December 13 2005, Vancouver, British Columbia -- New Gold Inc. (NGD:TSX/AMEX) is pleased to announce the selection of the group of engineering firms who will prepare a Feasibility Study ("FS") on the Company's 100%-owned New Afton copper-gold project ("New Afton") in Kamloops, British Columbia, Canada. The FS will be carried out by a team including, and coordinated by, Hatch Ltd. ("Hatch") who will be responsible for the processing and engineering components of the study. Mining method and reserves will be the responsibility of Australian Mining Consultants Pty Ltd. ("AMC"), and Roscoe Postle Associates Inc. ("RPA") will complete the geology and resource sections. Environmental services and permitting will be the responsibility of Rescan Environmental Services Ltd. ("Rescan"). In addition, BGC Engineering Inc. ("BGC") will maintain responsibility for tailings disposal analysis and Rockland Ltd. ("Rockland") will oversee the rock mechanics study. With the exception of AMC (who are based in Australia) all of these engineering companies are based in Vancouver, British Columbia, Canada. Each company has been selected to bring their unique experience and skills to the FS, in order that it can be completed in the most successful and expeditious manner.
In making this announcement, President and CEO Chris Bradbrook stated, "We are extremely pleased to have been able to attract such a strong group of engineering firms. We had a high level of interest from many of North America's leading engineering firms to complete this study. To arrive at our final selection we undertook an extensive and methodical process and are most appreciative of the efforts expended by all interested parties. We are anxious to commence the study and we will be proceeding in parallel, in 2006, to complete the feasibility study, permitting, and financing requirements of the Project. It is expected that the FS can be completed in the fourth quarter of 2006, at which time the Company will be in a position to determine whether the project should advance to production. The Company will now proceed with the completion of definitive contractual arrangements with the parties involved and anticipates commencement of the FS in the very near future."
Hatch is an international engineering firm with extensive experience in feasibility study coordination, assessment of processing methods for copper-gold projects, and capital cost estimating. They have an excellent track record of taking projects from feasibility to construction combined with significant experience in British Columbia.
AMC is an Australian based mining consultancy with extensive experience in mining studies, project mining reviews and feasibility studies for bulk underground mining operations. Of particular note is their previous experience in the preparation of the mining section (including the identification of the most appropriate mining method) of the FS for the underground Ridgeway gold-copper mine in Australia, which the Company feels has many similarities to its Project.
RPA, Rescan, BGC, and Rockland are well known Canadian-based mining consulting firms with extensive experience in their respective areas.
The scope of the FS includes an updated resource estimation (which will incorporate the 2005 underground in-fill drilling results), mining method selection, reserves and mine production scheduling, process plant design, tailings deposition, all infrastructure requirements and the preparation of the project economic analysis. Once complete, the FS will replace the prior Scoping Study completed on the Project (in 2003, and updated in 2004), and will establish the technical and economical potential of developing a new underground mine at the New Afton Project.
It is anticipated that total costs to complete the FS will be approximately CDN$5 million. New Gold is in excellent financial condition with approximately CDN$14 million in cash and no debt (excluding the $4 million Flow-Through offering announced yesterday, December 12th, 2005). The Company is therefore fully funded to complete the FS. New Gold has only 15.0 million shares outstanding and 16.7 million shares fully diluted (prior to the issuance of the most recently announced Flow-Through common shares).
For further information on New Gold Inc. and the New Afton Project, please contact:
Chris Bradbrook
President and Chief Executive Officer
New Gold Inc.
601 - 595 Howe Street, Vancouver, B.C. V6C 2T5
Tel: 877-977-1067 or 604-687-1629, Fax: 604-687-2845
Email: invest@newgoldinc.com
Website: www.newgoldinc.com
Safe Harbor Statement under the United States Private Securities Litigation Act of 1995: This release made may contain forward-looking statements that are affected by known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed, implied or anticipated by such forward-looking statements. Such forward-looking statements herein represent management's best judgment as of the date hereof based on information currently available. The Company does not intend to update this information and disclaims any legal liability to the contrary. Cautionary Note to U.S. Investors concerning resource estimates. This press release discusses the results of a scoping study, which is a "preliminary assessment" as defined in the Canadian NI 43-101, under which the use of inferred mineral resources is permitted under certain circumstances. The U.S. Securities and Exchange Commission regulations do not recognize any circumstances in which inferred mineral resources may be so used. U.S. investors are cautioned not to assume that any part or all of an inferred resource category described as a 'resource falling within the mine plan' will ever be converted into 'reserves' within the definition of that term in SEC Industry Guide 7. Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources. This section uses the terms "measured" and "indicated resources." We advise U.S. investors that, while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.
WARNING: The Company relies upon litigation protection for "forward-looking" statements.
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