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Wescan Goldfileds Inc. Announces Third Quarter Results

November 27, 2006

Wescan Goldfields Inc. (“Wescan”or the “Company”) reports the unaudited results of Wescan’s operations for the quarter ended September 30, 2006 have been filed and may be viewed at www.sedar.com.  A summary of key financial and operating results for the quarter follows:

Highlights

•     Wescan announced acquisition of the Jojay gold deposit
•     The Company announced the establishment of wholly owned subsidiary.
•     Continued data compilation and interpretation on its uranium land holdings.
•     Completed drilling and soil sampling on Fork Lake gold property.
•     Working capital of $3.9 million at September 30, 2006.
•     Issued and outstanding shares of 49,628,738 at September 30, 2006.

Acquisition of Jojay Gold Deposit 

On August 31, 2006 the Company announced that it had signed a Letter of Intent (“LOI”) with Claude Resources Inc (“Claude”) to acquire Claude’s 75% interest of the Jojay gold deposit to bring the Company’s position to 100% of the property.  Under the terms of the transaction, Wescan acquired Claude’s interest by the issuance of 3.5 million Wescan shares on the transaction close date of October 24, 2006.  The Jojay gold deposit is an advanced stage exploration project located in the Greenstone Belt in northern Saskatchewan and this acquisition now allows the Company to aggressively move this property forward.

Establishment of Subsidiary Company

During the quarter, the Company announced that it had created a wholly owned Mexican subsidiary, Minera Abundancia, which has been registered in the Mexican state of Chihuahua. The Company feels that the establishment of this subsidiary is another step in achieving Wescan’s strategic plan of establishing itself in the international mining community. The creation of the Mexican subsidiary allows Wescan to pursue and potentially acquire advanced exploration projects in that part of the world. 

Athabasca Basin Properties

During the second quarter of 2006, the Wescan-Santoy Joint Venture completed a helicopter-borne time domain electromagnetic survey of the Black Lake block (Fir Island project) and an airborne magnetic and MEGATEM survey of the Hozempa Lake, Pattyson Lake-Umpherville Lake, Dowler Lake and Richards Lake blocks. In the third quarter of 2006, interpretation and evaluation of the geophysical results were initiated by Santoy Resources Ltd. (“Santoy”) (the operator) with the expectation of completing and developing a follow-up exploration plan for 2007 prior to year-end.

Fork Lake Gold Property

During the third quarter of 2006, Wescan drill-tested the continuation of the Boulder zone, intersected earlier this year by drill hole DL-06-03 which contained encouraging results of 12.07 grams/tonne over 1 meter down hole.  Extensive soil sampling programs were conducted over 1.4 x 3.4 km and 0.8 x 1.3 km grids in areas southwest of the Boulder and Jasper zones to identify continuity of these zones and the potential for new zones. 

Quarter End Results

As at September 30, 2006, Wescan’s cash balance, which included cash and short-term investments, totaled $4.4 million.  The Company recorded a net loss of $176,017 ($0.00 per share) compared to a net loss of $69,568 ($0.00 per share) for the same period in 2005.  The difference between the quarter ended September 30, 2006 and 2005 is predominately related to the on-going professional fees incurred by the subsidiary company, certain due diligence expenditures on potential properties evaluated during the third quarter of 2006 both nationally and internationally and increased personnel and executive compensation costs. 

Year to Date Results

For the nine-month period ended September 30, 2006, the Company recorded a net loss of $301,973 ($0.01 per share) compared to net income of $352 ($0.00 per share) for the same period in 2005.  The loss for the period ended September 30, 2006 was mitigated by non-cash income tax recoveries of $534,000 (2005 - $329,688).  The income tax recovery is the result of the Company recording certain tax pools to the extent a future income tax liability was created upon the renunciation of flow-through expenditures.  During the second quarter federal and provincial governments enacted a reduction in corporate tax rates resulting in a further recovery during the nine-month period.  Without the income tax recovery the loss for the nine-month period would have been $835,973 (2005 - $329,336).  The primary difference from 2005 to 2006 relates to increased professional fees due to the establishment of a subsidiary in the second quarter of 2006, increased due diligence activities both internationally and nationally and increased administration costs over the same period of 2005.

Selected financial highlights include:

Consolidated Balance Sheets
As at September 30,  2006
As at December 31,2005
Current assets
$       4,457,213
$   6,369,236
Capital and other assets
4,114,537
1,479,705
Current liabilities
587,578
276,716
Future income tax liability
501,000
-
Share capital
7,813,883
7,749,253
Contributed surplus
393,306
245,016
Deficit
(724,017)
(422,044)

Selected financial highlights continued:

Consolidated Statements of Income (Loss)
Three months Ended  September 30, 2006
Three monthsEnded  September 30,  2005
Nine months Ended  September 30,  2006
Nine months Ended September 30,2005
Interest and other
$           51,228
$            21,765
$          157,120
$        50,106
Operating Expenses
413,245
91,333
993,093
379,442
Loss for the period before other items
362,017
69,568
835,973
329,336
Net income (loss) for the period
(176,017)
(69,568)
(301,973)
352
Income (loss) per share
(0.00)
(0.00)
(0.01)
0.00

 

Consolidated Statements of Cash Flows
Three months Ended  September 30, 2006
Three monthsEnded  September 30,  2005
Nine months Ended  September 30,  2006
Nine months Ended September 30,2005
Cash flows from operating activities
$         151,468
$           17,581
$         (247,870)
$     (204,315)
Cash flows from investing activities
(629,468)
(421,063)
(2,644,587)
(644,377)
Cash flows from financing activities
3,780
3,699,847
1,028,423
4,604,220
Net increase (decrease) in cash
(474,220)
3,296,365
(1,864,034)
3,735,528
Cash - beginning of period
4,841,645
2,856,347
6,231,459
2,146,121
Cash - end of period
4,367,425
5,881,649
4,367,425
5,881,649

Outlook

As at November 20, 2006, the Company has $3.8 million in cash and cash equivalents that will partially be used to complete future exploration programs on the Jojay project and Fork Lake gold properties, fund its 50% share of future exploration programs on the Company’s uranium interests and continue exploring potential mineral properties in Canada and internationally.  The Company will spend a minimum of $2.5 million on exploration programs on the Company’s gold and uranium properties during 2006 to fulfill its flow-through expenditure requirements.  Surplus cash will be used for future drill programs, general corporate matters and other opportunities as they may arise.

Caution Regarding Forward-looking Information

From time to time, Wescan makes written or oral forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the Ontario Securities Act.  Wescan may make such statements in this news release, in other filings with Canadian regulators, in reports to shareholders or in other communications. These forward-looking statements include, among others, statements with respect to Wescan's objectives for the ensuing year, our medium and long-term goals, and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may," "could," "should," "would," "suspect," "outlook," "believe," "plan," "anticipate," "estimate," "expect," "intend," and words and expressions of similar import are intended to identify forward-looking statements. In particular, statements regarding Wescan's future operations, future exploration and development activities or other development plans contain forward-looking statements. All forward-looking statements and information are based on Wescan's current beliefs as well as assumptions made by and information currently available to Wescan concerning anticipated financial performance, business prospects, strategies, regulatory developments, development plans, exploration, development and mining activities and commitments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, developments in world gold markets, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar, changes in exploration, development or mining plans due to exploration results and changing budget priorities of Wescan or its joint venture partners; the effects of competition in the markets in which Wescan operates; the impact of changes in the laws and regulations regulating mining exploration and development; judicial or regulatory judgments and legal proceedings; operational and infrastructure risks and the additional risks described in Wescan's most recently filed annual and interim MD&A and Wescan's anticipation of and success in managing the foregoing risks. Wescan cautions that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Wescan, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Wescan does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Wescan or on our behalf.

For further information please contact:

Mr. Moe Lindsay
President
300 – 224 4th Avenue South 
Saskatoon, SK S7K 5M5
PH: (306) 664-2422 
FAX: (306) 664-7181

OR

Mr. Harvey Bay
Interim Chief Financial Officer
300 – 224 4th Avenue South
Saskatoon, SK S7K 5M5
PH: (306) 664-2422
FAX: (306) 664-7181

 
 
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