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'sexplosives permits have been removed which allows full operations toresume. The restrictions were lifted following a ruling by a FederalDistrict Court in San Luis Potosithat overturns an earlier court order prohibiting the use of explosivesat the mine. The renewal of the explosives permit was originallychallenged by a group opposed to the mine.
"We are very pleasedwith the outcome of this hearing and the continued progress that isbeing made towards a long-term solution that should enableuninterrupted operations at Cerro San Pedro," stated New Gold'sPresident and CEO, Robert Gallagher. "New Gold's Cerro San Pedro Minehas an enviable record of compliance with Mexican and internationalenvironmental standards and enjoys overwhelming local support as avaluable corporate citizen."
Hearings are ongoing in relation toappeals against the nullification of the Cerro San Pedro mine's 2006Environmental Impact Statement and the related order suspending miningoperations issued by PROFEPA, the Mexican environmental enforcementagency. The shutdown order was suspended, allowing operations tocontinue pending the outcome of the appeal cases. New Gold is workingwith local and federal government officials to establish a long-termsolution that should result in uninterrupted operation of the Cerro SanPedro mine allowing for continued financial and socio-economic benefitsto the city of San Luis Potosi, the town of Cerro San Pedro as well as the surrounding villages.
Asthe Cerro San Pedro mine is a heap leach operation with the ability toincrease the use of leased mining equipment, New Gold expects to beable to offset the impact to production that resulted from the delayedgranting of the blasting permit. The company maintains its goldproduction forecast at Cerro San Pedro for 2010 of 95,000 to 105,000ounces 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 ouncesof gold in 2010, growing to over 400,000 ounces in 2012. In addition,New Gold has a strong portfolio of development and exploration assetsin North and South America. For further information on the company, please visit www.newgold.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certaininformation contained in this news release, including any informationrelating to New Gold's future financial or operating performance may bedeemed "forward-looking". All statements in this news release, otherthan statements of historical fact, that address events or developmentsthat New Gold expects to occur, are "forward-looking statements".Forward-looking statements are statements that are not historical factsand 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 thatevents or conditions "will", "would", "may", "could", "should" or"might" occur. All such forward-looking statements are based on theopinions and estimates of management as of the date such statements aremade and are subject to important risk factors and uncertainties, manyof which are beyond New Gold's ability to control or predict.Forward-looking statements are necessarily based on estimates andassumptions that are inherently subject to known and unknown risks,uncertainties and other factors that may cause New Gold's actualresults, level of activity, performance or achievements to bematerially different from those expressed or implied by suchforward-looking statements. Such factors include, without limitation:significant capital requirements; fluctuations in the internationalcurrency 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 margincalls; discrepancies between actual and estimated production, betweenactual and estimated reserves and resources and between actual andestimated metallurgical recoveries; changes in national and localgovernment legislation in Canada, the United States, Australia, Brazil, Mexico and Chileor any other country in which New Gold currently or may in the futurecarry on business; taxation; controls, regulations and political oreconomic developments in the countries in which New Gold does or maycarry on business; the speculative nature of mineral exploration anddevelopment, including the risks of obtaining and maintaining thevalidity and enforceability of the necessary licenses and permits andcomplying with the permitting requirements of each jurisdiction thatNew 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 foreignlegal systems, which may not be immune from the influence of politicalpressure, corruption or other factors that are inconsistent with therule of law; the uncertainties inherent to current and future legalchallenges the company is or may become a party to, including the thirdparty claim related to the El Morro transaction with respect to NewGold's exercise of its right of first refusal on the El Morrocopper-gold project in Chile and itspartnership with Goldcorp Inc.; diminishing quantities or grades ofreserves; competition; loss of key employees; additional fundingrequirements; actual results of current exploration or reclamationactivities; changes in project parameters as plans continue to berefined; accidents; labour disputes; defective title to mineral claimsor property or contests over claims to mineral properties. In addition,there are risks and hazards associated with the business of mineralexploration, development and mining, including environmental hazards,industrial accidents, unusual or unexpected formations, pressures,cave-ins, flooding and gold bullion losses (and the risk of inadequateinsurance or inability to obtain insurance, to cover these risks) aswell as "Risks Factors" included in New Gold's Annual Information Formfiled 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 thoseanticipated in such statements. All of the forward-looking statementscontained in this news release are qualified by these cautionarystatements. New Gold expressly disclaims any intention or obligation toupdate or revise any forward-looking statements, whether as a result ofnew information, events or otherwise, except in accordance withapplicable securities laws.
(1) TOTAL CASH COSTS
"Totalcash cost" per ounce figures are calculated in accordance with astandard developed by The Gold Institute, which was a worldwideassociation of suppliers of gold and gold products and included leadingNorth American gold producers. The Gold Institute ceased operations in2002, but the standard is widely accepted as the standard of reportingcash cost of production in North America.Adoption of the standard is voluntary and the cost measures presentedmay not be comparable to other similarly titled measures of othercompanies. New Gold reports total cash cost on a sales basis. Totalcash cost includes mine site operating costs such as mining,processing, administration, royalties and production taxes, but isexclusive of amortization, reclamation, capital and exploration costs.Total cash cost is reduced by any by-product revenue and is thendivided by ounces sold to arrive at the total by-product cash cost ofsales. The measure, along with sales, is considered to be a keyindicator of a company's ability to generate operating earnings andcash flow from its mining operations. This data is furnished to provideadditional information and is a non-GAAP measure. Total cash costpresented do not have a standardized meaning prescribed by GAAP and maynot be comparable to similar measures presented by other miningcompanies. It should not be considered in isolation as a substitute formeasures of performance prepared in accordance with GAAP and is notnecessarily indicative of operating costs presented under GAAP. Areconciliation will be provided in the MD&A accompanying theaudited annual financial statements.
SOURCE New Gold Inc.