New Gold Inc. (NGD)

[Tommy]

$NGD - New Gold Announces Blackwater Feasibility Study Results

12/12/2013 http://www.newgold.com/investors/NewGoldNews/PressReleaseDetail/2013/New-Gold-Announces-Blackwater-Feasibility-Study-Results/default.aspx

(All figures are in US dollars unless otherwise indicated)

VANCOUVER, Dec. 12, 2013 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) and (NYSE MKT:NGD) today announces the results of the Feasibility Study for its Blackwater Gold project ("Blackwater" or the "Project") in British Columbia, Canada.

Feasibility Study Highlights

Conventional truck and shovel open pit mine with 60,000 tonne per day ("tpd") whole ore leach processing plant
17-year mine life with direct processing for first 14 years and processing of stockpile thereafter
Life-of-mine operational strip ratio of 1.88 to 1.00
Life-of-mine gold and silver recoveries of 87% and 49%
Life-of-mine gold and silver production of 7 million ounces and 30 million ounces
Development capital costs of $1,865 million inclusive of a $190 million contingency
First nine years - average annual gold production of 485,000 ounces at total cash costs(1) of $555 per ounce and all-in sustaining costs(2) of $685 per ounce
Base case economics - at $1,300 per ounce gold, $22.00 per ounce silver and a 0.95 US$/C$ foreign exchange rate, Blackwater has a pre-tax 5% net present value ("NPV") of $991 million, an internal rate of return ("IRR") of 11.3% and a payback period of 6.2 years
Alternative case economics - at $1,600 per ounce gold, $26.00 per ounce silver and a parity US$/C$ foreign exchange rate, Blackwater has a pre-tax 5% NPV of $2,120 million, an IRR of 16.8% and a payback period of 4.5 years

"The completion of the Blackwater Feasibility Study is an important milestone for our company," stated Randall Oliphant, Executive Chairman of New Gold. "The Project has many great attributes including: its secure jurisdiction, long life, robust production potential, all-in sustaining costs well below industry average, and continued exploration potential. However, the combination of gold being down by over $500 per ounce since we completed the Preliminary Economic Assessment for Blackwater in September of 2012 and our Rainy River project having a more modest capital requirement, results in our primary objective being the advancement of Rainy River."

"Importantly, Rainy River shares all of Blackwater's strong project characteristics," Oliphant continued. "An updated feasibility study for Rainy River remains on schedule for completion in early 2014."

New Gold will continue to move Blackwater through the permitting phase in 2014. The company views the potential of having a fully permitted project as an important and valuable asset. In the current environment, where there has been significant commodity price volatility, New Gold wants to maximize its flexibility in respect of any future development decisions. The company plans to stage the development of its projects with the near-term focus being on the advancement of the lower capital cost Rainy River project. Thereafter, the timing of Blackwater's development will be driven by the prevailing market conditions over the coming years." ...