Tag - WGW

The Russell 2000 (NYSE:IWM) is in negative territory following news of a drop in U.S. consumer confidence.

At 12:10 a.m. ET, the small-cap index was down 0.17 points, or 0.02%, to 701.11. The Dow Jones Industrial Average (INDU) had shed 37.28 points, or 0.30%, to 12,511.36.

Small-cap stocks are in the red after briefly breaking into positive territory at about 11 a.m. ET.

The bears were empowered by news after the start of trading that U.S. consumer confidence fell to its lowest level in five years in March. The Conference Board reported that its index of consumer confidence fell to a level of 64.5 from an upwardly revised level of 76.4 in February.

Economists were expecting a smaller decline. The data add to fears that the U.S. economy is in recession.

“Consumers’ outlook for business conditions, the job market and their income prospects is quite pessimistic and suggests further weakening may be on the horizon,” Lynn Franco, the business organization’s research director, said in a statement.

On the heels of $1,000 gold, SmallCapInvestor.com today spotlights Western Goldfields Inc. (AMEX: WGW), a gold exploration and mining company that booked only $4.3 million in revenue last year, but is expected to increase its revenue in 2008 to $125 million.

It might not top the hype of the California gold rush of 1849, but the recent run-up in the price of gold has had many investors giving gold and other precious metals a second look. The share prices of many gold miners have consistently been hitting new highs in recent weeks as the price of gold edged toward $1,000 per ounce, a level that was topped on Thursday.

One small cap that is set to profit from these rising prices is Western Goldfields Inc. (AMEX: WGW). At a market cap of $488 million, the company has seen its stock price surge 109% over the course of the past year. Currently headquartered in Toronto, the company was incorporated as the Bismarck Mining Company in 1924. It changed its name in 2002 and went through a corporate restructuring in 2006.

Today it has a seasoned management team that includes executives that have come from other big name gold mining companies such Barrick Gold Corp. (NYSE: ABX) and Kinross Gold Corp. (NYSE: KGC). Officers and directors of the company own approximately 4.5% of its outstanding common shares.

The chief asset of Western Goldfields is its Mesquite mine, located in Imperial County, Calif. and operated between 1985 to 2001 under several different companies including Newmont Mining Corporation (NYSE: NEM). In 2001, the mine was closed due to low gold prices and the estimated costs of expanding the mine, but Western Goldfields acquired the mine from Newmont in 2003 and has since worked to bring it back into production.

As of Dec. 31, measured and indicated resources of the mine were approximately 4.3 million ounces. The mine was brought into production in January and the company is now forecasting full-year production of 155,000 to 165,000 ounces for 2008. Western estimates that the mine has a 12-year useful life. With the mine now up and running, the company will likely be able to shift its focus to other potential opportunities such as expanding into other parts of the southern United States, and possibly Canada and Mexico.