Mr. Robert Gallagher reports
NEW GOLD ANNOUNCES PIT WALL MOVEMENT AT CERRO SAN PEDRO MINE
A minor pit wall movement occurred
at New Gold Inc.'s Cerro San Pedro mine in Mexico on Aug. 23, 2013. Approximately
800,000 tonnes of material moved on the northeast pit wall.
Importantly, no one was injured; however, as a precautionary measure,
mining in the area below the pit wall movement has been temporarily
suspended. New Gold is working with geotechnical experts to evaluate
the area and assess the impact on the company's near-term mine plan and
production at Cerro San Pedro. The objective is to develop a plan for
the safe resumption of mining in the area below the movement; however,
if it is determined that this area will not be accessible until the
next phase of mining, scheduled to take place in 2014, the company's
preliminary estimate is that approximately 15,000 ounces of gold
production would be carried forward from 2013 into future periods. The
cost to mine and recover these ounces is not expected to increase by a
material amount.
"Our primary focus is on ensuring the safety of our team and, as a
result, we have stopped mining activity below the area of the ground
movement," stated Robert Gallagher, president and chief executive
officer. "We are currently assessing the ground conditions and plan to
adjust our mine plan to maximize our 2013 production; however, any
ounces that cannot be accessed this year as a result of the slide are
expected to be mined in the coming two years."
Separately, in the last month, recoveries from the Cerro San Pedro leach
pad have been below the company's targets. New Gold is evaluating
various alternatives to restore the recovery rates to historical
levels.
New Gold anticipates that Cerro San Pedro's 2013 production will be
below original expectations; however, efforts to mitigate the impact of
the pit wall movement and lower recovery rates are already under way.
New Gold will provide further details on the 2013 outlook for Cerro San
Pedro, including the amount of production that is expected to be
carried forward to future periods, as well as any potential impact on
the consolidated company as part of its third quarter results.
We seek Safe Harbor.
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