commits to
          funding  and completing one-half of Recommended Qualified Expenditures
          on  the  Property  as  may  be  recommended by the Technical Committee
          during  the initial and each subsequent phase of exploration, on those
          properties which have passed the initial evaluation and due diligence,
          and  on  which  further  exploration  expenditures  are  recommended.

     The  "Technical  Committee"  shall be initially composed of Tom Callicrate,
     Larry Buchanan, and Toby Mancuso. Upon the motion of either of the parties,
     the  Technical Committee may be expanded to include one other member of the
     choosing  of  Electrum,  and  one  other  member independent of each of the
     parties.

     "Recommended  Qualified  Expenditures"  will  be  defined  as  any physical
     exploration and overhead costs that are directly related to the project and
     as  are  recommended  by  the  Technical  Committee.


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     (c)  Pre-Feasibility  Study.  By  entering  into  this  Agreement, Electrum
          commits  to  completing  one-half of Expenditures required to bring to
          completion  a comprehensive Pre-Feasibility study on each Property for
          which  such  a  study  is  recommended  by  the  Technical  Committee.

     The  Study  shall  address  the  viability  of  placing  the  Property into
     production, in such form and detail and using such assumption as to mineral
     prices  as are customarily and reasonably done by major mining companies in
     North  America, and which are technically acceptable to major international
     lending  institutions, in determining the viability of mining projects such
     as  the  Property and shall include a reasonable assessment of the mineable
     mineral  reserves  and their amenability to milling, a complete description
     of  the  work,  equipment  and supplies required to bring the Property into
     production  and  the  estimated  cost  thereof, a description of the mining
     methods to be employed and a financial appraisal of the proposed operations
     supported  by  the  following  information:

          (i)  description  of  that  part  of the Property to be covered by the
               proposed  mine;

          (ii) the  estimated recoverable reserves of minerals and the estimated
               composition  and  content thereof, including the effect of grade,
               dilution  and  impurities;

          (iii)  the  proposed procedure for development, mining and production;

          (iv) results  of  metallurgical  and  milling  amenability  tests.

          In  addition  to  the  above,  the  Study will also take the following
          information  into  account:

          (v)  the  nature  and extent of the facilities, if any, proposed to be
               acquired  which  may include mill, leach pads, CIP, SXEW or other
               Recovery  facilities, in which event the study shall also include
               a  preliminary  design  for  such  mill  or  facility,  and their
               proposed  site  locations,  if any, or appropriate provisions for
               custom  milling  facilities;

          (vi) the  total  costs, including capital budget, which are reasonably
               required  to  purchase,  construct  and  install  all structures,
               machinery and equipment required for the proposed mine, including
               a  schedule  of  timing  of  such  requirements;

          (vii) the results of all environmental impact studies for the Property
               and  costs  of  such  studies;

          (viii) working capital requirements for the initial four (4) months of
               operation  of the Property as a mine or such longer period as may
               be  reasonably  justified in the circumstances by the party doing
               the  Study;


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          (ix) estimates  of  shutdown  and  reclamation  costs;

          (x)  the  net  present  value  of  the  Property.

          In  order  to  conduct  the  Study,  the  parties  may form additional
          Sub-Committees,  under  the  direction  of the Technical Committee and
          which  will  assist  with  planning the exploitation of the resources.
          Each Sub-Committee will submit its work and proposals to the Technical
          Committee.  Decisions will be made by a majority of the members of the
          Technical Committee. It is the parties' understanding that the members
          of  such  Committee  shall  not  earn  compensation  for their role as
          members  of  the  same.

          It  is  the  parties' intent and understanding that, in order to carry
          out to completion the Project once the Earn-In has been achieved or at
          whatever other time the Parties shall agree to in writing, the parties
          shall  form  a  joint  venture vehicle (hereinafter referred to as the
          "Joint  Venture"  or  "Joint Venture Company") subject to the terms of
          this  Agreement. The terms and conditions of the Joint Venture will be
          established in separate document(s) as the parties may deem necessary,
          in which Electrum, LLC shall have a 50% o participation, and Western a
          50%  participation,  subject  to  the  terms  of  this  Agreement.

5.   OPERATOR.  Western  or Electrum may be the operator (the "Operator") of one
     or  more  of  the  Properties,  depending  on the decision of the Technical
     Committee.  The  Operator will be responsible for conducting all operations
     hereunder  in  accordance  with  the  following  provisions:

     (a)  Compliance  with  Laws. The Operator shall carry out its activities in
          compliance  with  all  applicable  Laws  and  with  the  terms  of the
          Properties  and  the  corresponding  surface  rights  agreements;

     (b)  Property and Surface Maintenance. During the Earn in Period and as may
          be  applicable,  The  Operator will pay or continue to pay any fees to
          previous  or  current  owners  or  surface  rights holders required to
          maintain  the Property in good standing. With respect to any taxes and
          rental  fees  paid  by  The  Operator,  any  such  costs paid shall be
          reimbursed  on  a  50%  o  basis  by  the  Non-Operator.

     (c)  Reports  and Other Required Submissions. As of the Effective Date, the
          Operator  shall  prepare  any  reports and other submissions as may be
          required  to  maintain the Property in good standing ensure the timely
          filing  thereof  with  any  appropriate  governmental  authorities,
          regulatory  agencies  or  associations  as  may  be  necessary.

     (d)  Encumbrances. The Operator shall not during the Earn in Period create,
          or  permit  to  be  created,  any  encumbrance  upon  or  against  the
          Properties  or  of  any  interest  therein,  or  any  portion thereof.


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     (e)  Conversion, Renewal etc, of Properties. During the Earn in Period, the
          Operator  shall,  in coordination with the Non-Operator, undertake the
          preparation  and making of all filings and/or satisfy all commercially
          reasonable requirements, as the case may be, to: (i) obtain extensions
          of  the  terms  of any of the exploration and/or exploitation licenses
          included  in  the  Properties (and to designate any lands that must be
          relinquished  as a condition thereof); (ii) apply for new (or renewal)
          of  exploration  Properties in the name of the Operator covering lands
          within  the  boundaries  of the Property if any such Properties' terms
          expire during the Earn In Period; (iii) apply for exploitation permits
          in  the name of the Operator with respect to any of such Properties as
          may  be necessary. All funds expended by Operator in carrying out such
          activities  shall  be included as Qualified Expenditures, and shall be
          reimbursed  on  a  50%  basis  by  the  Non-Operator.

     (f)  Insurance.  The  Operator  shall maintain liability insurance covering
          its  conduct  of  operations  of such types and in such amounts as are
          commonly  held  by  entities  conducting  activities  similar  to  the
          operations  conducted  hereunder.

6.   OBLIGATIONS  OF  NON-OPERATOR.  During the Earn in Period, the Non-Operator
     shall  comply  with  the  following  provisions:

     (a)  Acquisition  of  Additional Properties. Subject to sections 12 and 13,
          should  the  Technical Committee recommend acquisition of any property
          within  the  Area  of  Interest,  or  any  subdivision  thereof,  the
          Non-Operator  will be obligated to pay 50% of the acquisition costs of
          these  properties.

     (b)  Use of Non-Operator Facilities. Non-Operator shall permit the Operator
          to  utilize  Non-Operator surface facilities and the Operator shall be
          responsible  for  all  costs  associated  with these facilities with a
          portion  of  the  facilities  to  be retained for the exclusive use of
          Non-Operator. Costs and expenses related to maintaining the facilities
          should  be  borne  as  Qualified  Expenditures  for  both Electrum and
          Western  as  the  case  may  be.

     (c)  No  Encumbrances  by  Non-Operator.  Non-Operator shall not during the
          Earn  in  Period create, or permit to be created, any encumbrance upon
          or  against  the Properties or Non-Operator's interest therein, or any
          portion  thereof.

     (d)  Release  or Relinquishment of Properties by Non-Operator. Non-Operator
          shall  not  release  or  relinquish,  or  permit  the  release  or
          relinquishment,  of,  any  of the Properties without the prior written
          consent  of  the  Operator.

     (e)  No  actions  by  Non-Operator.  Non-Operator shall not take or fail to
          take  any  action which would cause the Operator to be denied the full
          use  of the rights of exploration and/or exploitation of the Property.

7.   FORWARDING  OF NOTICES. Western and Electrum shall each deliver promptly to
     the  other  any  notices that may be received from governmental entities or
     other  third parties which affect title to or the status of the Properties.


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8.   LEGAL  ACTIONS.  The  Operator  shall  immediately  inform  Non-Operator in
     writing with respect to any claim, suit or legal proceeding of which it has
     knowledge  and  which  could  prevent  or  limit the rights granted by this
     agreement.  The  Operator  assumes  the obligation to keep the Non-Operator
     free  and  harmless from any liability resulting from or caused by the acts
     or  omissions  of  Operator  related  to  the  foregoing.

9.   STANDARDS  OF  WORK.  During  the Earn in Period, the Operator shall ensure
     that  all  work done on the Property be done in accordance with good mining
     and  engineering  practices and Electrum and its contractors' activities in
     respect  of  the  Property  shall  be in all material respects performed in
     compliance  with  the applicable laws, regulations and orders of the United
     States  and  each  respective  State,  including, without limitation, those
     relating  to  environmental  matters,  such  as  but  not  limited to waste
     disposal  and  storage.  Operator  shall reclaim the Property in compliance
     with  all federal, state and local laws, rules, orders and regulations. The
     standards  of  safety  and reclamation hereunder will be in accordance with
     normal  operating  standards  as  determined  by  the  Technical Committee.

10.  RECLAMATION  OF  PREVIOUS  DISTURBANCES. Prior to commencing exploration on
     any Property, the Operator shall be responsible for conducting a base study
     report  detailing  previous work and disturbances on the Property which may
     be  subject to future reclamation (the "Disturbances") Such report shall be
     delivered to the Technical Committee that shall review and deliver the same
     to  the  Property  Owner  and  obtain  their  permission  to  reclaim  such
     Disturbances  at  their cost upon completion of exploration. Subject to the
     above,  and  in compliance with section 9 above, Operator shall reclaim the
     Disturbances  with  the  understanding  that  the  previous  owners  of the
     Property shall reimburse the Operator for such work. Once the Joint Venture
     is  formed, the Joint Venture shall assume responsibility for environmental
     matters  on  the  Property  as  may  be  required under applicable law. The
     reclamation  shall be in compliance with all federal, state and local laws,
     rules,  orders,  regulations,  directions  and  policies.

11.  ASSESSMENTS  AND  TAXES.  During the Earn in Period, Operator shall pay all
     taxes,  annual  license  fees,  rentals  and  assessments  related  to  the
     Property,  and  otherwise  maintain the Property in good standing and shall
     file  all relevant work performed on or in respect of the Property with the
     corresponding  registries  as  may be required. Non-Operator will reimburse
     Operator  50%  of such expenditures. The parties agree that for purposes of
     reimbursement  under  this  Agreement, NonOperator shall reimburse Operator
     within 30 calendar days after the corresponding reimbursement documentation
     and  receipts  have  been  presented  properly  filled  out  for  their
     reimbursement.

12.  AREA  OF INTEREST. The area extending 10 km in any.direction from the outer
     boundaries  of  the  Property  is  defined  as  the  "Area  of  Interest".

13.  ADDITIONAL  PROPERTY  ACQUISITION.  Prior  to  the  formation  of the Joint
     Venture  and  upon  recommendation  from  the  Technical  Committee,  any
     additional  mineral  or surface rights acquired within the Area of Interest
     described  above  by  either  party  shall  be  considered  as  Qualified
     Expenditures  and  be  reimbursable.  Once  the  Joint  Venture


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     is formed, and upon the recommendation of the Technical Committee, any such
     acquisitions  will  be  made  at  the  expense and in the name of the Joint
     Venture. If the Joint Venture should not have sufficient funds, then it may
     arrange  for the necessary financing, in which case the Joint Venture shall
     be  responsible  for any financial obligations therewith subscribed. In the
     event  that  it becomes necessary for each of the Joint Venture partners to
     put  up  additional  financial resources, section 21 will apply. Should the
     Joint  Venture not proceed, then Western may acquire from Electrum (or vice
     versa  as  the  case  may  be) at the other's sole discretion, any Property
     bought  individually by either party located within the Area of Interest at
     the cost of acquisition plus interest at the rate of 10% per annum plus the
     annual  rate  of  inflation reflected by United States Consumer Price Index
     for  the  corresponding  period.

14.  DROPPING  OF  PROPERTIES  OR  REDUCTION  IN  SIZE  OF  PROPERTIES.  Upon
     commencement  of  the  Joint  Venture, the Operator shall ensure that if it
     should  wish to have the Joint Venture reduce in size or abandon any of the
     lands  comprising  the  Property, it shall give the Non-Operator sixty (60)
     days'  prior  notice  of  its  intention to do so together with its written
     confirmation that all its reclamation obligations hereunder with respect to
     the area of Property to be reduced or abandoned, pursuant to the activities
     carried  out  by  Operator,  have  been  properly  and  fully  satisfied in
     accordance  with  this  Agreement,  and  Non-Operator  may  give  notice to
     Operator  within  such  60 day period electing to have such portions of the
     Property  which are being reduced and/or abandoned, remain, return to or be
     put in the name of the other (as the case may be), in which case and as may
     be  necessary  or  advisable  the  following  shall  apply:

     (a)  Operator  shall  forthwith  execute  and  deliver  to Non-Operator all
          necessary  documentation  as  may  be  applicable  to  relinquish  any
          interest  of  Operator,  and  Non-Operator shall incur the expenses in
          respect  of  any  fees  or  other  governmental  charges  which may be
          necessary  to  record  or  register any such transfers. Operator shall
          also  provideto  Non-Operator  all  material  information in Operator'
          possession  or  control  related  to  such  relinquishment;

     (b)  any  mining  Properties so transferred shall be in good standing as of
          the  date  of  Operator'  notice  of  its  intention to have the Joint
          Venture  abandon  such  mining  Properties,  and

     (c)  the  definition  of  the Property shall thereafter exclude such mining
          Properties  and  Operator  shall  have  no  further  obligations  or
          responsibilities  in  respect  of  such  mining Properties, except for
          obligations  and  responsibilities  arising  from  the Joint Venture's
          activities  prior  to the date such mining Properties were transferred
          to  Non-Operator;

     Provided,  however,  that  if  Non-Operator  does  not so elect or fails to
     respond  to  Operator's  notice  within  such  sixty  (60) day period, then
     Operator  may  abandon  or  reduce  in  size  or reduce in size such mining
     properties,  subject to applicable laws and any corresponding provisions of
     this  Agreement  shall  take  effect.


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15.  ACCESS  TO  THE  PROPERTY. Upon Operator assuming its role as Operator, Non
     Operator  will have access to the Property and right to review and copy raw
     data  collected by Operator. Non-Operator will share with Operator all data
     in  its  database and any new data generated independently. During the Earn
     in  Period,  Non-Operator  grants  Operator  right  of  way  in underground
     workings  and on the surface as the case may be and will not interfere with
     the  exploration.

16.  RELEASE OF INFORMATION. Electrum agrees to Western's release of information
     to  the  public  in  order  to  comply  with  United States' Securities and
     Exchange  Commission  or other regulatory agencies and market requirements,
     as  may  be provided for under law or as may be necessary or convenient for
     the purposes of informing Western's shareholders. Electrum will review such
     releases  before  they  are  made  public.

17.  APPLICABLE LAW. The parties submit themselves to the applicable laws of the
     States  in  which the properties are located, waiving their rights, if any,
     to  bring  any  claims  in  any  jurisdiction  other  than  the  applicable
     jurisdictions  and  forums  of  the  these  States.

18.  TERMINATION.  Electrum  may  terminate  this  Agreement at any time upon 60
     days'  prior  written  notice  to Western prior to the requirements of 4(a)
     above  being  met  on  any property. Electrum will be responsible for taxes
     incurred  (as  set  forth  in  Section 10), if any, for the period from the
     Effective  Date  up  to  and  including  such  termination.

     In the event that the Agreement is terminated by Electrum at any time after
     the  requirements  of section 4 b) have been met but prior to achieving the
     Earn In, then Electrum shall also not acquire any rights or interest in the
     Projects  whatsoever.

     In the event that the Agreement is terminated by Electrum at any time after
     the requirements of section 4 b) have been met and after achieving the Earn
     In  on  some  but  not  all properties, then Electrum shall not acquire any
     rights  or  interest  in  the  Projects  in  which it has not completed the
     earn-in, but shall be granted the interest enumerated below on the Projects
     in  which  it  has  completed  Earn  In.

     Once  the  Earn  In  has  been achieved, any termination hereunder shall be
     regulated  as  follows: (i) in the event the Joint Venture has been formed,
     by  the  corresponding  provisions applicable to the Joint Venture; (ii) if
     the  Joint  Venture has not yet been formed, termination shall be regulated
     by  the  first  paragraph of this Section 19, in the understanding that the
     sale  of  one party's participation hereunder to the other must be effected
     at  fair  market  value  and  in compliance with the right of first refusal
     granted  between  the  parties  and  provided  for in Section 21 b) of this
     Agreement.

19.  INDEMNIFICATION.  During  the  Earn in Period, Electrum shall indemnify and
     save  harmless  Western  and its directors, officers, employees, agents and
     insurers from and against all suits, claims, losses, penalties, demands and
     expenses (including reasonable legal fees) by reason of or derived from any
     gross negligence or willful misconduct by Electrum or its employees, agents
     or  contractors  in  relation  to its activities on the Property, including
     without  limitation those relating to its mining and exploration activities
     and  its  reclamation  obligations  and  any Disturbance thereon. Likewise,


                                        9
<PAGE>
     during  the  Earn  in  Period,  Western  shall  indemnify and save harmless
     Electrum  and  its directors, officers, employees, agents and insurers from
     and  against  all  suits,  claims,  losses, penalties, demands and expenses
     (including  reasonable  legal  fees) by reason of or derived from any gross
     negligence  or  willful  misconduct  by Western or its employees, agents or
     contractors  in  relation  to  its  activities  on  the Property, including
     without  limitation those relating to its mining and exploration activities
     and  its  reclamation  obligations  and  any  Disturbance  thereon.

20.  FORMATION  OF  THE  JOINT  VENTURE  COMPANY.  Upon  Electrum's  successful
     completion  of  the  Earn  In,  or  at whatever other time the Parties deem
     appropriate, but no later than or promptly after the time on which the Earn
     In  has  been  achieved, Electrum and Western shall proceed to form a Joint
     Venture  Company  whose  primary  purpose  shall  be the development of the
     Property  as  provided  for  in  the Study. For the formation of such Joint
     Venture,  each  party  will  transfer  and  assign as necessary any and all
     rights  inuring  under this Agreement for such purposes. General aspects of
     the  Joint  Venture  will  be  as  follows:

     (a)  INITIAL  CAPITALIZATION.  Each  party will make as its initial capital
          contribution  to  the  Joint Venture Company, the data and information
          resulting  from  the  Qualified  Expenditures and the Study during the
          Earn  in  Period  for the acquisition of its interest in the Property.
          When the Joint Venture Company is formed, the recognized initial total
          amount  of the combined capital contributions of the Parties shall be:
          Electrum  initial  share  ownership  of  50% and Western initial share
          ownership  of  50%. The parties may set the value of the contributions
          to  be,  made  hereunder,  as  soon  as  such  values  and figures are
          available.

     (b)  PROJECT  FINANCING; THIRD PARTY SALES. The Joint Venture company shall
          arrange  debt  and/or equity financing of the Project. For purposes of
          providing  the necessary guarantees that the banks may request for the
          debt  financing,  one party may provide such guarantees, in which case
          the other shall pledge in escrow its shares in the Joint Venture until
          successful  fulfillment  of  the  completion  tests that the banks may
          require.

          For the equity financing portion, the parties shall be responsible for
          contributing  financial  resources for their respective percentages of
          the  remaining  equity  financing.

          If  for  any reason either party should elect to sell to a third party
          all  or  a  portion  of  its equity in the Project, Western will grant
          Electrum  (or  vice versa as the case may be) a right of first refusal
          to  purchase such portion as it may elect to sell at fair market value
          and  under the same conditions and price that it would sell to a third
          party.  If  Electrum (or Western as the case may be) does not exercise
          its  right  of first refusal within 30 days as of the date it received
          written  notice from the other of its intention to sell,,, the selling
          party  will  be free to sell to a third party at a price not less than
          the  price offered to Western (or Electrum as the case may be), within
          120  days  after  non-acceptance.


                                       10
<PAGE>
     (c)  MINORITY  PROVISIONS  The  By-laws  of the Joint Venture Company shall
          establish  that  certain  resolutions,  and specifically on any of the
          matters  listed  below,  shall require the affirmative vote of either:
          (i) the shareholders representing at least 51% of the capital stock of
          the  Joint Venture Company in the case that any matters are brought to
          discussion at a Shareholder's Meeting; or (ii) the affirmative vote of
          at  least  51%  of  the members of the Board of Directors of the Joint
          Venture  Company  in  the  case  that  any such matters are brought to
          discussion  at  a  Board  of  Directors  Meeting. For purposes of this
          section,  the  matters  requiring  such  authorization are as follows:

          (i)       Disposal  of  assets  of  the Joint Venture Company having a
                    value  in  excess  of  $10,000,000  (exclusive of the mining
                    properties  as  to  which  a right of first refusal is to be
                    provided  in  the  Joint  Venture  Agreement).

          (ii)      Change  of  the nature or scope of the business of the Joint
                    Venture  Company.

          (iii)     Changes  to  the  dividend  policy set out in Section 21.e

          (iv)      Amendments  to  the  By-laws

          (v)       Following  commencement of commercial production, suspension
                    of  activities  for  a  period  of  more  than  six  months

          (vi)      Acquisition  of  shares  issued  by  a  third  party

          (vii)     Dissolution  of  the  Joint  Venture  Company

          (viii)    Change  of  the  corporate  purposes of the Joint Venture
                    Company

          (ix)      Merger  or  spin-off  of  the  Joint  Venture  Company

          (x)       Issuance  of  debentures or similar instruments of the Joint
                    Venture  Company  incurring  debt  in  excess  of 10% of the
                    approved  annual  budget.

          (xi)      Any  permanent  shutdown  or  closure  of mining operations.

     (d)  DILUTION  OF  INTEREST. If, subsequent to initial financing, the Joint
          Venture  Company  elects to expand the operation or otherwise increase
          its  capital  requirements,  such  expansion or capitalization will be
          financed  from  some  agreed upon percentage of current or future cash
          flow. In the case that the increase in capital cannot be financed from
          cash  flow, but rather by each parties' contributions in proportion to
          its ownership rights and obligations, and in the event that one of the
          parties  cannot  or  does not provide its corresponding portion of the
          capital  increase,  its  interest  will be diluted accordingly, in the
          understanding  that  such diluted party may, within a 24 month period,
          repurchase  its  diluted interest at the price paid by the other party
          in  order  to  achieve


                                       11
<PAGE>
          expansion, plus interest at a rate of Libor plus 5% (five percent) for
          the  corresponding  period  of  time.  In  the event of dilution, such
          dilution  will be calculated taking into consideration the total value
          of  the Joint Venture after the capital contribution has been made and
          then  allocating  each parties' contribution (or lack thereof) to such
          new  capital  structure.

     (e)  DIVIDENDS.  The Joint Venture Company will pay out a minimum of 30% of
          its  after  tax  profits  as  dividends  to  the  shareholders  unless
          otherwise  agreed  to  by  the  Board  of Directors and subject to the
          Minority  Provisions  above;  provided  however  that  the  Board  of
          Directors  will  have the right to reserve funds as may be required by
          regulatory  authorities  for  purposes  such  as but not restricted to
          cover  environmental  requirements.

     (f)  OPERATION  OF THE JOINT VENTURE COMPANY. A Board of Directors shall be
          named, comprised of 2 representatives from Electrum, 2 representatives
          from  Western,  and  a  single  independent  party  agreed  to by both
          parties.  This  is  subject  to  the  condition  that  any party which
          subsequently  obtains  more  than 50% of the total shares of the Joint
          Venture  Company  shall always be entitled to name the majority of the
          representatives  to  the  Board  of  Directors.

          The  Board  of Directors shall determine the manner in which the Joint
          Venture  Company  will  be  managed  and  will also name the full time
          officers  who  will replace the Technical Committee which governed the
          Project  prior  to  the  formation  of  the  Joint  Venture  Company.

          The  full  time  officers  to be employed by the Joint Venture Company
          will  report  directly  to  the  Board  of  Directors. Limits to their
          decision-making abilities will be set forth by the Board of Directors.
          The  affairs  of  the Joint Venture will be decided by simple majority
          vote  of  the  members  of  the  Board of Directors and will always be
          subject to any Minority Shareholder provisions as the case may be. The
          Parties understand that the members of the Board of Directors will not
          receive  any,  compensation  for  their role as members of such Board.

     (g)  SHAREHOLDER  STRUCTURE. Shareholder structure will be set forth in the
          corresponding  Joint  Venture  documents.

21.  ARBITRATION.  Any  dispute, controversy, difference or claim arising out of
     or  in  connection  with  this  Agreement,  or  the  breach, termination or
     validity  thereof  (in  each  instance,  a  "Dispute,"  or  collectively,
     "Disputes"), which cannot be amicably resolved by the parties within thirty
     (30)  calendar  days  after  receipt  by a party of written notice from the
     other  party  that  a  Dispute exists shall be settled by final and binding
     arbitration  in  the  forum  in  which the Joint Venture is organized or in
     which  the Property is located, whichever the case may be. The parties will
     obtain  the  agreement of arbitrators to the following: (a) the arbitrators
     shall  provide  a written ruling, stating in separate sections the findings
     of  fact  and  conclusions  of  law on which their ruling is based; and (b)
     their  ruling  shall  be  due  no  later than ninety days after their final
     hearing  and  within


                                       12
<PAGE>
     eighteen  months  after  commencement of the arbitration. In the event that
     any  party  fails  to nominate its respective arbitrator within thirty days
     after  receipt  of  notice  for  arbitration  issued by another party, such
     arbitrator  shall  be  appointed in accordance with the rules of the forum.

     (a)  The  parties  further  agree that the substance, nature and content of
          any  proceedings  conducted  pursuant  to  section  as  well  as  the
          substance,  nature  and  content  of  any resulting Arbitration Award,
          shall  be  and  remain  confidential.  The  parties  shall  obtain  a
          corresponding  undertaking  and obligation of confidentiality from the
          arbitrators.

     (b)  The  Arbitration  Award  shall  be  based  on  the  provisions of this
          Agreement;  provided,  however,  that  to  the extent that the subject
          matter  for  the  Arbitration  Award  is  not  set  forth  within this
          Agreement,  it  shall  be  based on the laws of the forum in which the
          arbitration  is  undertaken (except for any portion of such laws which
          would  incorporate the law of any other jurisdiction). In addition, in
          the  case  of  any  conflict  between  the  provisions  of  the  forum
          Arbitration Rules and the provisions of this Agreement, the provisions
          of  this  Agreement  shall  govern.

     (c)  The  parties  further agree: (a) that their mutual decision to resolve
          their  Disputes  by  arbitration  as  provided in this Agreement is an
          explicit  waiver  of immunity against enforcement and execution of the
          Arbitration  Award  and  any  judgment  thereon;  and  (b)  that  the
          Arbitration  Award  and  any  judgment thereon, if unsatisfied, may be
          entered in and shall be enforceable by the courts of any nation having
          jurisdiction over the person or property of the party against whom the
          Arbitration  Award  has  been  rendered.

     (d)  All notices to be given in connection with the arbitration shall be as
          provided  by  applicable  law.

     (e)  The  Arbitration  Award  shall  be  made  and shall be payable in U.S.
          dollars  only, free of any tax or any other deduction. The Arbitration
          Award  shall  include interest, at a rate determined as appropriate by
          the  arbitrators,  from  the  date of any breach or other violation of
          this Agreement to the date when the Arbitration Award is paid in full.
          All  costs  of arbitration, including reasonable attorneys fees, court
          costs (if any), costs of expert witnesses, transportation, lodging and
          meal  costs  of  the  Parties  and  witnesses,  costs  of  transcript
          preparation  and  other reasonable and necessary direct and incidental
          costs shall be assessed, apportioned and fixed, as is determined to be
          appropriate  in the opinion of the majority of the arbitrators, within
          the  Arbitration  Award:  provided,  however, that the arbitrators, in
          reaching  their opinion, shall give preference to the prevailing party
          for  the  recovery  of  its  costs  from the non-prevailing party. Any
          expense of the parties not included within the Arbitration Award shall
          be  borne  by  the  party  incurring  same.


                                       13
<PAGE>
     (f)  In  the  event any party to this Agreement commences legal proceedings
          to  "enforce  the  Arbitration  Award,  the expense of such litigation
          (including  reasonable  attorneys  fees  and  costs of court) shall be
          borne  by  the  party  not  prevailing  therein.

     (g)  In  the  event of any breach by a party of the terms of this Agreement
          which  would  cause any nonbreaching party to be irreparably harmed or
          for  which such nonbreaching party could not be made whole by monetary
          damages,  then  in  such  circumstances  such  nonbreaching  party, in
          addition  to any other remedy to which it may be entitled at law or in
          equity,  shall be entitled, without inconsistency with this Agreement,
          to  compel  specific  performance of this Agreement in any arbitration
          proceeding  instituted  pursuant  to  this  section  and in any action
          instituted'  in  any  court  of applicable jurisdiction to enforce any
          interim  or final Arbitration Award rendered pursuant to this section.

     (h)  Notwithstanding  the  foregoing  provisions  of  this  section,  any
          controversy  or  claim  otherwise  subject  to  arbitration under this
          Agreement  may  initially  be  heard  by  any  Court  of  competent
          jurisdiction  to  the  extent,  and  only  to the extent, that initial
          submission  of  the  matter to a Court is necessary for a party (i) to
          seek  emergency  injunctive or equitable relief or (ii) to enforce the
          provisions.of  this  section;  provided,  however,  that  any  matter
          initially  submitted  to  the  Court shall be referred by the Court to
          arbitration pursuant to this section as soon as the matter as to which
          such  emergency injunctive, equitable or enforcement relief was sought
          has  been  heard  and  ruled  upon  by  the  Court.

22.  ASSIGNMENT  OR  SALE  OF  INTEREST.  Subject  to  the  provisions  of  this
     Agreement,  either party may sell its interest in the Joint Venture Company
     or in this Agreement to a third party provided it has first offered to sell
     such interest to the other party to this Agreement for a price and on terms
     that  the  party  wishing  to  sell establishes. If the other party to this
     Agreement  does  not accept such offer within 30 days, the party wishing to
     sell  shall  thereafter have 120 days to sell such interest for the same or
     greater  price  and on the same terms or terms no more favorable to a third
     party.  This  provision  will reapply on any failure to close a sale within
     the  120  day  period.  Any  sale  to  a  third party shall provide for the
     assumption  by the third party of all of the obligations and liabilities of
     the  seller  under  this Agreement, whether accruing before or becoming due
     after  such  transaction,  and the 'agreement of the third party to perform
     all  of  the  obligations of the seller under this Agreement, including the
     obligations  contained  in  this  Section.

23.  ASSIGNMENT  TO  AFFILIATES.  Notwithstanding  any  other  provision of this
     Agreement,  any party hereto may at any time, upon simple written notice to
     the  other, sell or assign all or any portion of its participation, rights,
     obligations  and  interest  in:  (i)  the  Joint Venture Company; (ii) this
     Agreement;  or  (iii)  the  Project,  to  any affiliate, subsidiary, parent
     company,  holding company or other entity forming part of the same economic
     interest group of the assigning party (as such terms are defined by Mexican
     law).  Notwithstanding the foregoing, the new assignee (s) shall assume all
     of  the  duties, rights, and


                                       14
<PAGE>
     obligations  that were formerly in the original party prior to the transfer
     of its participation to such assignee, in such a way as to not unduly or in
     any  way  negatively  affect  the rights of the non-assigning party hereto.

24.  BASIS  OF  AGREEMENT  AND  COSTS. This Agreement will form the basis of the
     Joint  Venture agreement and other necessary or ancillary agreements as may
     be recommended by the parties' respective counsel and tax advisors in order
     to  give  full effect to the terms of this Agreement. The parties undertake
     to  use  their  best  efforts  to  complete  any such agreements as soon as
     possible  as  of  the  Effective Date. External legal costs associated with
     producing  this  document  will  be borne by each party at its own expense.

25.  COMMENCEMENT  OF  WORK.  Upon  signing  this Agreement Western and Electrum
     agree to the previously named representatives to the Technical Committee as
     in Section 4, to arrange for a Technical Committee meeting within one month
     as of the Effective Date, and to initiate evaluation of Projects as soon as
     practical  and  mutually  agreed.

26.  CONFIDENTIALITY;  PROPRIETARY MATTERS. All data and information provided to
     or  received  by  the  parties  with  respect  to this Agreement, the Joint
     Venture,  the  Project,  the  Property  and  the  methodology and processes
     undertaken  to  carry out exploration and development work thereon shall be
     treated  as confidential. No party shall disclose such information to third
     parties,  unless  (i)  the  disclosure  is  required by law or a regulatory
     authority  having  jurisdiction; (ii) the disclosure is consented to by the
     party  which  is  not seeking to disclose such information ("Non-Disclosing
     Party"),  in the understanding that the Consent of such NonDisclosing Party
     shall  not  be  unreasonably  withheld;  (iii)  such  information is or was
     already in the public domain prior to its disclosure; (iv) such information
     was  already in the possession of the disclosing party prior to its receipt
     (and  such disclosing party has the burden of proof of demonstrating this);
     or  (v) becomes of public domain through no breach of this Agreement. Where
     disclosure  is  required  by  law  or  by  a  regulatory  authority  having
     jurisdiction,  a  copy of the information required to be disclosed shall be
     provided  to the Non-Disclosing Party as soon as possible in advance of its
     disclosure.

27.  NOTICES. Any notice, direction or other instrument required or permitted to
     be  given  under  this  Agreement  will  be  addressed  as  follows:

     If to ELECTRUM:

          720  Fourth  Avenue
          Ashland,  Oregon  97520
          Phone:  541-488-2807


                                       15
<PAGE>
     If to WESTERN and or WESTERN:

          Western  Goldfields,  Inc.
          50  Palmetto  Bay  Road
          Suite  147
          Hilton  Head  Island,  SC  29928
          Attention:  Mr.  John  P.  Ryan
          Fax:  (843)  682-2024

     Subject  to  applicable  legal  requirements  for  service  of  process and
     notifications,  any  notice,  direction or other instrument given hereunder
     shall  be  in  writing and will, if delivered, be deemed to have been given
     and  received on the day it was delivered, and if mailed, be deemed to have
     been  given  and  received  on  the fifth business day following the day of
     mailing,  except in the event of disruption of the postal services in which
     event notice will be deemed to be received only when actually received and,
     if  sent  by  telegram, telex, telecopy, telecommunication or other similar
     form  of  communication during normal business hours (9:00 a.m. - 5:00 p.m.
     local  time of the place of receipt), shall be deemed to have been given or
     received  on  the  day it was so sent, or in the case of telecommunications
     sent outside normal business hours, on the next following business day. Any
     party  may at any time give to the other notice in writing of any change of
     address  of  the  party giving such notice and from and after-the giving of
     such  notice,  the address or addresses therein specified will be deemed to
     be  the  address of such party for the purposes of giving notice hereunder.

28.  FORCE  MAJEURE.  No  party hereto shall be liable to the other and no party
     hereto  shall  be deemed in default under this Agreement for any failure or
     delay  to perform any of its covenants and agreements caused or arising out
     of any act not within the control of the party, excluding lack of funds but
     including,  without  limitation,  acts  of God, strikes, lockouts, or other
     industrial  disputes,  acts  of  public enemies, riots, fire, storm, flood,
     explosion, government restriction, failure to obtain any approvals required
     from  regulatory  authorities, including environmental protection agencies,
     unavailability of equipment, interference of third party specific interests
     groups  or  other  causes whether of the kind enumerated above or otherwise
     which  are  not  reasonably  within the control of the party. No right of a
     party  shall  be  affected  for  failure  or delay of the party to meet any
     condition of this Agreement, which failure or delay is caused by one of the
     events  above  referred  to,  and  all times provided for in this Agreement
     shall  be extended for a period of time commensurate with the period of the
     delay,  and  so far as possible the party affected will take all reasonable
     steps  toremedy the delay caused by the events above referred to. Any party
     relying  on  the  provisions  of this section shall forthwith promptly give
     notice to the other party of the commencement of such event and of its end.

29.  EFFECTIVE  DATE.  This Agreement shall be effective from and as of the date
     of  its  signature.  Time  shall  be  of  the  essence  hereof.

30.  ENTIRE  AGREEMENT.  This  Agreement  constitutes  the  entire agreement and
     supersedes  all  prior  agreements,  understandings,  negotiations  and
     discussions,  whether oral or


                                       16
<PAGE>
     written  between  the parties, and there are no warranties, representations
     or  other agreements between in connection with the Property or the Project
     except  as  specifically  set forth herein. This Agreement shall be binding
     upon  the  parties  hereto  and  their  respective successors and permitted
     assigns.

31.  FURTHER  ASSURANCES.  Each  of the parties to this Agreement shall take all
     such  further steps and execute all such further and other documentation as
     may  be  necessary  or  desirable in order to more fully give effect to the
     provisions  of  this  Agreement.

32.  HEADINGS.  Headings  in  this  Agreement  are for reference and convenience
     only,  with  no  legal  significance  and  do  not  expand, amend, alter or
     influence  in  any  way the substantive provisions of the sections to which
     they  refer.

In witness of the understanding by and amongst the parties, their duly empowered
representatives  have  hereto  set  their  signatures.

For  ELECTRUM

Executed this Agreement as of  4  day of April, 2003.
                              ---

By:  L.  Buchanan
     -------------------------------------
Title:     Director
        ----------------------------------


Signature:/s/  L.  Buchanan
          --------------------------------


STATE OF TEXAS           )
                         )     ss.
COUNTY OF COLLIN         )

     This  Agreement  was  acknowledged  before  me  on   4-21-03, by Larry J.
                                                          -------
Buchanan.
                              /s/  Hope  M.  Bolien
                              ---------------------
                              Notary  Public


For WESTERN

Executed this Agreement as of   25   day of April   , 2004.
                              ------        --------

By:     Thomas Mancuso
Title:  President


Signature:/s/Thomas  Mancuso
          -------------------------------


                                       17
<PAGE>
STATE OF OREGON          )
                         )     ss.
COUNTY OF JACKSON        )

     This  Agreement  was  acknowledged  before  me on April 25, 2003, by Thomas
                                                       --------------
Mancuso.
                              /s/  Jerri  G.  Murphy
                              ----------------------
                              Notary  Public





                                       18
<PAGE>
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                                                                   EXHIBIT 10.17

                          BUSINESS CONSULTANT AGREEMENT

     THIS  BUSINESS CONSULTANT AGREEMENT ("Agreement") is entered into this 28th
day  of  September,  2003,  between  MGI  Fund-Raising  Consultants,  a  Del.
corporation,  with its principal offices located at Minneapolis, MN (hereinafter
referred  to as "MGI"), and Western Goldfields, Inc., a corporation with offices
located  at 1519 Main Street, #169, Hilton Head, SC 29926, (hereinafter referred
to  as  the  "COMPANY").

1.   Consulting  Services
     --------------------

     The  COMPANY  hereby  engages  MGI  to perform the financial consulting and
public  relations services listed below on the terms and conditions set forth in
this  Agreement:

     (a)  Introduce  the  COMPANY  to  investment  bankers,  market  makers,
          stockbrokers,  private  investors, hedge funds, and other financing or
          marketing  sources  designed to both raise capital and increase public
          awareness  of  the  undervalued  nature  of  the  COMPANY'S  shares;

     (b)  Meet  with  appropriate  potential  shareholder  groups  to create and
          broaden  a  shareholder  base  for  the  COMPANY;

     (c)  Assist  with the concept, design, layout, preparation, and printing of
          marketing  materials  such  as  flyers,  brochures,  powerpoint
          presentations,  and  other  such  type  of  product.

     (d)  Assist  with  direct  marketing campaigns such as direct mail or other
          concepts  designed  to  increase  the public awareness of the COMPANY.

     MGI  acknowledges  that  one of the COMPANY's objectives is to raise market
awareness  of  the  possible undervalued nature of its shares, and secondly, the
COMPANY  seeks  advice  and  assistance  in  identifying  and  negotiating  with
potential  strategic  partners. The COMPANY acknowledges that MGI cannot provide
any guaranty or assurances that the COMPANY will be successful in completing any
transaction  of  the  types  set  forth  above,  as they are subject to numerous
factors  which  are  beyond  the  control of MGI, including, but not limited to,
market  conditions,  results  of  operations of the COMPANY, industry trends and
general  investor  interest.

     The  COMPANY  acknowledges that MGI is not being engaged in a capacity as a
registered  broker-dealer  and  that  MGI  cannot,  and  shall  not  be required
hereunder  to,  engage  in  the  offer  or  sale  of securities on behalf of the
COMPANY.  While  MGI  has  relationships  and  contacts  with various investors,
broker-dealers, and investment funds, MGI's participation in the actual offer or
sale  of  the  COMPANY  securities shall be limited to that of an advisor to the
COMPANY  and  a  "finder"  of  investors, broker-dealers and funds.  The COMPANY
acknowledges  and agrees that the solicitation and consummation of any purchases
of  the COMPANY's securities shall be handled by the COMPANY or one or more NASD
member  firms  engaged  by  the  COMPANY  for  such  purpose.


<PAGE>
     The  COMPANY shall pay a 10% cash finders fees to MGI on sums received from
investors  whom  MGI  introduces to the COMPANY provided such fees are allowable
under  the  laws  of  the  jurisdiction  of  the  domicile  of  the  investor.
Alternatively, MGI may elect to take such fees in restricted stock valued at 65%
of  the  prevailing  market  price  of  the  stock.

2.   Term  of  Agreement
     -------------------

     The  term  of this Agreement shall commence upon signing and shall continue
therefrom  for  a period of twelve (12) months, with an option to renew upon the
agreement  of  both  parties.

3.   Compensation/Expenes
     --------------------

     Upon  signing  this agreement the Company shall issue to MGI 75,000 options
to  acquire  common  stock of the Company at a exercise price per share equal to
the  prevailing  market  price at the time of signing, and exercisable for three
years  from  the  date  of  issue.  Upon  exercise  of  such options, the shares
acquired  shall  bear  demand  and  piggyback  registration  rights.

     Further,  the  Company  shall  issue  to MGI 2,500 restricted shares of the
common  stock  of  the  Company  on  a  monthly  basis  as  a  retainer.

     Additionally,  as  noted above, the compensation of MGI may also consist of
finder's  fees  equal  to 10% o of the gross amount that MGI directly raises for
the Company.  However, if MGI introduces the COMPANY to another party who raises
capital  for  the COMPANY, MGI may also be entitled to finder's fees, so long as
the  total  amount  of  finder's  fees  paid by the COMPANY does not exceed 10%.

     The  COMPANY shall also reimburse MGI for any actual out-of-pocket expenses
in  a  timely manner, provided expected expenses exceeding $500 are pre-approved
by  the  COMPANY.

     MGI  agrees to take its profit on marketing materials which it produces for
the COMPANY in restricted stock of the Company valued at 65% o of the prevailing
market  price  of  the  stock  at  the  time such materials are delivered to the
Company.  Any  work  to  be  completed  by MGI for the COMPANY is subject to the
pre-approval  of  both  parties.

4.   Miscellaneous
     -------------

     4.1     Further  Actions.  At  any  time  and from time to time, each party
             ----------------
agrees,  at  its or his expense, to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of this
Agreement.

     4.2     Entire  Agreement:  Modification.  This  Agreement  sets  forth the
             --------------------------------
entire  understanding  of  the parties with respect to the subject matter hereof
and  supersedes  all  existing  agreements  among  them  concerning such subject
matter,  and  may  be modified only by a written instrument duly executed by the
party  to  be  bound.


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<PAGE>
     4.3     Notices.  Any  notice  or other communication required or permitted
             -------
to be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested (or by the most nearly comparable method if mailed from
or  to a location outside of the United States), or delivered against receipt to
the  party  to  whom it is to be given at the address of such party set forth in
the preamble to this Agreement (or to such other address as the party shall have
furnished  in  writing  in  accordance  with  the  provisions  of this Section).

     4.4     Waiver.  Any  waiver  by  any party of a breach of any provision of
             ------
this  Agreement shall not operate as or be construed to be a waiver of any other
breach  of  that  provision  or  of  any  breach  of any other provision of this
Agreement.  The  failure  of a party to insist upon strict adherence to any term
of  this  Agreement  on one or more occasions will not be considered a waiver or
deprive  that  party  of the right thereafter to insist upon strict adherence to
that  term  or  any other term of this Agreement.  Any waiver must be in writing
and,  in  the  case  of  a corporate party, be authorized by a resolution of the
board  of  directors  or  by  an  officer  of  the  waiving  party.

     4.5     Binding  Effect.  The provisions of this Agreement shall be binding
             ---------------
upon and inure to the benefit of the parties and their respective successors and
assigns; provided, however, that any assignment by any party of its rights under
this  Agreement  without  the  written consent of the other party shall be void.

     4.6     Severability.  If  any  provisions  of  this  Agreement is invalid,
             ------------
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and  if  any  provision  is inapplicable to any person or circumstance, it shall
nevertheless  remain  applicable  to  any  other  persons  and  circumstances.

     4.7     Headings.  The  headings  in  this  Agreement  are  solely  for
             --------
convenience  of  reference  and  shall be given no effect in the construction or
interpretation  of  this  Agreement.

     4.8     Counterparts: Governing Law.  This Agreement may be executed in any
             ---------------------------
number  of  counterparts,  each of which shall be deemed an original, but all of
which  together  shall  constitute  one  and  the  same instrument.  It shall be
governed  by  and  construed  in  accordance with the Laws of the State of South
Carolina,  without  giving  effect  to  conflict  of  laws.

     4.9     Attorney's  Fees.  In  the  event of a dispute with respect to this
             ----------------
Agreement,  the  prevailing party shall be entitled to its reasonable attorney's
fees  and other costs and expenses incurred in litigating or otherwise resolving
or  settling  such  dispute.

This  agreement,  although  signed by an Officer of Western Goldfields, Inc., is
subject  to  the  final  approval of the Board of Directors of the Company.  The
parties  hereto  have  executed  this  Agreement  as of the date first set forth
above.

/s/John  Ryan                              /s/  John  Martin
---------------------------------          -------------------------------------
John  Ryan,  Vice  President               John  Martin,  President
Western  Goldfields,  Inc.                 MGI Fund-Raising Consultants, Inc.


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