WESTERN AMERICA ANNOUNCES FIRST QUARTER SALES AND EARNINGS

CALGARY, Sept. 16 /CNW/ - Western America Resources Inc. (``WAR'') is
very pleased to announce that consolidated revenues for the first quarter of
1998 was $2,261,985 with pre-tax earnings of $127,824.  Earning per share
amounted to $0.03 per share. 
The healthy earnings for the quarter were due to the strong performances
of the industrial supply division in both Alberta and Ontario, and the export
of products from the manufacturing division.  WAR experienced growth in sales
from the newly expanded high-tech division, which included the positive impact
of the exclusive Canadian distribution agreement with Nikon Corporation.  The
strong overall earnings performance for the Company was achieved in spite of
weak forestry markets in B.C., the declining oil and gas market in Alberta and
start-up costs related to the high-tech division. 
WAR is currently pursuing a number of potential acquisition opportunities
in its core distribution divisions.  In addition, management is continuing to
focus on opportunities to further enhance the earnings generated by its
existing operations.  In particular, the recent organizational restructuring
for the high-tech division is expected to result in significant earning
improvements in 1999. 
Western America is one of the largest distributors of industrial supplies
and high-tech equipment used in the survey, forestry, oil & gas, mining and
construction markets in Canada. Its core distribution divisions are managed
through a network of branches across Canada. WAR's growth strategy is to focus
on consolidating the current fragmented industry through acquisitions and to
obtain exclusive distribution rights for new product lines. 


    ON BEHALF OF THE BOARD OF DIRECTORS
    WESTERN AMERICA RESOURCES INC.
    By:      ``Donald P. Caron''
        -----------------------------
        Donald P. Caron, CEO
    THIS PRESS RELEASE MAY CONTAIN FORWARD LOOKING STATEMENTS THAT INVOLVE
    RISKS AND UNCERTAINTIES WHICH COULD CAUSE THE ACTUAL RESULTS TO DIFFER
    MATERIALLY FROM THOSE INTENDED OR ANTICIPATED BY THE COMPANY.
    THE ALBERTA STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED THE
    INFORMATION CONTAINED HEREIN.
    <<
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    Western America Resources Inc.
    Unaudited Consolidated Balance Sheets
                                                July 31       September 30
    As at                                          1998               1997
                                           ------------       ------------
    Assets
    Current
       Cash                                 $         -        $     3,901
       Accounts receivable                      945,127             10,380
       Inventory                              2,290,435                  -
       Prepaid expenses                          30,696                  -
                                           ------------       ------------
                                              3,266,258             14,281
    Capital assets                              270,907                  -
    Resource properties                               -            433,469
                                           ------------       ------------
                                            $ 3,537,165        $   447,750
    -----------------------------------------------------------------------
    -----------------------------------------------------------------------
    Liabilities
    Current
       Bank indebtedness                    $ 1,622,877        $         -
       Accounts payable                         961,491             26,432
       Short term bank loan                     315,000                  -
                                           ------------       ------------
                                              2,899,368             26,432
    Long term debt                              184,923             49,500
    Deferred income tax                           4,483                  -
                                           ------------       ------------
                                              3,088,774             75,932
    Shareholders' Equity
    Share capital                               526,299            501,298
    Special warrants                            428,730                  -
    Deficit                                    (506,638)          (129,480)
                                           ------------       ------------
                                                448,391            371,818
                                           ------------       ------------
                                            $ 3,537,165        $   447,750
    -----------------------------------------------------------------------
    -----------------------------------------------------------------------
    Western America Resources Inc.
    Unaudited Consolidated Statements of Income
    For the three month period ended
                                                July 31       September 30
                                                   1998               1997
                                           ------------       ------------
    Sales                                   $ 2,261,985        $         -
    Cost of sales                             1,535,137                  -
                                           ------------       ------------
    Gross profit                                726,848                  -
    Expenses
      Advertising and promotion                  26,944                300
      Depreciation                               14,284                  -
      General and administration                 38,405                508
      Insurance                                   1,311                  -
      Professional and consulting fees           14,889              4,500
      Rent and utilities                         40,796              4,500
      Salaries and benefits                     359,470                  -
      Telephone and fax                          15,953                185
      Transfer agent and listing fees             3,488              2,339
      Travel                                     48,049                205
                                           ------------       ------------
    Total operating expenses                    563,589             12,537
                                           ------------       ------------
    Earnings (loss) before interest and
     income taxes                           $   163,259        $   (12,537)
    Interest                                     35,435                  -
                                           ------------       ------------
    Earnings (loss) before income taxes         127,824            (12,537)
    Income taxes                                      -                  -
                                           ------------       ------------
    Net earnings (loss) for the period          127,824            (12,537)
    ----------------------------------------------------------------------
    ----------------------------------------------------------------------
    Earnings (loss) per share               $      0.03        $    (0.002)
    ----------------------------------------------------------------------
    ----------------------------------------------------------------------
    Common shares outstanding                 4,263,000          4,213,000
    ----------------------------------------------------------------------
    ----------------------------------------------------------------------
    Note: Income tax loss carryforwards have been utilized to reduce Canadian
    income taxes otherwise payable
    ----------------------------------------------------------------------
    ----------------------------------------------------------------------
    Western America Resources Inc.
    Unaudited Consolidated Statement of Changes in Financial Position
    For the three month period ended
                                                July 31       September 30
                                                   1998               1997
                                           ------------       ------------
    Cash provided by (used in)
    Operating activities
      Net income (loss) for the period      $   127,824        $   (12,537)
      Items not involving cash
        Depreciation                             14,284                  -
                                           ------------       ------------
                                                142,108            (12,537)
      Changes in non-cash working capital
       balances
        Accounts receivable                    (112,475)            (1,041)
        Accounts payable and accrued
         liabilities                              3,319            (45,277)
        Inventory                              (390,747)                 -
        Prepaid expenses                          5,714                  -
        Income taxes                             (2,019)                 -
                                           ------------       ------------
                                               (354,100)           (58,855)
    Investing activities
      Expenditures on resource properties             -             (3,821)
      Capital asset additions                    (1,060)                 -
      Acquisition payable                      (760,000)                 -
                                           ------------       ------------
                                               (761,060)            (3,821)
                                           ------------       ------------
    Financing activities
      Issue of special warrants, net of
       issue costs                              428,730                  -
      Stock options exercised                    25,000                  -
      Advances from (to) affiliate               (7,500)            49,500
      Promissory note                           (20,000)                 -
      Long term debt                            (17,525)                 -
      Proceeds from short-term loan             315,000                  -
                                           ------------       ------------
                                                723,705             49,500
                                           ------------       ------------
    Decrease in cash during the period         (391,455)           (13,176)
    (Bank indebtedness) cash, beginning
     of period                               (1,231,422)            17,077
                                           ------------       ------------
    (Bank indebtedness) cash,
     end of period                          $(1,622,877)       $     3,901
    ----------------------------------------------------------------------
    ----------------------------------------------------------------------
    >>
    -0-                              09/16/98


/For further information:  Mr. Donald P. Caron, President, Western
America Resources Inc., (403) 496-9171, Fax: (403) 496-9172/ 
(WAR.) 
CO:  Western America Resources Inc.
ST:  Alberta
IN:  PAP
SU:  ERN 
-30- 
â
-0- (CNS) Sep/16/98   09:06
 
 
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