NEWS RELEASE
New Gold
Provides Update on its Activities to Resume Mining Operations at its
Cerro San Pedro Mine
Vancouver, B.C. - (December 3, 2009) - New Gold Inc. ("New
Gold") (TSX and NYSE AMEX-NGD) announces an update on its activities
to resume mining operations at its Cerro San Pedro Mine. Today, Minera San Xavier ("MSX"), New Gold's
wholly owned Mexican subsidiary that holds the mining concessions of the
Cerro San Pedro Mine, filed a second appeal related to the suspension of
operations.
The first appeal was filed on November 5, 2009 with the Third Federal
District Court in Mexico City. That appeal seeks to overturn the Federal
Fiscal Administration Court's ruling that ordered SEMARNAT, the Mexican
government's environmental protection agency, to cancel the project's
Environmental Impact Statement ("EIS"). The court is waiting
for SEMARNAT, an associated party, to file its response to this appeal
before finalizing the date to commence a trial.
In addition, MSX today filed a separate appeal with the District Court in
San Luis Potosi. The objective of the appeal is to overturn the order
that required suspension of mining operations as a result of the
cancellation of the project's EIS. Based on the advice of its Mexican
legal advisers, New Gold believes that claims that the EIS is required to
be in place to operate its Cerro San Pedro Mine have no legal basis.
This most recent appeal includes a request for a temporary injunction
which would allow the mine to continue operating while the appeal goes to
trial and the court hears the arguments in relation to the suspension
order. It is expected that a decision on the injunction request will be
provided within 10 days. In the event an injunction is not granted,
mining operations would remain suspended and the appeal would go to trial
where all merits of the case would be heard and a decision made. If the
matter is heard in court and the mine suspension is prolonged, New Gold
will continue to take all measures necessary to actively safeguard the
integrity of the mine, its environment, its employees and residents of
the surrounding communities.
The company is working cooperatively with Mexican environmental agencies
with a view to permanently addressing the issues surrounding the EIS at
the Cerro San Pedro Mine. To this end, MSX has filed with SEMARNAT a
request for authorization of a new EIS. The request was accepted by
SEMARNAT and evaluation has commenced.
"In addition to using all of the legal channels available to resume
mining operations in the shortest time possible, we are in active
dialogue with all levels of the government and administrative bodies
associated with the project," says Robert Gallagher, New Gold
President and CEO. "We believe that the legal processes initiated by
the company and the opportunity to constructively work with all parties
involved will provide the information necessary to resume operations."
MSX continues to employ 509 employees and contractors at the Cerro San
Pedro Mine, over 60 per cent of whom are from
local villages surrounding the mine. MSX has an enviable record of
compliance with Mexican and international environmental standards. The
company has strived to improve the quality of life of its employees and
that of the surrounding communities through various initiatives
including: enhancement of education, provision of free medical services
and development of improved local infrastructure. The company enjoys a
high degree of acceptance by the greater majority of the residents of
area surrounding the mine due to its outstanding record of caring for the
environment and its positive work in the communities.
New Gold will continue to provide updates on this matter.
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 270,000 and 300,000
ounces of gold in 2009, growing to over 400,000 ounces in 2012 from
assets currently owned by the company. New Gold has a strong portfolio of
mining, development and exploration assets in mining friendly
jurisdictions. For further information on the company, please visit
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: 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; 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 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.
For further information, please contact:
Hannes Portmann
Director, Corporate Development and Investor Relations
New Gold Inc.
(416) 324-6014
Christine Marks
External Communications Coordinator and Investor Relations
New Gold Inc.
(604) 696-4100
info@newgold.com
www.newgold.com
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