With gold prices on the rise, the company could be worth a second look for investors seeking an exploration-stage gold mining stock with near-term commercialization prospects as a higher potential alternative to more established players like Yamana Gold Inc. (NYSE: AUY) and Goldcorp Inc. (NYSE: GG) that are already trading at lofty valuations.

Chandalar Property Looks Promising

The Chandalar property encompasses approximately 22,858 acres along a regionally mineralized schist belt that extends east-west across the 600-mile width of Alaska and south flank of the Brooks Range. With geology and mineralization similar to many important productive gold deposits, Goldrich Mining believes the property has enormous potential for development.

The company has already produced over 2,000 ounces of gold in 2009 and 2010 and completed a Phase I drilling program in November of 2011. The 25-hole program showed gold-bearing intercepts in 72% of the holes, with many having multiple intercepts. These included 6.57 g/t on the Aurora prospect and 6.02 g/t on the Rock Glacier prospect.

Goldrich had originally planned on continuing its exploration efforts during 2012, but wasn’t able to proceed due to poor market financing conditions. With principal exploration targeting a newly identified hard-rock stratabound gold target, the company estimates that the total cost for the program would come in at around $1.5 million to $2 million.

The property also includes substantial exploration infrastructure, including a 25-person camp, equipment, 4,400-foot airstrip and a network of road providing all-weather access to all of the major gold prospects. Combined, these features make it easy for the company to explore the property efficiently without a significant capital investment.

On the Verge of Production

In May of 2012, the company signed an agreement with NyacAU LLC, a large private Alaskan placer-mining company, to bring its Chandalar placer gold properties into production. The agreement provides the company with $8.5 million in financing to bring the alluvial deposit in Little Squaw Creek into production and partially finance the drilling activities of its exploration program.

Full production is expected to begin by June 2013 with an initial goal of 8,500 ounces of fine gold in the first year and approximately 10,000 ounces per season thereafter with a 25-year mine life. But, this figure could substantially increase with a second gold recovery plant running by 2014. The mine will pay itself off and generate about $1 million in cash for the company in the first year. Beginning in the second year, the company estimates it will generate about $4 million to $4.5 million in cash per year with their 50% stake per plant.

A Great Investment Opportunity

Goldrich Mining Company (OTCBB: GRMC) trades with a market capitalization of just $8.7 million, despite being very close to opening a mine capable of profitably generating $4 million to $4.5 million per year in revenues. Meanwhile, the 250,000 ounces could be recovered more quickly with a second plant that could increase this amount.

Finally, the fact that NyacAU – an established miner in Alaska – was willing to put up $8.5 million – nearly GRMC’s entire market capitalization – for a 50% interest in just the placer properties represents a strong vote of confidence in the stock. As a result, this is one company that investors may want to consider buying into sooner than later to capitalize on its discount.

For more information, please see the following resources:

• Company Website
• Recent SEC Filings

Where the next support level will be established if a new all-time high is hit is surely a question, but overall the outlook for the foreseeable future is very optimistic for mineral explorers as gold trudges higher and inflation is kept under control.  The news should revitalize the mining sector from majors like Barrick Gold Corp. (TSX:ABX, NYSE:ABX) to mid-tier gold producers such as New Gold Inc. (AMEX:NGD) to developmental miners with a large upside like Northern Vertex Mining Corp. (TSX-Venture:NEE, PINK:NHVCF).

Barrick is an easy choice for many portfolios as the company is the world’s largest gold producer with more than 25 operating mines and numerous exploration projects ongoing worldwide.  New Gold has been on a massive climb, rising from 74 cent lows in late 2008 to current levels above $9 per share, but still could perk higher with its cash flow positive operations in the United States, Mexico and Australia.  For those with a greater risk appetite, Northern Vertex Mining has plenty to offer with its aggressive growth efforts and the possibility of production in the near term.

The British Columbia-based company has projects in the United States in Arizona and Idaho, as well as an early exploration project in BC (the Copley Project).  Northern Vertex is employing a business strategy of acquisition of properties with historic reserves that it can quickly convert into National Instrument 43-101 compliant projects to move towards production.  By acquiring properties with historic gold at a rate of less than $20 per ounce and converting them to NI 43-101 compliant resources, the company can catapult values as high as $120 per ounce for the resources.

In the last 12 months, the company has completed the acquisition of its two U.S. properties, the Moss Gold-Silver Project in Arizona and the Lemhi Gold-Silver Project in Idaho.  The Moss Property was acquired in March 2011 and has already completed a 27,000-foot drill program, which has resulted in the delineation of a substantial NI 43-101 compliant gold-silver resource.  The property has been shown to host nearly 600,000 ounces of gold and Northern is still conducting more drilling on the “Western Extension” to prove-up more reserves.

Northern Vertex’s Lemhi Project was recently assembled from four underlying property holders to form a newly consolidated advanced exploration opportunity. The Lemhi Property includes Yamana Gold’s (TSX:YRI, NYSE:AUY) interest in the Humbug Gold Deposit and has a historical non-compliant 43-101 resource of 32.36 million short tons at a grade of 0.0375 ounces per short ton for 1.21 million contained ounces of gold.  The company plans to mirror its aggressive Moss Project drilling program at Lemhi with confirmation drilling already underway.

What’s particularly impressive is the manner in which Northern Vertex is expeditiously acquiring and developing its projects while stockpiling cash at the same time.  The company has the right to earn a 70% interest in the Moss Property from Patriot Gold Corp. through a $500,000 payment (which has already been made) and $8 million in exploration (of which nearly $4 million is already done in 9 months).  The property still has a fund with nearly $4 million in it for further exploration.  The Lemhi Property, which offers the company the right to earn up to a 75.5% interest, has a fund with nearly $8 million in it for exploration.  Cash and dilution threats are not an issue for Northern to continue advancing the projects towards production.

The bottom line is that there are a plethora of junior miners in North America and solid companies can often slink by unnoticed amongst the crowds.  Such seems to be the case with Northern Vertex.  With only 45 million shares outstanding (54 million fully-diluted), the company is well managed with proven talent which includes: David Farrell ($26B in M&A with Endevour Financial), James McDonald (Director/Technical Committee of $2.3B Alamos Gold), Ken Berry (Chairman of Kootenay Silver) and Joe Bardswich (Operating Manager of Drumlummon Gold Mine). Northern Vertex (NEE-TSX.V) is in possession of metal-bearing properties that could move the company from a developmental outfit into a mid-tier producer as gold prices continue to escalate over the next couple years.

For more information please view the following resources:

Company Website

Recent SEDAR Filings

British Columbia, Canada-based NioGold is an especially interesting developmental company in that its chart paralleled many of its big board peers with a deep drop at the end of 2008, followed by a sharp rise in 2009.  Many junior explorers never regained the losses from 2008 as interest in many small caps softened and a great many haven’t held the gains if they were recovered.  In fact, a look at a three-year comparative chart of NioGold, Barrick and Goldcorp shows that NioGold has actually outstripped the majors by providing a 184.62% return as compared to Barrick’s 12.10% and Goldcorp’s 17.94% returns.

The chart also tells savvy traders to keep a close eye on NioGold as it historically pulls strong support around the 150% gain mark, which translates to a share value of 30 cents as shown below.  The second chart also shows that there is more static support at 35 cents as well as the long-term trend line further validating the support point.

That is, of course, the technical component of why NioGold appears to be presenting a value proposition at this time.  Fundamentally speaking, the company is very sound with a portfolio that not only positions them for strong growth, but undeniably aligns them as a potential acquisition target.  Sure, plenty of junior miners can be called targets, but a more succinct look at NioGold reflects why this is particularly true for them.

NioGold’s portfolio contains:  Marban Block (100% interest), Malartic Hygrade (100%), Malartic H (60%), Val-d’Or (100%), Héva (100%), Siscoe East (50:50 JV) properties and the newly-acquired Camflo West (85 % interest) property via the acquisition from Republic Goldfields Inc.  The Camflo West property consolidates the Malartic Hygrade property and encompasses past producing mines as well as the depth extent of Barrick’s former Camflo Mine which produced 1.7 million ounces of gold from 1965 to 1992.

All of these extensive land holdings (125 km² in total) are in Northern Quebec’s most prominent gold mining region in the Abitibi Gold Belt adjacent to six (yes, six) producing gold mines that have 15 million ounces in gold reserves.  The adjoining Cadillac, Malartic and Val-d’Or camps have produced over 45 million ounces of gold since the 1930′s. Their Marban Block project holds NI 43-101 compliant (as of Jan 2010) indicated resources of 600,000 ounces gold in addition to inferred resources of 360,000 ounces gold.  NioGold’s aggressive drilling program is further adding to those resources which could push the property in excess of 1.5 million ounces Inferred and Indicated in the short-term.  The gold resources are defined along a three-kilometer segment of a regional gold mineralized fault zone, in and around the former Marban, Norlartic and Kierens gold mines, which collectively produced 600,000 ounces gold.

The Marban Block is currently being explored by Aurizon Mines Ltd. (TSX: ARZ, AMEX: AZK) through an option agreement with NioGold.  Aurizon is putting $20 million into exploration (about $11 million already spent) and will have to make a decision on buying a 50% interest in the property based upon the total Indicated and Inferred resources when the exploration criteria is met.  Even if they don’t add a single ounce to NioGold’s initial estimates (assays already have proved additional gold), the buy-in would add more than $17 million to NioGold’s bank account at current gold prices.  That’s just for 50% of the reserves on one on NioGold’s properties – and common sense says that the dollar figure should be much higher when the next NI 43-101 report is released.

Marban is prolific it seems, but only represents about 15 percent of the NioGold holdings which could draw substantial interest from other miners in the area.  As noted, Barrick already produced at Camflo.  Osisko Mining Corp. (TSX: OSK, OTCQX: OSKFF) just opened a mine literally across the street that contains 12.5 million ounces of gold.  It’s difficult to dismiss potential opportunities with billion dollar companies with familiarity to the land.

All of this from a company that has $6 million in cash on hand and a market cap of $36 million.  If valuation is any reflection of future potential, then NioGold’s is a good old-fashioned head-scratcher as it seems stunningly low.  As reserves are continually proved-up, it would be presumable that investors will be dialing in their sights on this junior with so many lucrative possibilities.

Please view the company’s website for more information.

These companies are furnishing to Hondo samples for testing and evaluation using Hondo’s technology due to the recent proven successes experienced from the extractions of gold and silver done at the Tennessee Mine.   Agreements have been executed for Hondo to begin testing on the companies mining material.   The intent of Hondo and all interested companies is to joint venture or license the E-Leach technology to extract precious and base metals.   The need for extraction is not just gold, silver or platinates but also copper and other highly commercial base metals.  Hondo intends to supply a full suite of E-Leach based technology solutions to potential partners, and generate revenue through licensing fees, royalties or joint venture arrangements from our industry partners.

The Initial executed agreements represent the first success in the company’s expanded business model, which contemplates supplying its proprietary extraction technology to mine operators under joint ventures or licensing arrangements.  To date, E-Leach has only been used at Hondo’s flagship property, the Old Tennessee Mine in Chloride, Arizona.

Bill Miertschin, Chairman and CEO of Hondo commented, “These opportunities mark the first time that Hondo’s exclusive E-leach technology may be used by other mine operators.  While we remain focused on our project in Chloride, the opportunity to diversify our revenue stream by using E-leach on other mining projects is another step in our growth as a company.”

About Hondo Minerals
Hondo Minerals Corporation is engaged in the acquisition of mines, mining claims and mining real estate in the United States,Canada and Mexico with mineral reserves of precious metals or non-ferrous metals.  Hondo owns the Tennessee and Schuylkill Mines in Chloride, Arizona. The Tennessee Mine was at one time the largest producing silver mine in Arizona history. The Tennessee Mine operated from the late 1800s until 1947 producing lead, zinc, gold and silver. The Company also owns numerous other mining claims in the US Southwest, which are being evaluated for additional reserves.

Cautionary Note Regarding Forward-Looking Statements
The company’s presentation will contain forward-looking statements that involve risks and uncertainties, including the Company’s beliefs about its business prospects and future results of operations. Some factors that could cause actual results to differ materially include economic and operational risks, changes in anticipated earnings, continuation of current contracts, and other factors detailed in the Company’s filings with the Securities and Exchange Commission, including its most recent Forms 10-KSB and 10-QSB. The Company forecasts provided are dynamic and therefore refer only to this release date. The Company does not undertake to update any forecasts that it may make available to the investing public.

SOURCE Hondo Minerals Corporation

Interested shareholders, analysts, investors and media are invited to join the live conference call by dialing in just prior to the start time.

 

Dial in number (Toll Free): 1-877-407-8033
Dial in number (International): +1-201-689-8033
No passcode is required

Replay number (Toll Free): 1-877-660-6853
Replay number (International): +1-201-612-7415
Replay Passcodes (both are required for playback):
Account #: 286
Conference ID #: 389736

A replay of the teleconference call will be available on March 13, 2012 from 10:00 AM Pacific Standard Time, 1:00 PM Eastern Standard Time until March 29, 2012 by dialing the numbers above. In addition, the call will be archived on the Company’s website.

ABOUT GREAT PANTHER

Great Panther Silver Limited is a profitable, primary silver mining and exploration company listed on the Toronto Stock Exchange, trading under the symbol GPR and on the NYSE Amex, trading under the symbol GPL. The Company’s current activities are focused on the mining of precious metals from its two wholly-owned operating mines in Mexico. In addition, the Company is also pursuing acquisition opportunities throughout Latin America to add additional mines to its portfolio of properties. Great Panther’s mission is to become a leading primary silver producer by acquiring, developing and profitably mining precious metals.

ON BEHALF OF THE BOARD

Robert A. Archer, President & CEO

This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) (together, “forward-looking statements”). Such forward-looking statements may include but are not limited to the Company’s plans for production at its Guanajuato and Topia Mines in Mexico, exploring its other properties in Mexico, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company’s operations in a foreign jurisdiction, uncertainty of production and cost estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of silver, gold and base metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company’s Annual Report on Form 20-F for the year ended December 31, 2010 and reports on Form 6-K filed with the Securities and Exchange Commission and available at www.sec.gov and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.

A total of 3,606m of reconnaissance reverse circulation drilling was completed in 14 holes testing 4 widely separated areas of geochemical and geophysical anomalies in the largely post-mineral gravel-covered property. Highlights of the drilling include multiple broad zones of anomalous silver and gold mineralisation cut by one of the holes, IRN-PS-RC012, at Cerritos Norte, which appears to have hit the silver-enriched halo to a possible El Peñon type vein system:

• 26m @ 8.5 g/t Ag (from 192m to 218m)
• Including 12m @ 14.8 g/t Ag (from 198m to 210m)
• 56m @ 2.1 g/t Ag (from 222m to 278m)
• 46m @ 6.6 g/t Ag + 0.09 g/t Au (from 304m to 350m)
• Including 2m @ 53.3 g/t Ag + 1 g/t Au (from 310m to 312m)

Along trend and approximately 4km to the south-southeast, significant intercepts were also returned from four drill holes at Cerritos Sur with hole IRN-PS-RC009 in particular returning potentially significant widths and grades:

Please refer to the Iron Creek website (http://www.ironcreekcapital.com/s/Home.asp) for locations of drill holes for the Pampa Sur targets. All intercepts quoted in this news release are related to the actual length down each hole, and are not necessarily true widths as the orientations of the anomalous zones cut are not yet known.

Tim Beale, President of Iron Creek, commented, “The results from the single hole at Cerritos Norte, and the four holes from Cerritos Sur are the first significant precious metals intercepts from this large property. They are highly significant and may indicate that we are in the immediate vicinity of one or more precious metals-enriched epithermal quartz veins. These drill holes may have cut the silver-enriched halos or margins of epithermal quartz veins similar, for example, to the nearby Cerro Martilloarea at Yamana’s El Peñon gold/silver mine.”

The Pampa Sur project covers approximately 11,300 hectares and more than 15km of continuous strike length of the prospective Dominador Fault Zone (DFZ) in the Palaeocene-Eocene volcanic belt, host to important precious metals and copper deposits in northern Chile. It is immediately south of, and contiguous with Iron Creek’s Pampa Buenos Aires project that is being explored in joint venture with Andina Minerals Inc. (TSX-V: ADM – “Andina”). It also lies approximately 40km south-southwest of Yamana’s El Peñon and Fortuna deposits (+7 million oz gold and +200 million oz silver). The property is located immediately adjacent to the Pan American highway with easy access.

Iron Creek now plans to carry out more surface sampling and profiling (geochemistry and geophysics) over more detailed grids covering the most prospective portions of the property, with the aim of better defining the best drill targets.

Pampa Sur Drilling Program

The reconnaissance drilling program at Pampa Sur targeted a series of geochemical anomalies in soils, colluvium and epithermal quartz vein float, together with CSAMT geophysical resistivity anomalies. The objective was to find silicified structures and/or alteration zones related to possible precious metals veins at depth. Surface geochemical sampling and geophysical profiling to date has mostly been widely spaced and results have been reported previously.

Three of the target areas chosen, now known as “Cerritos Norte”, “Acarreos Norte” and “Acarreos Sur”, occur in areas of thin to moderate thicknesses of soil, colluvial or gravel cover that obscures the underlying bedrock. The fourth area, known as “Cerritos Sur”, is a modest topographic feature rising out of the gravel-covered pampa that displays several chalcedonic quartz veinlet trends hosted within andesitic volcanic rocks, with anomalous silver from surface sampling.

At Cerritos Norte, one drill hole (IRN-PS-RC012) targeted a distinct CSAMT resistivity anomaly associated with a broad, northwest – southeast trending colluvial geochemical anomaly of arsenic and antimony defined by widely spaced sample lines (1km N-S x 25m E-W). The area is characterized by post-mineral colluvium and gravel cover that obscures the underlying bedrock, but occurs immediately west of, and on the margins of, a small hill where a dacite dome sub-crops. Dacites and rhyolites are considered to be the best potential host rocks for the epithermal quartz veins sought, as they are relatively competent and brittle rocks, allowing for the development of through-going structures. The drill hole was collared to test the best geophysical anomaly and was not centred on the highest geochemical anomaly.

The anomalous precious metals values from hole IRN-PS-RC012 are associated with a zone of quartz veinlets and silicification, which may be the source of the targeted CSAMT resistivity anomaly. The long intervals of silver and minor gold grades cut by the drill hole at Cerritos Norte are associated with a broad, but low tenor antimony and arsenic anomaly, which may be contributing to the surface colluvial geochemical anomaly.

At Cerritos Sur, significant silver and gold anomalies were found over short lengths in three of the four drill holes located here (IRN-PS-RC008, 010 and 011), while a significantly broader high grade intercept was returned from hole IRN-PS-RC009. These intercepts are related to chalcedonic veins and veinlets hosted within andesitic rocks. Cerritos Sur lies approximately 4km south-southeast of Cerritos Norte, along the same broad colluvial geochemical anomaly of arsenic and antimony. However, no geophysical profiling was carried out at Cerritos Sur, so no geophysical anomalies could be targeted. The drill intercepts at Cerritos Sur are also generally associated with elevated values of one or more of copper, lead, zinc, arsenic and antimony, likely giving rise to the surface colluvial geochemical anomaly.

At Acarreos Norte and Acarreos Sur, widespread chalcedonic quartz vein float trains on the surface of the colluvial and gravel-covered pampa are associated with a broad, somewhat irregular north-south trending colluvial geochemical anomaly of arsenic and antimony.

An east-west fence of five holes at Acarreos Norte along a CSAMT geophysical profile line (holes IRN-PS-RC001, 002, 003, 013 and 014) is located 2.5km north of an east-west fence of four holes at Acarreos Sur, also located along a CSAMT geophysical profile line (holes IRN-PS-RC004, 005, 006 and 007). All the drill holes targeted CSAMT resistivity anomalies along these geochemical and quartz vein float trends, and are not necessarily located on the best geochemical anomalies. Neither fence of holes intersected quartz vein material in the sub-surface or significant silver or gold values. A number of rhyolite or dacite bodies were intersected that may be the sources of the CSAMT anomalies targeted.

Although no quartz veins or significant silver or gold values were cut by the drilling at Acarreos Norte and Acarreos Sur, the abundant and widespread quartz vein float material at surface, much of it anomalous in precious metals and arsenic and antimony, must be sourced from somewhere close by. This will be followed up by more detailed surface sampling of both colluvial material and float material, bearing in mind that the colluvial sampling grid completed to date has sample spacings of 25m along lines spaced 1km apart. The target area is very large. It is perhaps significant that several manganese anomalies to 100s ppm (+/- 1,000ppm), arsenic anomalies to 100s of ppm and antimony anomalies to 10s of ppm were intersected in several of the drill holes at Acarreos Norte and Acarreos Sur, which may indicate proximity to mineralized veins.

QA/QC

Geochemical samples are collected in accordance with accepted industry standards and best practices. Samples are submitted to ALS Chemex Laboratories in La Serena, Chile, for preparation by PREP31B (1,000gr), with digestion by aqua regia and analysis for 35 elements by ICP-AES (ME-ICP61). Gold is analysed by 50gm fire assay (Au-AA24). As standard procedure, Iron Creek conducts routine quality-assurance and quality-control analysis on all assay results, including the systematic utilization of certified reference materials, blanks and field duplicates.

Qualified Person

Demetrius Pohl, Certified Professional Geoscientist (CPG), is the Company’s Qualified Person as defined by National Instrument 43-101, and is responsible for the accuracy of the technical information in this news release.

ON BEHALF OF THE BOARD

    “Timothy J. Beale”
Timothy Beale, President

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statement 
Some of the statements in this news release contain forward-looking information that involves inherent risk and uncertainty affecting the business of Iron Creek Capital Corp.  Actual results may differ materially from those currently anticipated in such statement.

SOURCE Iron Creek Capital Corp.

Well-Funded with Promising Properties

XMET is a rare well-funded mineral exploration company. During the quarter ended September 31, 2011, XMET reported current assets of nearly $5 million, including over $2 million in cash, compared to less than $120,000 in total liabilities. Unlike many early stage mineral exploration companies, the company appears to manage its financing and dilution very prudently.

The company also has very promising properties in its portfolio and has been quickly and efficiently adding ounces. After going public in June of 2010, the firm published a NI 43-101 report in September showing 525,000 ounces of gold resources and in November of 2011 Xmet updated its NI 43-101 resource calculation to 853,000 ounces of gold. The company has nearly completed its 13,000 metre Phase 2 drill program which is aimed at bringing the resource beyond the million ounce mark including a minimum of 100,000 indicated ounces. Xmet expects the Phase 2 drill campaign to be completed in early spring of 2012 and plans on working on some metallurgy studies to assist the project moving forward towards production. After this work is complete, the firm plans to finalize its preliminary economic analysis that could open the door to both a higher valuation and a potential takeover by larger players in the industry.

Undervalued Potential Takeover Target

Currently, XMET is trading near its 52-week low with a valuation of less than $6 per ounce of gold in its potential reserves. This compares to other industry players that are trading anywhere between $20 and $50 per ounce. And the company’s diligent management, prudent financing, and efficient drilling should certainly command a premium in the market.

The company’s Phase 1 drilling program added 25 ounces of gold per meter drilled with costs that averaged less than $100 per meter. These are some of the lowest costs in the country and resulted in discovery costs averaging less than $4.00 per ounce of gold. Management also has ample “skin in the game” with an ownership stake greater than 20%.

Ultimately, all of these factors help make the company a strong takeover target, particularly when its preliminary economic analysis is completed in six months or so.

A Great Investment Opportunity

XMET Inc. (OTCQX: XMTTF, TSX-V:XME), is a mineral exploration company with strong potential upside given its diverse set of properties, significant undervaluation and many near-term catalysts. These factors combine to make it a potential takeover target over the coming year, which makes it definitively worth a look for investors.

For more information, please see the following resources:

• Company Website
• Company Presentation
• Company Filings

The following summarizes the production results and highlights for Q4, 2011:

 

--  Metal production of 545,294 Ag eq oz, up 13% from previous quarter

--  Silver production of 354,754 ounces ("Ag oz"), up 3% from previous
    quarter

--  Gold production of 2,281 ounces ("Au oz"), up 53% from previous quarter

--  Ore grades improved at Guanajuato, to 235g/t Ag and 2.12g/t Au, in
    November and December, the highest since September, 2010

--  Deep Cata development yielded 6,300 tonnes at 482g/t Ag and 1.83g/t Au

--  Santa Margarita drilling, stoping on 400 metre level and new 455 metre
    level development confirms ore continuity with gold values ranging from
    7.5g/t to 9.0g/t

--  Guanajuatito drilling extends new resource area for 400 metres down dip
    to the 390 metre level

--  Concentrate backlog at Guanajuato all sold

--  New General Manager for Guanajuato appointed

--  Record mining and plant throughput at Topia of 12,056 tonnes, up 33%
    from Q4, 2010

Ore processed in Q4, at 52,170 tonnes, is up 8% compared to Q4, 2010 and, for the year, at 216,180 tonnes, is up by 19%. Metal production for Q4, at 545,294 Ag eq oz, improved by 13% over the third quarter, 2011, but was down by 4% compared to Q4, 2010. Metals produced include 354,754 Ag oz, 2,281 Au oz, 467,000 pounds lead (“Pb lbs”), and 721,500 pounds zinc (“Zn lbs”).

As anticipated, Guanajuato ore grades, at 207g/t Ag and 1.84g/t Au improved significantly compared to the previous quarter (175g/t Ag and 1.12g/t Au). Development of the Deep Cata ore zones at the 510 metre level commenced towards the end of October and the average grades of all ore processed at Guanajuato in November and December jumped to 235g/t Ag and 2.12g/t Au. To date, development has commenced on six separate high grade veins/structures and ore processed from this development contributed approximately 29% of the total metal production from Guanajuato. As development advances further and stoping commences, metal production from this area will continue to increase, supporting the improved production guidance of 2.50 to 2.75 million Ag eq oz for 2012.

For the year, the combined metal production for both operations was 2.2 million Ag eq oz. The metals produced include 1,495,371 Ag oz (a decrease of 3%, year on year), a record 8,015 Au oz (an increase of 11%, year on year), 2,073,600 Pb lbs (a decrease of 14%, year on year), and 2,898,750 Zn lbs (a decrease of 3%, year on year).

The Company has sold all available concentrate inventories from Guanajuato and is well advanced in securing new contracts for fiscal 2012 concentrate sales for both the Guanajuato and Topia Mines. This will ensure strong fourth quarter revenues which will balance out the previous revenue shortfall in the second quarter.

The following summarizes the results and highlights for Fiscal 2011 (compared to 2010):

 

--  Achieved revised metal production target of 2.2 million Ag eq oz (down
    2%)

--  Silver production of 1,495,371 oz (down 3%)

--  Record gold production of 8,015 oz (up 11%)

--  Record silver production at Topia of 535,881 oz (up 4%)

--  Record gold production at Guanajuato of 7,515 oz (up 14%)

--  Record metallurgical recoveries at Guanajuato of 88.5% for Ag and 90.7%
    for Au (up 1% and 2%, respectively)

--  Mining and plant throughput at Guanajuato of 169,213 tonnes (up 17%,
    year on year)

--  Record mining and plant throughput at Topia of 46,967 tonnes (up 23%,
    year on year)

--  San Ignacio Project diamond drilling (17,313 metres) indicates multiple
    veins with widths up to nine metres

--  Initial NI43-101 compliant Mineral Resource published for San Ignacio of
    4.5 million Ag eq oz (611,000 tonnes grading 127g/t Ag and 2.05g/t Au)

(For consistency, silver equivalents for 2011 were established and maintained using budget prices of US$1,200/oz Au, US$20/oz Ag, US$0.90/lb Pb and Zn.)

Guanajuato Mine Complex

For the quarter, the Guanajuato operation processed 40,114 tonnes, up 3% from Q4, 2010, at ore grades of 207g/t Ag and 1.84g/t Au. This is a significant improvement from the previous quarter and within 2% of the combined ore grades for Q4, 2010. Metal production included 237,572 Ag oz and 2,145 Au oz, or 366,286 Ag eq oz, which was up 28% from the previous quarter and down just 1% from Q4, 2010. Plant metallurgical performance remained strong, with metal recoveries of 89.1% for silver and 90.3% for gold.

For the year, 169,212 tonnes were processed at ore grades of 199g/t Ag and 1.52g/t Au. Metals produced totaled 959,490 Ag oz (down 6% from 2010), plus 7,515 Au oz (up 14% from 2010 and a record), or 1,410,404 Ag eq oz (down 2% from 2010). The significant improvement in ore grades for the quarter resulted from the initiation of development of the high-grade Deep Cata area and from improved gold production from the Santa Margarita vein. Plant metallurgical performance was excellent with record recoveries of 88.5% for Ag and 90.3% for Au compared to 88.5% and 88.6%, respectively in 2010.

A new General Manager, Mr. Graham Parsons, MBA, was appointed in October for the Guanajuato Operations. Mr. Parsons is fluent in Spanish, having worked in underground operations and open pit projects in Spain, Argentina and Venezuela. He brings a wealth of international mine engineering and operations management experience to Great Panther. Most recently, he held the position of COO for Empire Mining Corporation, a junior exploration and mining company with interests in South-Eastern Europe. Several opportunities exist to improve production output at Guanajuato and Mr. Parsons is already adding his mining expertise and management skills necessary to influence positive change.

Development of Deep Cata, at the 510 metre level, exposed six, discreet, high-grade veins/zones: Veta Madre, Contact, Alto 1, Alto 1a, Alto 2, and Alto 2a. The geology of this area is complex and required additional, closely spaced diamond drilling in order to facilitate the interpretation and 3-D modelling of each separate vein. Ore mined from the development of these veins totaled 6,300 tonnes, at grades of 482g/t Ag and 1.83g/t Au, and contributed almost 30% of the total metal production. Development is continuing, leading to stoping in the first quarter 2012 and improved metal production throughout 2012.

Production from the gold-rich Santa Margarita vein also improved significantly. Stoping at the 400 metre level accounted for 3,300 tonnes at grades of 8.93g/t Ag and 50g/t Ag while new exploratory development on the 455 metre level produced 845 tonnes at 7.47g/t Ag and 87g/t Ag. Access to the 475 metre level and the two additional, sub-parallel footwall veins (SMBo1 and 2) will be established in the first quarter. Further increases in gold production are expected from Santa Margarita throughout 2012.

Production from the lower grade, Los Pozos zone continued with modest grade improvements evident in two of the three production levels. Ore produced totaled almost 16,000 tonnes at grades of 183g/t Ag and 0.75g/t Au. Further improvements in ore quality are expected in the first quarter of 2012.

Production stoping of the Guanajuatito North Zone continued from the 120 metre level with ore production totaling 2,730 tonnes at improved grades of 196g/t Ag and 0.98g/t Au. Ramp access has been extended to the 160 metre level and initial stope development is underway.

The Guanajuato plant achieved very satisfactory silver and gold recoveries of 89.1% and 90.3%, respectively, while the concentrate quality improved to 10,910g/t Ag and 98.5g/t Au. Additional improvement modifications are being made to the plant and continuous improvement in metallurgical performance is expected in 2012.

The Company has sold all available concentrate inventories from Guanajuato and is well advanced in securing new contracts for fiscal 2012 concentrate sales. The sales of the backlog will ensure strong fourth quarter revenues which will balance out the previous revenue shortfall in the second quarter.

In addition, underground diamond drilling at Guanajuato totaled 5,544 metres, with 55 holes completed during the quarter. For the year, 169 holes were drilled for a total of 26,546 metres.

Drilling in the fourth quarter tested the potential of the:

 

1.  Los Pozos area - four holes completed for 789 metres,
2.  Valenciana area - five holes completed for 988 metres,
3.  Guanajuatito North Zone area - six holes completed for 1,562 metres,
4.  Santa Margarita area - 19 holes completed for 1,633 metres,
5.  Deep Cata area - 14 holes completed for 517 metres,
6.  Others - seven holes completed for 247 metres.

The Deep Cata short-hole drilling continued to help define the extensions to the six high grade veins between the 500 and 530 metre levels. Refer to Company news release dated August 30, 2011.

Deeper drilling at Guanajuatito has defined new mineralization over a strike length of approximately 100 metres and 300 metres vertically (approximately 400 metres down the dip). Drilling is being conducted from drill stations located at or near the 120 metre level in a hanging wall cross-cut ramp. Two mineralized zones are interpreted from the data – the Veta Madre zone, and a slightly deeper Footwall zone. Typically, the mineralized portion of the zones pinches and swells with true widths varying from less than one metre to 5.38 metres. Intersections of the Veta Madre include assays of 268g/t Ag and 0.91g/t Au over a true width of 3.36 metres in UGG11-045. Intersections of the Footwall zone include assays of 1,493g/t Ag and 13.28g/t Au over a true width of 5.38 metres in UGG11-029, and 866g/t Ag and 2.92g/t Au over a true width of 1.14 metres in UGG11-047.

Results from exploratory and ore definition drilling at Santa Margarita include intersections on the main structure of 44.76g/t gold and 46g/t silver over a true width of 1.14 metres in drill hole UGSM11-005. The SM footwall 1 (SMBo1) stockwork zone is located adjacent to or within four to eight metres below the Santa Margarita structure. Intersections on the SMBo1 zone include 17.15g/t Au and 36g/t Ag over a true width of 3.28 metres in UGSM11-003. The SM footwall 2 (SMBo2) stockwork zone is located about 20 metres below the Santa Margarita structure. Intersections on the SMBo2 zone include 6.04g/t Au and 7g/t Ag over a true width of 1.74 metres in UGSM11-007. Refer to Company news release dated November 30, 2011 for more details on Guanajuatito and Santa Margarita drilling.

Topia Mine

For the quarter, the Topia operation reported metal production of 117,182 Ag oz, 136 Au oz, 467,000 Pb lbs, and 721,500 Zn lbs from milling 12,056 tonnes of ore, up by 33% from Q4, 2010 and a quarterly processing record. This equates to 179,008 Ag eq oz, which is 8% down from Q4, 2010.

For the year, Topia reported metal production of 535,881 Ag oz (a record), 500 Au oz, 2,073,600 Pb lbs and 2,898,750 Zn lbs, from milling 46,968 tonnes of ore, up by 23% from 2010 and a record. In terms of silver equivalents, this equates to 789,609 Ag eq oz, 4% less than in 2010. The average grades of ore processed were 400g/t Ag, 0.41g/t Au, 2.13% Pb and 3.05% Zn and plant metallurgical performance, with metal recoveries of 88.7% for Ag; 80.1% for Au; 94% for Pb; and 91.7% for Zn, were satisfactory.

In Q4, metal production was down in spite of processing a quarterly record throughput due to lower ore grades of 345g/t Ag, 0.44g/t Au, 1.85% Pb and 2.97% Zn. In terms of Ag eq oz per tonne milled, the grades were 27% down against the grades for Q4, 2010.

Plant metallurgical performance was satisfactory, according to the lower ore quality. Silver recovery was 87.7%, gold recovery was 79.2%, lead recovery was 95.0% and zinc recovery was 91.3%. Lead concentrate grades of 52.83% Pb and 8,528g/t Ag were achieved while the zinc concentrate averaged 53.60% Zn and 619g/t Ag. In addition to processing the Company’s ore, 4,231 tonnes were custom milled for a local miner, thereby increasing revenue and keeping unit costs down. The crushing and flotation sections of the processing plant are being modified through the next two quarters to further improve capacity to approximately 300 tonnes per day, from 220 tonnes per day in 2011. The flotation circuit improvements are now complete and the crushing section modifications will be completed by end of the second quarter.

The lower overall ore grades have resulted from lower vein grades encountered in the San Gregorio, El Rosario and El Ochenta vein operations, which account for approximately 43% of Topia’s production. Recent vein sampling has indicated an improvement in ore quality and this, together with planned increases in production from the Argentina vein, is expected to lead to higher overall grades in the first quarter of 2012.

Exploratory development to access the veins at the 1,630 metre elevation (Mina 5) has proved successful but initially with lower quality ore. At the Durangueno mine, the San Gregorio vein is being mined at the 1,475 and 1,510 metre elevations. As there are currently limited Mineral Resources defined there and no previous exploitation between the 1,475 and 1,660 metre elevations, these developments will provide for additional production and add new Mineral Resources.

Exploratory development at the La Prieta mine is successful and 1-yard underground loaders are being acquired for the anticipated production mining. This is a past producing mine with modest Inferred Mineral Resources and large exploration potential. The expansion of production in this new mine will contribute to the overall increase in production expected in 2012.

At the Argentina mine, ramp development has been completed to the third level, providing access for exploratory development in a new area of Inferred Mineral Resources. Production mining from this level will also contribute to an increase in production for 2012.

A total of 669 metres of underground diamond drilling was completed in 22 diamond drill holes. Drilling was carried out to test for additional resources on many vein structures including Animas, Don Benito, Veta Madre, San Jorge, Cantarranas, Hormiguera, Argentina, Santa Cruz and Santa Bibiana.

For the year, 59 underground drill holes were completed for a total of 2,767 metres.

The surface drilling program continued with the completion of six diamond drill holes in the fourth quarter for a total of 1,152 metres. All six holes targeted veins at the La Prieta mine.

For the year, 10 surface drill holes were completed for a total of 1,759 metres.

San Ignacio Project

The San Ignacio Project covers approximately four kilometres of strike length on the La Luz vein system, which is parallel to, and five kilometres west of, the principal Veta Madre structure that hosts Great Panther Silver’s main Guanajuato mines.

An initial, NI 43-101 compliant, Mineral Resource estimate has been published (see Company news release of October 11, 2011). The estimate comprises Inferred Mineral Resources of 611,000 tonnes at 127g/t silver and 2.05g/t gold (4,494,000 Ag eq oz), using a 118g/t Ag eq cut-off grade. A Mineral Resource update is expected towards the end of Q2, 2012.

Diamond drilling has continued in Q4 with the completion of 26 holes for a total of 5,494 metres. For the year, 58 holes were completed for 17,313 metres over a strike length of only 450 metres.

An update on recent results was provided in Company news release of December 05, 2011. Highlights of the Intermediate Zone intercepts included 213g/t Ag and 5.12g/t Au over a true width of 3.26 metres, and 201g/t Ag and 6.34g/t Au over a true width of 4.96 metres in ESI11-039 (section 450N). These two intersections are separated by a void with a true width of approximately 0.7 metres that is possibly an old mine working from the 1800s implying a vein width of almost nine metres from which only a very narrow portion has been previously mined. On section 700N, drill-hole ESI11-048 intersected 296g/t Ag and 1.28g/t Au over a true width of 3.86 metres.

The Nombre de Dios vein intercepts demonstrate a thickening of the vein on section 600N, with an intersection of 106g/t Ag and 2.11g/t Au over a true width of 5.15 metres in ESI11-044 (section 600N). Drilling intercepts on the Melladito vein included 198g/t Ag and 2.26g/t Au over a true width of 3.69 metres in ESI11-048 (Section 700N).

Presently, and through to February 2012, the drill rig is completing fill-in holes to upgrade the mineral resource estimate, anticipated near the end of the second quarter of 2012. Drilling will be extended south of section 450N for approximately 800 metres, northwards of section 900N for approximately 300 metres, and to initially test a 600 metre strike portion on the southern San Antonio claim.

Outlook

Metal production from both Guanajuato and Topia in 2011, at 2.20 million Ag eq oz, was lower than initially expected, primarily as a result of lower ore grades encountered at both operations. As we enter 2012, there are a number of positive developments:

At Guanajuato:

 

1.  Ore mined and processed in 2011 increased by 17% to almost 170,000
    tonnes. The plan for 2012 includes a further increase of 18% to 200,000
    tonnes. The plant has ample capacity for over 300,000 tonnes.
2.  Ore grades have already improved in the latest two months, to 235 g/t Ag
    and 2.12g/t Au (25% higher than the average for 2011), since mining of
    the high grade Deep Cata and the deeper parts of the gold-rich Santa
    Margarita ore bodies was initiated. Further expansions of production
    from these areas are planned in 2012.

At Topia:

 

1.  Ore mined and processed in 2011 increased by 23% to almost 47,000 tonnes
    (plus 13,000 tonnes for custom milling). The plan for 2012 includes a
    further increase of 17% to 57,000 tonnes (plus 13,000 tonnes for custom
    milling). Improvement modifications have been made to accommodate in
    excess of 75,000 tonnes.
2.  Ore grades are expected to improve to the 400g/t Ag range in 2012.
    Recent vein sampling on the San Gregorio and El Rosario operations has
    indicated an improvement in ore quality and this, together with planned
    increases in production from the Argentina vein, will lead to the
    improved grades.
3.  Improvement modifications, including additional flotation cells, have
    been completed to facilitate the 2012 capacity increase with improved
    metallurgical performance. The capacity of the processing plant is being
    further increased over the next six months to approximately 300 tonnes
    per day (up from 220 tonnes per day in 2011).

Exploration & Development:

 

1.  San Ignacio: A NI 43-101 compliant initial Mineral Resource Estimate of
    4.5 million Ag eq oz was released after drilling 24 diamond core holes.
    Metres drilled have more than doubled to date and a resource update is
    expected by the end of Q2, 2012. The San Ignacio Project is expected to
    realize its potential during 2012 with an intensive exploration and mine
    development program being planned and will no doubt add to the growth
    potential for 2013.
2.  Santa Rosa: After a mechanical breakdown on the diamond drill at
    Valenciana delayed the start of the Santa Rosa program, it is now
    scheduled to begin in Q1, 2012.

The Company expects metal production growth of approximately 20% year on year from its two wholly owned Mexican silver operations. The Company estimates metal production in the range of 2.50 to 2.75 million silver equivalent ounces for fiscal 2012.

In terms of contained metals, the Company’s estimated ranges for 2012 are as follows:

 

--  Silver: 1.72 to 1.90 million ounces, up from 1.495 million ounces in
    2011
--  Gold: 10,000 to 11,000 ounces, up from 8,015 ounces in 2011
--  Lead: 2.50 to 2.80 million pounds, up from 2.07 million pounds in 2011
--  Zinc: 3.30 to 3.60 million pounds, up from 2.90 million pounds in 2011

(Silver equivalents for 2012 have been established using prices of US$1,680/oz Au; US$28/oz Ag; and US$0.85/lb for Pb and Zn).

Robert F. Brown, P.Eng., Vice President of Exploration for the Company is the Qualified Person for both the Guanajuato Mine Complex and the Topia Mine, under the meaning of NI 43-101. Aspects of both mines relating to mining and metallurgy are overseen by Charles Brown, Chief Operating Officer for Great Panther Silver and its Mexican subsidiary, Minera Mexicana El Rosario, S.A. de C.V.

ON BEHALF OF THE BOARD

Robert A. Archer, President & CEO

This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) (together, “forward-looking statements”). Such forward-looking statements may include but are not limited to the Company’s plans for production at its Guanajuato and Topia Mines in Mexico, exploring its other properties in Mexico, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company’s operations in a foreign jurisdiction, uncertainty of production and cost estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of silver, gold and base metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company’s Annual Report on Form 20-F for the year ended December 31, 2010 and reports on Form 6-K filed with the Securities and Exchange Commission and available at www.sec.gov and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.

VANCOUVER, Jan. 9, 2012 /PRNewswire/ – New Gold Inc. (“New Gold”) (TSX:NGD)(NYSE AMEX: NGD) today provides an update on the El Morro Project where the company is a 30 percent partner, with Goldcorp Inc. (“Goldcorp”), the project developer and operator, holding the remaining 70 percent. El Morro is an advanced stage, world-class copper/gold project in northern Chile, one of the most attractive mining jurisdictions in the world.

New Gold has been informed that Goldcorp’s Board of Directors has officially approved the decision to commence with construction of the El Morro Project, with the start of construction targeted for the end of the Chilean winter season in September 2012. In total, the development of El Morro is expected to take five years at a capital cost of $3.9 billion (100% basis). Under the terms of New Gold’s agreement with Goldcorp, Goldcorp is responsible for funding New Gold’s 30% share of capital costs, or approximately $1.2 billion. The carried funding will accrue interest at a fixed rate of 4.58%. New Gold will repay its share of capital plus accumulated interest out of 80% of its 30% share of the project’s cash flow with New Gold retaining 20% of its 30% share of cash flow from the time production commences.

“Our 30 percent interest in El Morro positions us very well as we have a meaningful share of this great project, with a proven mine developer and operator as a partner and a favourable financing arrangement that carries us through production,” statedRandall Oliphant, Executive Chairman.

Initial production from the mine is expected in 2017 with full production anticipated in 2018. Development activities during 2012 will focus on access road construction, engineering, equipment procurement and exploration. Drilling will be a combination of additional condemnation drilling for infrastructure locations and exploration drilling to test potential extensions of the La Fortuna deposit. La Fortuna, which hosts the current mineral resource, is one of the two principal zones of gold-copper mineralization that have been identified to date. The El Morro zone and several additional targets have also been identified which could become the focus of future exploration efforts. Current open pit proven and probable mineral reserves on a 100% basis total 537 million tonnes at 0.52% copper and 0.49 grams per tonne gold. New Gold’s 30% share of the reserves includes 1.8 billion pounds copper and 2.5 million ounces gold.

New Gold has recently received the data and analysis supporting Goldcorp’s update of the project’s 2008 feasibility study and has engaged Roscoe Postle Associates Inc. to complete a detailed review of the results on New Gold’s behalf. The results of Goldcorp’s updated study indicate that New Gold’s 30 percent share of annual production is expected to be over 90,000 ounces of gold and 85 million pounds of copper over an initial 17-year mine life. Life-of-mine cash costs are expected to be approximately ($700) per ounce of gold on a by-product basis and approximately $550 per ounce of gold and $1.45 per pound of copper on a co-product basis. Metals price assumptions used to calculate the average life-of-mine El Morro cash costs are$1,200 per ounce of gold and $2.75 per pound of copper.

The El Morro Project currently contemplates the mining and milling of sulphide copper and gold ore from the La Fortuna mineral deposit through a 90,000 tonne-per-day concentrator.   The plant design includes: a crushing plant, semi-autogenous grinding (SAG) circuit, rougher flotation and regrind circuit, and cleaner and scavenger flotation banks. Additional project-related infrastructure includes: a desalination plant, power plant and concentrate filtration plant. The construction of a new access route from the project to the Pan American highway is also contemplated with the route serving as the concentrate and water pipeline route, and the preferred location for the project power line. Water supply is planned to be sourced from a reverse-osmosis desalination plant that will produce 740 litres per second of agricultural-quality water, which will be conveyed to site along a 193 kilometre-long water pipeline.  Concentrate will be transferred via pipeline to a concentrate filter plant at the port site for overseas shipment.

About New Gold Inc.

New Gold is an intermediate gold mining company. The company has a portfolio of three producing assets and three significant development projects. The Mesquite Mine in the United States, the Cerro San Pedro Mine in Mexico and Peak Gold Mines inAustralia are expected to produce between 380,000 and 400,000 ounces of gold in 2011. The fully-funded New Afton project inCanada is scheduled to add further growth in 2012. In addition, New Gold owns 30% of the world-class El Morro project located in Chile and, in June 2011, New Gold acquired the exciting Blackwater project in Canada. 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 (including that the business of recent transactions will be integrated successfully in the New Gold organization) that are inherently subject to known and unknown risks, uncertainties and other factors that may cause 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 disclosure documents 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.

Technical Information

The El Morro Project reserves and resources were prepared by Ms. Maryse Belanger, P. Geo and Ms. Sophie Bergeron, Ing. both of Goldcorp, each a “Qualified Person” under NI 43-101.

The scientific and technical information in this news release has been reviewed by Mark Petersen, a Qualified Person under National Instrument 43-101 and employee of New Gold.

(1) TOTAL CASH COST
“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 inNorth 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-IFRS measure. Total cash cost presented do not have a standardized meaning prescribed by IFRS 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 IFRS and is not necessarily indicative of operating costs presented under IFRS.

SOURCE New Gold Inc.