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UPDATE: New Gold Announces Preliminary Economic Assessment at Blackwater; Shares Up 3% at Midday

New Gold Inc. (NGD.TO) today announced a positive Preliminary Economic Assessment for its Blackwater Gold Project in British Columbia, Canada.

Over the initial 15 years of its mine life, Blackwater is estimated to produce an annual average of 507,000 ounces of gold and 2,039,000 ounces of silver at total cash costs per ounce sold, net of by-product sales, of $536 per ounce. At assumed gold and silver prices of $1,275 and $22.50 per ounce and a 0.94 US$/CDN$ foreign exchange rate, the Project is expected to yield a base case after-tax, 5% net present value of $1.1 billion and an after-tax internal rate of return of 14.0%. At spot commodity prices of $1,775 per ounce gold and $34.50 per ounce silver and a parity exchange rate, the after-tax, 5% NPV and IRR move to $2.8 billion and 25.8%, respectively. All NPV calculations are calculated to the beginning of the construction period in 2015. The PEA was completed on a pre-tax basis by AMEC Americas Limited, an independent and internationally-recognized engineering firm. All after-tax calculations were completed by New Gold.

New Gold is trading at $12.43, after touching a day high of $12.50. Close to 2.7 million shares have changed hands.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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