VANCOUVER, March 17 /PRNewswire-FirstCall/ - New Gold Inc.
("New Gold") (TSX and NYSE AMEX: NGD) announces that the
restrictions to the Cerro San Pedro mine's explosives permits have
been removed which allows full operations to resume. The
restrictions were lifted following a ruling by a Federal District
Court in San Luis Potosi that
overturns an earlier court order prohibiting the use of explosives
at the mine. The renewal of the explosives permit was originally
challenged by a group opposed to the mine.
"We are very pleased with the outcome of this hearing and the
continued progress that is being made towards a long-term solution
that should enable uninterrupted operations at Cerro San Pedro,"
stated New Gold's President and CEO, Robert
Gallagher. "New Gold's Cerro San
Pedro Mine has an enviable record of compliance with Mexican
and international environmental standards and enjoys overwhelming
local support as a valuable corporate citizen."
Hearings are ongoing in relation to appeals against the
nullification of the Cerro San Pedro mine's 2006 Environmental
Impact Statement and the related order suspending mining operations
issued by PROFEPA, the Mexican environmental enforcement agency.
The shutdown order was suspended, allowing operations to continue
pending the outcome of the appeal cases. New Gold is working with
local and federal government officials to establish a long-term
solution that should result in uninterrupted operation of the Cerro
San Pedro mine allowing for continued financial and socio-economic
benefits to the city of San Luis
Potosi, the town of Cerro San Pedro as well as the
surrounding villages.
As the Cerro San Pedro mine is a heap leach operation with the
ability to increase the use of leased mining equipment, New Gold
expects to be able to offset the impact to production that resulted
from the delayed granting of the blasting permit. The company
maintains its gold production forecast at Cerro San Pedro for 2010
of 95,000 to 105,000 ounces at a total cash cost(1) of $390 to $410 per ounce sold, net of by-product
sales.
About New Gold
New Gold is an intermediate gold mining company with the
Mesquite Mine in the United
States, Cerro San Pedro Mine
in Mexico and Peak Mines in
Australia. The company is expected
to produce between 330,000 and 360,000 ounces of gold in 2010,
growing to over 400,000 ounces in 2012. In addition, New Gold has a
strong portfolio of development and exploration assets in North and
South America. For further
information on the company, please visit www.newgold.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this news release, including
any information relating to New Gold's future financial or
operating performance may be deemed "forward-looking". All
statements in this news release, other than statements of
historical fact, that address events or developments that New Gold
expects to occur, are "forward-looking statements". Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by the words "expects", "does
not expect", "plans", "anticipates", "does not anticipate",
"believes", "intends", "estimates", "projects", "potential",
"scheduled", "forecast", "budget" and similar expressions, or that
events or conditions "will", "would", "may", "could", "should" or
"might" occur. All such forward-looking statements are based on the
opinions and estimates of management as of the date such statements
are made and are subject to important risk factors and
uncertainties, many of which are beyond New Gold's ability to
control or predict. Forward-looking statements are necessarily
based on estimates and assumptions that are inherently subject to
known and unknown risks, uncertainties and other factors that may
cause New Gold's actual results, level of activity, performance or
achievements to be materially different from those expressed or
implied by such forward-looking statements. Such factors include,
without limitation: significant capital requirements; fluctuations
in the international currency markets and in the rates of exchange
of the currencies of Canada,
the United States, Australia, Brazil, Mexico and Chile; price volatility in the spot and
forward markets for commodities; impact of any hedging activities,
including margin limits and margin calls; discrepancies between
actual and estimated production, between actual and estimated
reserves and resources and between actual and estimated
metallurgical recoveries; changes in national and local government
legislation in Canada,
the United States, Australia, Brazil, Mexico and Chile or any other country in which New Gold
currently or may in the future carry on business; taxation;
controls, regulations and political or economic developments in the
countries in which New Gold does or may carry on business; the
speculative nature of mineral exploration and development,
including the risks of obtaining and maintaining the validity and
enforceability of the necessary licenses and permits and complying
with the permitting requirements of each jurisdiction that New Gold
operates, including, but not limited to, Mexico, where New Gold is involved with
ongoing challenges relating to its environmental impact statement
for Cerro San Pedro Mine; the lack
of certainty with respect to the Mexican and other foreign legal
systems, which may not be immune from the influence of political
pressure, corruption or other factors that are inconsistent with
the rule of law; the uncertainties inherent to current and future
legal challenges the company is or may become a party to, including
the third party claim related to the El Morro transaction with
respect to New Gold's exercise of its right of first refusal on the
El Morro copper-gold project in Chile and its partnership with Goldcorp Inc.;
diminishing quantities or grades of reserves; competition; loss of
key employees; additional funding requirements; actual results of
current exploration or reclamation activities; changes in project
parameters as plans continue to be refined; accidents; labour
disputes; defective title to mineral claims or property or contests
over claims to mineral properties. In addition, there are risks and
hazards associated with the business of mineral exploration,
development and mining, including environmental hazards, industrial
accidents, unusual or unexpected formations, pressures, cave-ins,
flooding and gold bullion losses (and the risk of inadequate
insurance or inability to obtain insurance, to cover these risks)
as well as "Risks Factors" included in New Gold's Annual
Information Form filed on March 31,
2009 and Management Information Circular filed on
April 15, 2009, both available at
www.sedar.com. Forward-looking statements are not guarantees of
future performance, and actual results and future events could
materially differ from those anticipated in such statements. All of
the forward-looking statements contained in this news release are
qualified by these cautionary statements. New Gold expressly
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
events or otherwise, except in accordance with applicable
securities laws.
(1) TOTAL CASH COSTS
"Total cash cost" per ounce figures are calculated in accordance
with a standard developed by The Gold Institute, which was a
worldwide association of suppliers of gold and gold products and
included leading North American gold producers. The Gold Institute
ceased operations in 2002, but the standard is widely accepted as
the standard of reporting cash cost of production in North America. Adoption of the standard is
voluntary and the cost measures presented may not be comparable to
other similarly titled measures of other companies. New Gold
reports total cash cost on a sales basis. Total cash cost includes
mine site operating costs such as mining, processing,
administration, royalties and production taxes, but is exclusive of
amortization, reclamation, capital and exploration costs. Total
cash cost is reduced by any by-product revenue and is then divided
by ounces sold to arrive at the total by-product cash cost of
sales. The measure, along with sales, is considered to be a key
indicator of a company's ability to generate operating earnings and
cash flow from its mining operations. This data is furnished to
provide additional information and is a non-GAAP measure. Total
cash cost presented do not have a standardized meaning prescribed
by GAAP and may not be comparable to similar measures presented by
other mining companies. It should not be considered in isolation as
a substitute for measures of performance prepared in accordance
with GAAP and is not necessarily indicative of operating costs
presented under GAAP. A reconciliation will be provided in the
MD&A accompanying the audited annual financial statements.
SOURCE New Gold Inc.