New Gold Announces Higher El Morro Reserves and Resources
(All figures are in US dollars unless otherwise indicated)
VANCOUVER, Feb. 10 /PRNewswire/ - New Gold Inc. ("New Gold") (TSX and NYSEAMEX:NGD) today announces that Goldcorp Inc. ("Goldcorp"), its 70% joint venture partner in the El Morro project, has updated the reserves and resources for the project as of December 31, 2010. Highlights attributable to New Gold's 30% share of the project include:
- 22% increase in Proven and Probable gold reserves to 2.5 million
ounces
- 8% increase in Proven and Probable copper reserves to 1.8 billion
pounds
- 1.2 million ounce and 0.5 billion pound increase in Inferred gold and
copper resources, respectively, reflecting increased tonnes and
higher gold and copper grades in the deeper portions of the La
Fortuna deposit as it extends below the current reserve pit(1)
Combining this El Morro update with the reserves and resources at New Gold's other properties, as updated on February 2, 2011, brings the company's December 31, 2010 Proven and Probable gold reserves to 8.4 million ounces and Measured and Indicated gold resources, inclusive of reserves, to 12.9 million ounces. The 8.4 million ounces of Proven and Probable gold reserves represents a 0.8 million ounce increase over the year end 2009 balance of 8.2 million ounces when taking into account the approximately 0.6 million ounces that were mined during 2010. Further updates to El Morro reserves and resources are anticipated as Goldcorp intends to commence drilling programs following the approval of the Environmental Impact Assessment ("EIA").
"We are pleased with the El Morro reserve and resource update and believe the significant increase in inferred resources substantiates our belief in the upside of this world-class project," stated Robert Gallagher, President and Chief Executive Officer. "We are particularly excited to have a highly motivated partner in Goldcorp who is poised to begin drilling programs in the coming months to further delineate the pit at El Morro and expand on positive results from other targets on the property."
For additional detail on Reserves and Resources, including related assumptions and disclosure, please refer to the section below entitled Detailed Reserves and Resources Summary at the conclusion of this news release.
Note 1: Per Goldcorp's estimation criteria: All measured and indicated
resources are contained within the current mineral reserve pit and all
mineral resources occurring external to the reserve pit are classified as
inferred. Thus, some measured and indicated resources that were included
in the previous mineral resource statement have been reclassified as
inferred in this updated mineral resource statement.
Detailed Reserve and Resource Summary
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Mineral Reserves and Resources Summary as of December 31, 2010
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Contained Metals
-------------------------------------------------------------------------
Gold Silver Copper Zinc Lead
(Koz) (Koz) (Mlbs) (Mlbs) (Mlbs)
-------------------------------------------------------------------------
Reserves
Proven 2,662 24,074 930 - -
Probable 5,706 22,334 1,956 - -
----- ------ -----
Total P&P 8,368 46,408 2,886 - -
-------------------------------------------------------------------------
Resources
Measured 4,243 35,388 1,939 355 73
Indicated 8,671 48,126 1,599 765 133
----- ------ ----- --- ---
Total M&I 12,914 83,514 3,538 1,120 206
-------------------------------------------------------------------------
Inferred 4,097 48,531 1,128 1,436 254
-------------------------------------------------------------------------
See Notes to Mineral Reserve & Resource Statements below for further
detail on Reserve and Resource calculations.
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Mineral Reserve Statement as of December 31, 2010
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Metal Grade Contained Metal
-------------------------------------------------------------------------
Tonnes Gold Silver Copper Gold Silver Copper
000's g/t g/t % Koz Koz Mlbs
-------------------------------------------------------------------------
Mesquite
Proven 13,915 0.74 - - 331 - -
Probable 155,198 0.56 - - 2,794 - -
------- ---- -----
Mesquite P&P 169,113 0.57 - - 3,125 - -
-------------------------------------------------------------------------
Cerro San Pedro
Proven 36,294 0.61 20.3 - 712 23,688 -
Probable 33,473 0.51 17.6 - 549 18,941 -
------ ---- ---- --- ------
CSP P&P 69,767 0.56 19.0 - 1,261 42,629 -
-------------------------------------------------------------------------
Peak Mines
Proven 1,689 4.75 7.1 0.72 258 386 27
Probable 1,724 4.0 5.4 0.82 222 299 31
----- --- --- ---- --- --- --
Peak P&P 3,413 4.4 6.2 0.77 480 685 58
-------------------------------------------------------------------------
New Afton
Proven - - - - - -
Probable 47,400 0.69 2.03 0.95 1,052 3,094 993
------ ---- ---- ---- ----- ----- ---
New Afton P&P 47,400 0.69 2.03 0.95 1,052 3,094 993
-------------------------------------------------------------------------
El Morro 100% Basis 30% Basis
----------------------------------------------------------
Proven 240,020 0.59 - 0.57 1,361 - 903
Probable 291,103 0.39 - 0.48 1,089 - 932
------- ---- ---- ----- ---
El Morro P&P 531,123 0.48 - 0.52 2,450 - 1,835
-------------------------------------------------------------------------
See Notes to Mineral Reserve & Resource Statements below for further
detail on Reserve and Resource calculations.
------------------------------------------------------------------------
Mineral Resource Statement (Inclusive of Reserves) as of
December 31, 2010
-------------------------------------------------------------------------
Metal Grade
-------------------------------------------------------------------------
Tonnes Gold Silver Copper Zinc Lead
000's g/t g/t % % %
-------------------------------------------------------------------------
Mesquite
Measured 24,992 0.61 - - - -
Indicated 336,006 0.48 - - - -
------- ----
Mesquite M&I 360,998 0.49 - - - -
-------------------------------------------------------------------------
Cerro San Pedro
Measured
(oxide) 39,566 0.43 16.48 - - -
Indicated
(oxide) 65,478 0.29 13.04 - - -
------ ---- -----
CSP M&I
(oxide) 105,044 0.34 14.34 - - -
Measured
(sulphide) 19,405 0.53 16.78 - 0.83 0.17
Indicated
(sulphide) 51,004 0.4 10.84 - 0.68 0.12
------ --- ----- ---- ----
CSP M&I
(sulphide) 70,409 0.4 12.48 - 0.72 0.13
-------------------------------------------------------------------------
Peak Mines
Measured 3,091 4.9 8.0 0.90 - -
Indicated 4,205 3.6 5.8 1.15 - -
----- --- --- ----
Peak M&I 7,296 4.2 6.7 1.04 - -
-------------------------------------------------------------------------
New Afton
Measured 35,100 0.91 2.8 1.26 - -
Indicated 29,900 0.67 2.2 0.85 - -
------ ---- --- ----
New Afton M&I 65,000 0.80 2.6 1.07 - -
-------------------------------------------------------------------------
El Morro 100% Basis
-----------------------------------------------------------
Measured 240,020 0.59 - 0.57 - -
Indicated 291,103 0.39 - 0.48 - -
------- ---- ----
El Morro M&I 531,123 0.48 - 0.52 - -
-------------------------------------------------------------------------
---------------------------------------------------------------
Contained Metal
---------------------------------------------------------------
Gold Silver Copper Zinc Lead
Koz Koz Mlbs Mlbs Mlbs
---------------------------------------------------------------
Mesquite
Measured 490 - - - -
Indicated 5,185 - - - -
-----
Mesquite M&I 5,675 - - - -
---------------------------------------------------------------
Cerro San Pedro
Measured
(oxide) 547 20,964 - - -
Indicated
(oxide) 610 27,451 - - -
--- ------
CSP M&I
(oxide) 1,157 48,415 - - -
Measured
(sulphide) 331 10,469 - 355 73
Indicated
(sulphide) 656 17,776 - 765 133
--- ------ --- ---
CSP M&I
(sulphide) 987 28,245 - 1,120 206
---------------------------------------------------------------
Peak Mines
Measured 487 795 61 - -
Indicated 487 784 107 - -
--- --- ---
Peak M&I 974 1,579 168 - -
---------------------------------------------------------------
New Afton
Measured 1,027 3,160 975 - -
Indicated 644 2,115 560 - -
--- ----- ---
New Afton M&I 1,671 5,275 1,535 - -
---------------------------------------------------------------
El Morro 30% Basis
---------------------------------------------------------------
Measured 1,361 - 903 - -
Indicated 1,089 - 932 - -
----- ---
El Morro M&I 2,450 - 1,835 -
---------------------------------------------------------------
-------------------------------------------------------------------------
Inferred Resource Statement as of December 31, 2010
-------------------------------------------------------------------------
Metal Grade
-------------------------------------------------------------------------
Tonnes Gold Silver Copper Zinc Lead
000's g/t g/t % % %
-------------------------------------------------------------------------
Mesquite 59,232 0.53 - - - -
-------------------------------------------------------------------------
Cerro San Pedro
Open Pit
--------
Inferred
--------
Resources
---------
Oxides 42,380 0.2 8.03 - - -
Sulphides 40,457 0.29 11.63 - 0.9 0.07
------ ---- ----- --- ----
82,837 0.24 9.79 -
----------------------------------------------------------
Underground
-----------
Inferred
--------
Resources
---------
Manto
Sulphides 6,098 1.89 105.15 - 4.71 1.42
-------------------------------------------------------------------------
Peak Mines 3,665 2.6 4.0 1.54 - -
-------------------------------------------------------------------------
New Afton 25,200 0.54 1.7 0.66 - -
-------------------------------------------------------------------------
El Morro 100% Basis
-----------------------------------------------------------
137,555 0.99 - 0.70 - -
-------------------------------------------------------------------------
---------------------------------------------------------------
Contained Metal
---------------------------------------------------------------
Gold Silver Copper Zinc Lead
Koz Koz Mlbs Mlbs Mlbs
---------------------------------------------------------------
Mesquite 1,019 - - - -
---------------------------------------------------------------
Cerro San Pedro
Open Pit
--------
Inferred
--------
Resources
---------
Oxides 273 10,941 - - -
Sulphides 377 15,127 - 803 63
--- ------ --- --
650 26,068 - 803 63
------------------------------------------------
Underground
-----------
Inferred
--------
Resources
---------
Manto
Sulphides 371 20,615 - 633 191
---------------------------------------------------------------
Peak Mines 306 471 124 - -
---------------------------------------------------------------
New Afton 438 1,377 367 - -
---------------------------------------------------------------
El Morro 30% Basis
------------------------------------------------
1,313 637 - -
---------------------------------------------------------------
See Notes to Mineral Reserve & Resource Statements below for further
detail on Reserve and Resource calculations.
-------------------------------------------------------------------------
Notes to Mineral Reserve & Resource Statements
-------------------------------------------------------------------------
Mineral reserves are contained within measured and indicated mineral
resources. Measured and indicated mineral resources that are not
mineral reserves do not have demonstrated economic viability. 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.
1) Mineral Reserves
----------------
Mineral reserves for the company's mining operations and development
projects have been calculated based on the following metal prices and
lower cut-off criteria:
----------------------------------------------------------------------
Gold Silver Copper
Mineral Property US$/oz US$/oz US$/lb Lower cutoff
----------------------------------------------------------------------
Mesquite $900 - - 0.19 g/t Au - Oxide
reserves
0.37 g/t Au - Non-oxide
reserves
----------------------------------------------------------------------
Cerro San Pedro $900 $15.00 - US$2.58/t NSR
----------------------------------------------------------------------
Peak Mines $900 $15.00 $2.25 AU$123 - 156/t NSR
----------------------------------------------------------------------
New Afton $800 $12.00 $2.00 US$19/t NSR
----------------------------------------------------------------------
El Morro $950 - $2.00 0.40 g/t Au
----------------------------------------------------------------------
Mineral reserves have been estimated and reported in accordance with
the standards of the Canadian Institute of Mining, Metallurgy and
Petroleum and National Instrument 43-101, or the AusIMM JORC
equivalent.
-------------------------------------------------------------------------
2) Mineral Resources
-----------------
Mineral resources for the company's mining operations and development
projects have been calculated based on the following metal prices and
lower cut-off criteria:
----------------------------------------------------------------------
Mineral Gold Silver Copper Zinc Lead
Property US$/oz US$/oz US$/lb US$/lb US$/lb Lower cut-off
----------------------------------------------------------------------
Mesquite $1,000 - - - - 0.11 g/t Au -
Oxide resources
0.22 g/t Au -
Non-oxide
resources
----------------------------------------------------------------------
Cerro San
Pedro $1,000 $18.00 - $1.00 $0.75 0.1 g/t AuEq -
Open pit oxide
resources
0.4 g/t AuEq -
Open pit
sulphide
resources
2.5 g/t AuEq -
Underground
manto sulphide
resources
----------------------------------------------------------------------
Peak Mines $900 $15.00 $2.25 $0.85 $0.65 AU$90 - 100/t NSR
----------------------------------------------------------------------
New Afton $1,000 $18.00 $2.75 - - 0.4% CuEq - All
resources
----------------------------------------------------------------------
El Morro
----------------------------------------------------------------------
Meas'd &
Ind $950 - $2.00 - - 0.40 g/t Au
----------------------------------------------------------------------
Inferred $1,100 - $2.50 - - 0.33 g/t Au
----------------------------------------------------------------------
Mineral resources have been estimated and reported in accordance with
the standards of the Canadian Institute of Mining, Metallurgy and
Petroleum and National Instrument 43-101, or the AusIMM JORC
equivalent.
-------------------------------------------------------------------------
3) Cerro San Pedro mineral resources include measured, indicated and
inferred resources that are contained within a "Mineral Resource Pit"
and reported at lower cut-offs of 0.1 g/t AuEq for oxide
mineralization and 0.4 g/t AuEq for sulphide mineralization based on
the mineral resource metal prices noted above. Inferred manto sulphide
mineral resources represent mineralization that is potentially
mineable via underground mining methods and delimited by a 2.5 g/t
AuEq grade shell based on the mineral resource metal prices noted
above.
-------------------------------------------------------------------------
Qualified Persons
-----------------
The following table sets out the individuals who are the Qualified
Persons as defined by Canadian National Instrument 43-101 in
connection with New Gold's Mineral Reserve and Mineral Resource
Statements as of December 31, 2010.
Mark Petersen, Vice President, Exploration, New Gold Inc., who is a
"qualified person" as such term is defined under National Instrument
43-101, has reviewed and approved the contents of this news
release.
-------------------------------------------------------------------------
Mineral Property Qualified Person
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Mesquite
Reserves Mr. Hubert Schimann, P.Eng. and Corporate Mining
Engineer for New Gold Inc.
Resources Mr. Rex Berthelsen, FAusIMM, CPGeo and Principal
Geologist for New Gold Inc.
Cerro San Pedro
Reserves Mr. Hubert Schimann, P.Eng. and Corporate Mining
Engineer for New Gold Inc.
Resources Mr. Rex Berthelsen, FAusIMM, CPGeo and Principal
Geologist for New Gold Inc.
Peak Mines
Reserves Mr. Sean Pearce, AusIMM Manager Mining for Peak Gold
Mines Pty. Ltd.
Resources Mr. Manfred Wimberger, MAusIMM, and Geology
Superintendent for Peak Gold Mines Pty. Ltd.
New Afton
Reserves Mr. Dennis Bergen, P.Eng. and Associate Principal
Mining Engineer for Scott Wilson Roscoe Postle
Associates Inc.
Resources Mr. David Rennie, P. Eng. and Principal Geologist for
Scott Wilson Roscoe Postle Associates Inc.
El Morro
Reserves Ms. Maryse Belanger, P. Geo., Ms. Sophie Bergeron,
Ing. Goldcorp Inc.
Resources Ms. Maryse Belanger, P. Geo., Ms. Sophie Bergeron,
Ing. Goldcorp Inc.
-------------------------------------------------------------------------
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About New Gold Inc.
New Gold is an intermediate gold mining company. The Mesquite Mine in the
United States, the Cerro San Pedro Mine in Mexico and Peak Gold Mines in
Australia are expected to produce between 380,000 and 400,000 ounces of
gold in 2011. The fully-funded New Afton project in Canada is scheduled
to add further growth in 2012. In addition, New Gold owns 30% of the
world-class El Morro project located in Chile. For further information on
the company, please visit www.newgold.com.
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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, 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, 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 the 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., which transaction and third party claim were announced by New Gold in January 2010; 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 "Risk Factors" included in New Gold's latest annual information form, management's discussion and analysis of financial condition ("MD&A") and management information circular filed on and 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.
Cautionary Note to U.S. Readers Concerning Estimates of Measured, Indicated and Inferred Mineral 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.
SOURCE New Gold Inc.
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