VANCOUVER, June 1 /PRNewswire-FirstCall/ - New Gold Inc.
("New Gold") (TSX: NGD)(NYSE AMEX: NGD) and Richfield Ventures
Corp. ("Richfield") (TSXV: RVC) today announce that New Gold has
closed the acquisition of Richfield. In completing the acquisition,
New Gold has issued approximately 49 million New Gold shares to
former Richfield shareholders.
"We are delighted with the acquisition of Richfield's Blackwater
Project," stated Randall Oliphant,
Executive Chairman. "Blackwater fits perfectly into New Gold's
growth pipeline as it adds a multi-million ounce gold resource with
significant exploration potential to our portfolio of assets. We
look forward to drilling the property aggressively to increase its
already significant gold resource."
The Blackwater Project is located in central British Columbia, where New Gold already has
an established presence through the ongoing development of its New
Afton Project which remains on-budget and on-time for a mid-2012
production start. The initial mineral resource estimate for the
Blackwater Project was announced by Richfield on March 2, 2011 with New Gold's share of the
resource including 1.8 million ounces of indicated gold resources
and an additional 2.0 million ounces of inferred gold resources.
New Gold looks forward to building on this initial resource as the
deposit remains open in all directions and at depth. Drill results
released since the April 4, 2011
announcement of the proposed transaction between New Gold and
Richfield have shown strong continuity of mineralization on both
the southern and northern portions of the deposit. With four drills
currently active at site, a fifth drill is scheduled to arrive in
June and New Gold has commenced work to expand the project's
existing infrastructure to support as many as 10 drills by the end
of 2011.
Highlights - Blackwater Project
- A large gold asset in British Columbia where New Gold has significant
experience through the continued development of its New Afton Project
- Immediate 22% increase to New Gold's gold resources through
Blackwater's initial mineral resource estimate
- Significant exploration potential above and beyond current resource
base - deposit open in all directions and at depth
- Compliments New Gold's already robust growth pipeline with an
exciting gold asset
- Ability to fund exploration and development from internal cash flow
- Leverage off of teams that brought Cerro San Pedro and Mesquite open
pit mines into production as well as team developing New Afton in
British Columbia
- Potential to become New Gold's largest gold producing asset
- Tax synergies with New Afton
- Minimal shareholder dilution of approximately 10%
"We believe that with continued drilling, Blackwater could
become one of Canada's most
exciting gold development projects," stated Robert Gallagher, President and Chief Executive
Officer. "With the initial resource estimate resulting from only
25,000 metres of drilling we look forward to what our drill
programs in the remainder of 2011 and 2012 could yield."
Blackwater Resource Estimate
Blackwater Deposit - Resource Estimates by Property at 0.4 g/t
Au Cut-off grade
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Indicated Inferred
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Grade Grade
----------- Contained ----------- Contained
Tonnes Gold Silver Gold Tonnes Gold Silver Gold
Property (000's) (g/t) (g/t) (Moz) (000's) (g/t) (g/t) (Moz)
-------------------------------------------------------------------------
Total
Blackwater 53,460 1.06 5.6 1.83 75,452 0.96 4.0 2.34
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Dave and
Jarrit
(100% New
Gold) 53,128 1.07 5.6 1.82 29,183 1.04 5.5 0.98
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Davidson
(75% New
Gold, 25%
Silver
Quest
Resources
Ltd.) 331 0.92 5.0 0.01 46,269 0.92 3.1 1.36
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Total New
Gold 53,377 1.06 5.6 1.83 63,885 0.97 4.2 2.00
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New Gold looks forward to providing a further update on its
plans for the Blackwater Project in mid-June.
The TSX Venture Exchange will disseminate a notice announcing
the delisting of the Richfield shares. Richfield shareholders
should send in their completed and executed letters of transmittal
and Richfield share certificates to the depositary, Computershare
Investor Services Inc. as soon as possible in order to receive the
consideration to which they are entitled under the Arrangement. A
copy of the letter of transmittal is available on SEDAR at
www.sedar.com under the Richfield profile.
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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 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 and, in June 2011, New Gold acquired the exciting Blackwater
project in Canada. For further information on the company, please visit
www.newgold.com.
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Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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
Richfield 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 the case of Richfield, such risks include, among other risks,
the approvals of regulators, availability of funds, the results of
financing and exploration activities, the interpretation of
drilling results and geological data, project cost overruns or
unanticipated costs and expenses. 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 and Richfield's
continuous 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.
Cautionary Note to U.S. Readers Concerning Estimates of
Measured, Indicated and Inferred Mineral Resources
Information concerning the properties and operations discussed
herein 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 news 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 news 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.
Technical Information
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.
See Richfield's March 2, 2011 NI 43-101 Technical Report
available on SEDAR at www.sedar.com for detailed information
regarding the Blackwater Project resource estimate. The Blackwater
resource estimate contained in this document is effective as of
March 2, 2011 and was derived from
information prepared by or under the supervision of Mr.
Ronald Simpson, P. Geo, President of
Geosim Services Inc., an independent "qualified person" under
National Instrument 43-101 Standards of Disclosure for Mineral
Projects NI 43-101.
CONTACT: Hannes Portmann, Vice
President, Corporate Development, Direct: +1 (416) 324-6014, Email:
info@newgold.com
SOURCE New Gold Inc.