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Last updated on April 24, 2014 at 5:50 EDT

New Gold Announces Chilean Court Decision Regarding El Morro Environmental Permit

April 30, 2012

VANCOUVER, April 30, 2012 /PRNewswire/ – New Gold Inc. (“New Gold”) (TSX and
NYSE AMEX:NGD) today announces that the Chilean Supreme Court has
temporarily suspended the approval of the environmental permit for the
El Morro Project. The El Morro Project is a joint venture between New
Gold and Goldcorp Inc. (“Goldcorp”), where New Gold is a 30 percent
partner and Goldcorp is the 70 percent partner and the project
developer and operator. The environmental permit was originally
approved on March 14, 2011.

The Supreme Court’s April 27, 2012 decision relates to a constitutional
action that was filed by the Comunidad Agrícola Los Huasco Altinos
(“CAHA”) in May 2011 requesting the invalidation of the March 2011
resolution by the Chilean Environmental Permitting Authority (the
“Servicio de Evaluación Ambiental” or “SEA”) that approved the
project’s environmental permit. While the action was filed against the
SEA, Sociedad Contractual Minera El Morro (the “El Morro Company”), the
Chilean company, jointly held by New Gold and Goldcorp, which owns and
operates the El Morro Project, participated in the legal proceedings as
an interested party and beneficiary of the environmental permit.

In February 2012, the Court of Appeals of Antofagasta ruled against the
approval of the project’s environmental permit. The main grounds for
the court ruling is that the SEA had not adequately consulted nor
compensated the indigenous people (Diaguita nation) that integrate
CAHA. Under the law of Chile, the ruling of the Court of Appeals was
not to be effective unless and until confirmed by an order issued by
the Supreme Court of Chile. As such, the El Morro Company continued
with the development of the El Morro Project while the SEA and the El
Morro Company appealed the Court of Appeals of Antofagasta’s decision
before the Chilean Supreme Court.

It was anticipated that the Chilean Supreme Court would work through the
appeal filed by the SEA and the El Morro Company over the course of the
coming months allowing for hearings to be conducted with the impacted
parties, however, the court’s decision confirming the ruling by the
Court of Appeals of Antofagasta was announced on April 27, 2012. Based
on the Supreme Court’s announcement, the El Morro Company immediately
suspended all project field work being executed under the terms of the
environmental permit. Safety and security staff will continue to work
to protect the public, the equipment, and the facilities under
construction. Activities not related to site construction, including
detailed engineering, design work and architectural planning will
continue.

Throughout this process, Goldcorp, the project developer and operator,
has worked closely with the SEA, the party who has been the focus of
the legal challenges, and together the parties intend to immediately
address any perceived deficiencies regarding the consultation or
compensation of indigenous people in the area of the El Morro Project.

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. New Gold’s most immediate development project, New Afton, is
scheduled to begin production in mid-2012 and together with the
Mesquite Mine in the United States, the Cerro San Pedro Mine in Mexico
and Peak Gold Mines in Australia, the company is forecasting between
405,000 and 445,000 ounces of gold production in 2012. In addition, New
Gold owns 30% of the world-class El Morro project located in Chile and
100% of the exciting Blackwater project in Canada. For further
information on the company, please visit www.newgold.com.

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 use of forward-looking terminology such as “plans”,
“expects”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates”, “projects”, “potential”,
“believes” or variations of such words and phrases or statements that
certain actions, events or results “may”, “could”, “would”,  “should”,
“might” or “will be taken”, “occur” or “be achieved” or the negative
connotation. 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 various transactions 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 and to
Chile where there are challenges related to the environmental permit
for the El Morro Project; the lack of certainty with respect to the
Mexican, Chilean 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, as well as 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
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 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.

SOURCE New Gold Inc.


Source: PR Newswire