(All figures are in US dollars unless otherwise stated) VANCOUVER,
April 9 /PRNewswire-FirstCall/ -- New Gold Inc. ("New Gold") (TSX
and NYSE:AMEX - NGD) is pleased to announce the results of the
first five diamond drill holes from its Cerro San Pedro Sulfide
("CSP Sulfide") exploration project in San Luis Potosi, Mexico,
which include an intersection of 51.9 meters of manto-style sulfide
mineralization averaging 2.08 g/t gold, 131.8 g/t silver, 6.14%
zinc and 2.01% lead, followed by 169 meters of porphyry sulfide
mineralization averaging 0.61 g/t gold, 12.8 g/t silver, 0.48% zinc
and 0.14% lead beginning at a vertical depth of approximately 400
meters from surface (Hole CSPD-05C). In addition to these exciting
results at Cerro San Pedro, New Gold is pleased to report on the
recently completed Scoping Study for the sulfide resources at
Amapari. Cerro San Pedro Sulfide Drill Program The CSP Sulfide
project is focused on an area between the company's current open
pit gold-silver mine ("Oxide Pit') and the area of historic
underground mining some 500 meters to the southwest. The Cerro San
Pedro mine which commenced operations in 2007 is expected to
produce between 90,000 and 100,000 ounces of gold and between 1.1
and 1.3 million ounces of silver in 2009. New Gold controls a 100%
interest in the CSP Sulfide project. Seven holes have been
completed to date with all holes bottoming in mineralization after
encountering significant thicknesses of manto and porphyry style
sulfide mineralization. Assays received for the first five holes
along with a complete listing of drill hole location coordinates
and corresponding map are attached to this press release and are
available on New Gold's website. New Gold's President and CEO,
Robert Gallagher said; "The initial results from the CSP Sulfide
project are very encouraging. All holes have encountered both manto
and porphyry style sulfide mineralization where it was expected.
These results attest to the strength of the primary sulfide
mineralization system at Cerro San Pedro. It is our objective to
continue to evaluate the exploration upside of the CSP Sulfide
project, through an active drilling campaign for the balance of
this year. It's also interesting to note the similarity to the
porphyry mineralization to grades seen at the neighboring
Penasquito Mine to the north." The holes range in vertical depth
from 450 to 650 meters from surface and were drilled adjacent to an
area of historic underground mining where from 1928 to 1948 the
Asarco company is reported to have produced approximately 235,000
ounces of gold, 20 million ounces of silver, 405 million pounds of
zinc, 224 million pounds of lead, and 93 million pounds of copper
from a manto-style ore body. The Asarco manto occurs along the
contact between a sequence of tectonically folded and faulted
limestones and the San Pedro porphyry intrusive which hosts the
bulk of gold and silver-bearing oxide mineralization currently
being mined by open pit to the north. Sulfide mineralization in the
San Pedro porphyry below the Asarco mine appears to be a
continuation of a zone of gold-silver-zinc-lead bearing sulfide
mineralization that occurs immediately beneath the current CSP
oxide pit located approximately 500 meters to the north. The
objective of the CSP Sulfide project is to continue to explore
extensions to the historic Asarco manto system and to test the
continuity of sulfide mineralization as it extends between the
historic Asarco mine and the current oxide open pit. The results of
these first five holes confirm the presence of additional
manto-style mineralization adjacent to the historic Asarco mine
workings and indicate potential may also exist for a zone of
porphyry hosted sulfide mineralization extending from beneath the
current oxide open pit and the historic Asarco mine to the south.
The gold, silver, zinc and lead grades encountered in the drilling
program to date are similar to the grades of sulfide mineralization
at Goldcorp's Penasquito project in neighboring Zacatecas state,
and represent a sulfide target meriting further exploration.
Because this zone is only partially explored at present, no mineral
reserves and resources have been delineated for the CSP Sulfide
project and the current estimates of mineral reserves and resources
for Cerro San Pedro do not include material from the sulfide
mineralization. This first phase of the CSP Sulfide project
includes a further 2,900 meters of drilling and New Gold has
recently commissioned a second core rig to accelerate the program
for completion during the second quarter. The company is also
developing plans for a second phase of exploration that, if
drilling results continue to prove positive, would involve further
delineation drilling to define the overall size and extent of the
CSP Sulfide system and, if results warrant, a scoping study during
the second half of 2009. ALS Chemex of Vancouver, British Columbia,
Canada has completed all of New Gold's analytical work for this
drilling campaign. The analytical method used is fire assay with
atomic absorption finish for gold and silver and geochemical ICP
analysis for zinc, lead and copper. ALS Chemex is certified by the
ISO 9001:2000 and ISO 17025:2005 standards. Additionally, New Gold
maintains a rigorous and systematic quality control program using
project specific analytical standards and blanks. The Qualified
Person, as defined by Canadian NI 43-101, responsible for the
design and conduct of the work performed is Mr. Mark A. Petersen,
Certified Professional Geologist and Vice President of Exploration
for New Gold Inc. Amapari Sulfides Scoping Study New Gold is also
pleased to report that AMC Mining Consultants (Canada) Ltd (AMC)
has completed a Scoping Study to assess the potential for mining of
sulfide mineral resources and the remaining oxide mineral resources
with a new project involving the construction of a two stage ball
mill and carbon-in-leach ("CIL") processing plant at the company's
Amapari project in northern Brazil. The Amapari open pit operation
was placed on temporary care and maintenance in January 2009 due to
the increasing occurrence of transition oxide material in the pits
that was not economic under the current crushing and heap leach
processing set-up. Mining of the sulfide mineral resources has not
previously been evaluated in a pre-feasibility study or feasibility
study. Amapari has previously disclosed mineral resources
containing a total of 1.14 million gold ounces in the measured and
indicated categories (22.9 million tonnes at 1.54 g/t Au) of which
63% are in sulfides and 1.04 million gold ounces in the inferred
category (13.7 million tonnes at 2.37 g/t Au) of which 93% are in
sulfides. Below are the primary parameters used in AMC's Scoping
Study which examines the potential for mining of the sulfide and
the remaining oxide mineralization via a combination of open pit
and underground mining and processing by conventional milling and a
CIL plant. - Gold price of $US750 per ounce and BRL to US$ exchange
rate of 1.90. - The conceptual mine design and plan assumes
extensions to, and deepening of three existing conventional open
pits, and an underground mine employing open stoping. - Steady
state production of around one million tonnes per year from open
pit mining and 0.5 million tonnes per year from underground mining.
Conventional crush-grind-CIL processing achieving 90% recovery.
Gold production would average 86,000 ounces per year over the 14
year life of the project, averaging 100,000 ounces per year for the
second through ninth year of the project. - Initial preliminary
capital expenditures estimates of approximately $110 million which
include engineering, procurement and construction costs for the
proposed new mill, open pit, and underground mine development. Life
of mine sustaining capital totals $107 million. Operating costs per
tonne of ore developed in the study are $8.96 for open pit mining,
$17.47 for underground mining, $10.85 and $12.51 for processing of
oxides and sulfides respectively and $5.00 for general and
administrative costs. - Life of mine projected cash flow of US$112
million (constant 2009 dollars, before taxes and depreciation) with
Net Present Value at 5% discount rate of US$41 million and an
Internal Rate of Return of 11 percent. A 10% change in gold price
results in differences of about US$90 million in Net Cash Flow and
US$60 million in Net Present Value. This assessment is preliminary
in nature, containing inferred mineral resources that are
considered too speculative geologically to have the economic
consideration applied to them that would enable them to be
categorized as mineral reserves. There is no certainty that the
preliminary assessment will be realized. AMC has made a number of
recommendations for additional work to further assess the potential
for development of the sulfide and oxide mineral resource at
Amapari including additional drilling to upgrade the classification
of the current Inferred mineralization resource inventory to
Measured and Indicated status. Robert Gallagher, President and CEO
of New Gold said: "The AMC Scoping Study indicates that there is
potential for the economic exploitation of the remaining oxide and
sulfide mineral resource at Amapari. Additional work is justified
to improve the reliability of the estimates and to further
investigate the opportunities that exist. In addition, New Gold's
land package extends over a 100 kilometer long trend of prospective
greenstone terrain in the prolific Guyana Shield, offering
exploration potential beyond that of the area of study in the AMC
Scoping Study." New Gold is an intermediate gold mining company
with operating assets in Mexico and Australia and two development
projects in Canada and Chile. For further information on New Gold,
please visit our website at http://www.newgold.com/. CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain information
contained in this press release, including any information relating
to New Gold's future financial or operating performance, may be
deemed "forward looking". All statements in this press 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 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: New Gold's operations are subject to 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 necessary licenses
and permits; 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 available at http://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 press 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. CAUTIONARY NOTE TO
U.S. READERS CONCERNING ESTIMATES OF MEASURED, INDICATED AND
INFERRED RESOURCES Information concerning the properties and
operations of New Gold has been prepared in accordance with
Canadian standards under applicable Canadian securities laws, and
may not be comparable to similar information for United States
companies. The terms "Mineral Resource", "Measured Mineral
Resource", "Indicated Mineral Resource" and "Inferred Mineral
Resource" used in this press release are Canadian mining terms as
defined in accordance with NI 43-101 under guidelines set out in
the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM")
Standards on Mineral Resources and Mineral Reserves adopted by the
CIM Council on December 11, 2005. While the terms "Mineral
Resource", "Measured Mineral Resource", "Indicated Mineral
Resource" and "Inferred Mineral Resource" are recognized and
required by Canadian regulations, they are not defined terms under
standards of the United States Securities and Exchange Commission.
Under United States standards, mineralization may not be classified
as a "reserve" unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time the reserve calculation is made. As such,
certain information contained in this press release concerning
descriptions of mineralization and resources under Canadian
standards is not comparable to similar information made public by
United States companies subject to the reporting and disclosure
requirements of the United States Securities and Exchange
Commission. An "Inferred Mineral Resource" has a great amount of
uncertainty as to its existence and as to its economic and legal
feasibility. It cannot be assumed that all or any part of an
"Inferred Mineral Resource" will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or other economic
studies. Readers are cautioned not to assume that all or any part
of Measured or Indicated Resources will ever be converted into
Mineral Reserves. Readers are also cautioned not to assume that all
or any part of an "Inferred Mineral Resource" exists, or is
economically or legally mineable. In addition, the definitions of
"Proven Mineral Reserves" and "Probable Mineral Reserves" under CIM
standards differ in certain respects from the standards of the
United States Securities and Exchange Commission. To view Figure 1:
Cerro San Pedro Sulfide Project - Drill Hole Locations &
Surface Geology Map - April, 2009, please visit the following link:
http://files.newswire.ca/764/Cerro_San_Pedro.pdf
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Cerro San Pedro Sulfide Project - Drill Hole Collar Locations
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Drill Northing Easting Elevation Length Azimuth Inclination Hole
UTM UTM (masl) (m)
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CSPD-01C 2457167 313724 2004 693.0 050(degrees) -75(degrees)
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CSPD-02C 2457425 313892 2009 462.0 0(degrees) -90(degrees)
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CSPD-03C 2457502 313888 2010 543.0 0(degrees) -90(degrees)
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CSPD-04C 2457251 313777 1995 699.0 0(degrees) -90(degrees)
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CSPD-05C 2457366 313763 1998 713.0 085(degrees) -73(degrees)
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CSPD-06C 2457575 313875 2017 500.0 0(degrees) -90(degrees)
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CSPD-07C 2457325 313735 1996 In 0(degrees) -90(degrees) progress
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CSPD-08C 2457576 313876 2017 522.0 090(degrees) -70(degrees)
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The table below provides a summary of results for the drill holes
reported herein:
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Cerro San Pedro Sulfide Project - Drill Hole Results
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Rock Type / Drill From To Length Au Ag Zn Pb Cu Mineralization Hole
(m) (m) (m) (g/t) (g/t) (%) (%) (%) Comments
-------------------------------------------------------------------------
CSPD-01C 0.0 459.6 459.6 0.03 1.1 na na na Limestone 459.6 460.1
0.5 1.83 982.0 14.35 15.80 0.50 Manto-style sulfides 460.1 507.8
47.7 0.01 0.8 na na na Limestone 507.8 513.3 5.5 0.06 1.8 0.06 0.02
0.00 Porphyry 513.3 518.0 4.7 3.18 375.5 16.90 5.19 0.17
Manto-style sulfides 518.0 524.0 6.0 1.73 40.3 1.82 0.54 0.03
Manto-style sulfides 524.0 693.0 169.0 0.58 12.2 0.65 0.14 0.01
Porphyry - ----- ----- ----- ---- ---- ---- ---- ---- entire
interval ---------- includes 524.0 544.0 20.0 1.01 27.6 0.85 0.39
0.02 Porphyry includes 544.0 680.0 136.0 0.46 8.8 0.58 0.09 0.01
Porphyry includes 680.0 690.0 10.0 1.47 28.6 1.33 0.21 0.03
Porphyry includes 690.0 693.0 3.0 0.140 6.6 0.32 0.07 0.01 Porphyry
-------------------------------------------------------------------------
CSPD-02C 0.0 372.0 372.0 0.03 2.4 na na na Limestone 372.0 378.0
6.0 0.93 40.7 2.22 0.40 0.01 Limestone (poor core rec'vy) 378.0
381.0 3.0 na na na na na Void - mine working 381.0 387.0 6.0 0.96
80.2 2.18 1.16 0.02 Manto-style sulfides 387.0 396.0 9.0 1.68 171.1
9.25 2.15 0.03 Manto-style sulfides 396.0 424.0 28.0 0.04 2.1 0.04
0.03 0.00 Limestone 424.0 426.0 2.0 na na na na na Void - mine
working 426.0 431.2 5.2 1.41 517.5 16.80 9.07 0.33 Manto-style
sulfides 431.2 432.2 1.0 na na na na na Void - mine working 432.2
434.6 2.4 3.75 33.5 7.66 0.29 0.01 Manto-style sulfides 434.6 462.0
27.4 0.29 8.5 0.39 0.12 0.01 Porphyry (hole terminated early by bad
ground conditions)
-------------------------------------------------------------------------
CSPD-03C 0.0 380.0 380.0 0.01 1.1 na na na Limestone 380.0 392.9
12.9 1.82 59.9 7.78 0.61 0.03 Manto-style sulfides 392.9 427.0 34.1
0.04 1.5 0.04 0.01 0.00 Limestone 427.0 432.0 5.0 na na na na na
Void - mine working 432.0 434.6 2.6 3.48 69.4 9.50 0.46 0.05
Manto-style sulfides 434.6 543.0 108.4 0.37 4.5 0.38 0.04 0.01
Porphyry
-------------------------------------------------------------------------
CSPD-04C 0.0 476.7 476.7 0.03 1.9 na na na Limestone 476.7 481.0
4.3 3.17 243.6 7.62 4.15 0.10 Manto-style sulfides 481.0 493.9 12.9
0.63 12.25 1.00 0.07 0.01 Manto-style sulfides 493.9 699.0 205.1
0.78 8.79 0.58 0.08 0.01 Porphyry - ----- ----- ----- ---- ----
---- ---- ---- entire interval ---------- includes 493.9 573.0 79.1
1.24 13.31 1.08 0.11 0.01 Porphyry includes 573.0 699.0 126.0 0.50
5.95 0.27 0.06 0.01 Porphyry
-------------------------------------------------------------------------
CSPD-05C 0.0 407.7 407.7 0.02 1.05 na na na Limestone 407.7 410.3
2.6 2.68 202.1 7.37 3.80 0.18 Manto-style sulfides 410.3 417.0 6.7
0.05 2.52 na na na Limestone 417.0 420.0 3.0 na na na na na Void -
mine workings 420.0 429.5 9.5 0.06 6.57 na na na Limestone 429.5
432.0 2.5 na na na na na Void - mine workings 432.0 483.9 51.9 2.08
131.8 6.14 2.01 0.03 Manto-style sulfides 483.9 648.0 164.1 0.62
13.2 0.49 0.15 0.01 Porphyry 648.0 688.0 40.0 0.14 1.51 na na na
Limestone 688.0 713.0 25.0 0.10 0.60 0.01 0.00 0.01 Porphyry
-------------------------------------------------------------------------
CSPD-06C 0.0 386.2 386.2 Analyses Pending Limestone 386.2 500.0
113.8 Analyses Pending Porphyry
-------------------------------------------------------------------------
CSPD-07C In progress Analyses Pending
-------------------------------------------------------------------------
CSPD-08C 0.0 357.0 357.0 Analyses Pending Limestone 357.0 359.2 2.2
Analyses Pending Manto-style sulfides 359.2 522.0 162.8 Analyses
Pending Porphyry
-------------------------------------------------------------------------
Note: 'na' indicates no analysis performed for interval
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Amapari Mineral Resources Updated mineral resource statements for
the Amapari mine, as of December 31, 2008, are presented in the
table below:
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Amapari Mineral Resource Statement as of December 31, 2008
(1),(2),(3),(4)
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Metal Grade Contained Metal
-------------------------------------------------------------------------
Tonnes 000's Gold g/t Gold Koz
------------------------------------------------ Measured 8,700
1.03 288 Indicated 14,249 1.85 848 ------ ---- --- Total M&I
22,949 1.54 1,136 Inferred 13,716 2.37 1,045
-------------------------------------------------------------------------
Notes to the mineral resource statements are provided in a separate
table below.
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The Qualified Person as defined under Canadian NI 43-101
responsible for the preparation of the Amapari Mineral Resource
Statement is Mr. Rex Berthelsen, Member AusIMM and Principal
Geologist for New Gold Inc.
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Notes to Mineral Reserve & Resource Statements
-------------------------------------------------------------------------
1) Mineral resources for the Amapari mine have been estimated using
industry standard three-dimensional geostatistical block model
estimation methods (e.g. one or a combination of ordinary kriging,
multiple indicator kriging or inverse distance to an exponential
power) constrained by geological and metal grade domains in
accordance with the standards of the Canadian Institute of Mining,
Metallurgy and Petroleum and National Instrument 43-101, or the
AusIMM JORC equivalent.
-------------------------------------------------------------------------
2) Amapari mineral resources have been estimated based on a gold
price of US$750/oz and a variable lower grade cut-offs ranging from
0.6 g/t to 0.8 g/t gold for open pit oxide and sulphide resources
and 1.7 g/t gold for underground sulphide resources that vary
between individual mineral resources and their proximity to the
Amapari operation processing facility.
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3) Inferred mineral resources are not known with the same degree of
certainty as measured and indicated resources, do not have
demonstrated economic viability, and are exclusive of mineral
reserves.
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4) Numbers may not add due to rounding.
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DATASOURCE: New Gold Inc. CONTACT: Melanie Hennessey, Vice
President Investor Relations, New Gold Inc., Direct: (604)
639-0022, Toll-free: (888) 315-9715, Email: , Website:
http://www.newgold.com/
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