Romarco Announces Third Quarter Results

ROMARCO MINERALS INC. ("TSXV: R" - the "Company") reports its third quarter financial results. All figures are in Canadian dollars unless otherwise noted. Complete quarterly results are available on SEDAR and on the Company's website at www.romarco.com.

The loss from operations of the Company primarily reflects the overhead costs incurred by the Company as it oversees exploration at its projects and evaluates precious metals properties for acquisition as well as costs incurred in the process of merging with Western Goldfields. The exploration and development costs incurred at the Company's projects have been capitalized to mineral property interests.

The Company had a net loss of $708,908 for the three months ended September 30, 2005 and $1,725,117 for the nine months ended September 30, 2005 compared to a loss of $217,366 and $653,981 for the same periods of the previous year.

In 2004, the Company wrote-off $815,114 of its mineral property interests. The Company gave notice to Seabridge Gold Inc. in February 2005 that it was terminating the option agreement on the Hog Ranch Gold Project. In accordance with CICA Handbook Section 3063, "Impairment of Long-Lived Assets", the accumulated acquisition, land holding and deferred exploration costs spent at Hog Ranch to December 31, 2004 were written-off. The Company incurred, and wrote-off, $47 of additional costs at Hog Ranch in the third quarter of 2005 for a total of $7,570 for the nine months ended September 30, 2005.

General and administrative costs for the first nine months of 2005 are comparable to those of the first six months of the previous year except for the following. Shareholder relations and transfer agent costs increased in 2005 primarily due to increased shareholder relations activities by the Company as it seeks to increase public awareness of its projects and activities. While the Company's insurance rates remain the same in 2005 as in 2004, insurance costs for 2005 will be greater than for 2004 due to the increased activity and thus, added exposure, of the Company. Travel costs and consulting fees for the third quarter of 2005 are much greater than in the third quarter of 2004 due to the extra activity involved as the Company works to complete its merger with Western Goldfields.

Stock-based compensation for the nine months ended September 30, 2005 is considerably higher than it was for the same period in the previous year. During the nine months ended September 30, 2005 the Company issued 1,000,000 options to staff, directors and consultants, while its previous grant of options was in 2003. The Company calculates stock-based compensation as the estimated fair value of stock options and recognizes this cost during the period that the options vest. As a result, stock-based compensation in 2005 includes the cost of options issued in both 2003 and 2005, while in 2004, stock-based compensation only includes the cost of the options issued in 2003.

The Company recognized $19,050 of stock-based compensation in the three months ended September 30, 2005 and $151,050 in the nine months ended September 30, 2005 with corresponding increases in the separate component of shareholders' equity. For the three months ended September 30, 2004, the Company recognized $22,500 of stock based compensation, of which $2,700 was capitalized as mineral property expenditures and $19,800 was expensed as stock based compensation, with a corresponding increase in the separate component of shareholders' equity. For the nine months ended September 30, 2004, the Company recognized $101,100 of stock based compensation, of which $15,100 was capitalized as mineral property expenditures and $86,000 was expensed as stock based compensation, with a corresponding increase in the separate component of shareholders' equity.

Interest income earned in 2005 is lower than in 2004 due to decreased cash levels.

Prior to entering into the agreements to merge with Western Goldfields and U.S. Gold, Romarco entered into an agreement with Quest Capital Corp. ("Quest") to provide a US$6.0 million standby facility to Romarco. The Facility was put in place to enable Romarco to proceed with negotiations regarding potential mergers and acquisitions. As consideration for Quest providing the Facility, Romarco issued 1,248,800 common shares to Quest in June 2005. The value of these shares was recorded as deferred financing costs and will be amortized over the five month life of the facility.

The terms of the agreement to merge with Western Goldfields and U.S. Gold included the obligation for Romarco to provide US$1.5 million in short-term funding to U.S. Gold. This funding was to be in the form of a loan to U.S. Gold and was to be paid in two tranches of US$200,000 and US$1,300,000 with the US$200,000 payable immediately and the US$1,300,000 payable within 30 days of signing the agreement to merge. The loan would be cancelled upon completion of the merger. If the merger was not completed, the loan would be repayable by U.S. Gold in cash or shares.

The US$200,000 was initially to be treated as a non-refundable fee for the exclusive right to conduct due diligence on U.S. Gold. Upon payment of the remaining US$1,300,000, U.S. Gold would cancel the fee and convert the US$200,000 to a loan, which, together with the US$1,300,000, would form a loan to U.S. Gold of US$1,500,000.

In August 2005 Romarco was notified by U.S. Gold that U.S. Gold was withdrawing from the planned merger. Since U.S. Gold withdrew from the merger plans before Romarco paid the additional US$1,300,000, the original US$200,000 was not converted to a loan and remained in the form of the non-refundable fee. As a result, Romarco has expensed the US$200,000 fee paid to U.S. Gold in June 2005.

Other items included in merger related costs are legal fees incurred in the preparation of the merger agreement and F-4 Registration Statement, as well as the fees paid for the preparation of the independent fairness opinion.

At September 30, 2005, the Company had cash and short-term deposits totaling $2,700,087 as compared to $1,991,371 at September 30, 2004. During the third quarter of 2005, the Company spent $709,651 (2004 - $208,734) on its mineral property interests. For the nine months ended September 30, 2005, the Company spent $1,011,669 (2004 - $746,014) on its mineral property interests and $10,620 (2004 - $17,975) on additional field, computer and office equipment.

In September 2005, the Company completed a private placement financing. The Company issued 22,400,263 units for gross proceeds of $3,808,045. The terms of the private placement were $0.17 per unit with each unit consisting of one common share and one full common share purchase warrant. Each full warrant is priced at $0.21 with a two-year term. The common shares issued pursuant to the private placement are subject to hold periods expiring in January 31, 2006. In connection with this private placement, an arrangement fee of $120,000 and a finder's fee of $19,712 was paid. Total share issue costs for this private placement totaled $186,529.

Romarco begins the fourth quarter of 2005 with $2,700,087 in cash and no debt. The drilling portion of the exploration program at Buckskin-National was completed in October 2005 with encouraging results. The exploration programs, including drilling, that were planned for the Cori Puncho, Roberts Mountains, and Pine Grove projects have been postponed as the Company focuses its resources on effecting the merger with Western Goldfields.

The Company continues to work on completing the merger with Western Goldfields and hopes to hold shareholders' meetings to approve the merger in the first quarter of 2006. Upon completion of the merger, the merged company's primary focus will be to complete a feasibility study on the start up of new mining operations at the Mesquite Mine. The merged company will also re-asses and re-prioritize its expanded portfolio of exploration properties. Prior to shareholder approval of the merger, the Company will continue to expend significant resources on merger related expenses for both itself and Western Goldfields. The Company is also planning to fund studies aimed at improving operating results at Mesquite. The Company believes that it has sufficient resources to continue operations through the first quarter of 2006. In order to carry out its planned exploration programs and meet its contractual obligations, the Company must raise additional funds. The Company has retained the services of one of its shareholders to help raise the funds necessary for the Company's ongoing requirements.

For further information, please contact Diane Garrett, President and C.E.O. at (830) 634-7489 or by e-mail at dgarrett@romarco.com or Mr. Ralf Langner, V.P. Finance at (604) 688-9271 or by e-mail at rlangner@romarco.com  

ON BEHALF OF ROMARCO MINERALS INC.

Diane R. Garrett
President and C.E.O.