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VANCOUVER, March 16 /CNW/ - New Gold Inc. ("New Gold") (TSX: NGD) (AMEX: NGD) today announces that authorities in Chile have approved an Environmental Impact Assessment ("EIA") for the El Morro project in northern Chile. New Gold is a 30 percent joint venture partner in the project, with Goldcorp Inc. ("Goldcorp"), the project developer, holding 70 percent.


The granting of the EIA facilitates commencement of construction activities by Goldcorp, and specific permits will be obtained during the course of project implementation. Goldcorp will now conduct condemnation drilling, and subsequent exploration drilling will concentrate on in-fill drilling and sampling for metallurgical and geo-technical data. A further update to the feasibility study is expected in the third quarter of 2011, including revised capital and operating cost estimates and some refinements to the mine plan and mining equipment requirements.


"The exploration upside at El Morro remains tremendously exciting," stated Robert Gallagher, President and Chief Executive Officer. "The El Morro project in Chile is a world-class project in one of the best mining jurisdictions in the world, and has the potential to have a significant positive impact on our cash flow. Approval of the EIA is a critical milestone in the advancement of the project."


El Morro is an advanced stage copper-gold project located in northern Chile. New Gold's share of proven and probable reserves is 2.5 million ounces of gold and 1.8 billion pounds of copper with an additional 1.3 million ounces of gold and 0.6 billion pounds of copper in the inferred resource category. On February 10, 2011, New Gold announced an updated mineral reserve and resource estimate as of year-end 2010, reflecting new mineral reserve and resource estimates announced by Goldcorp.


For additional detail on Reserves and Resources, including related assumptions and disclosure, please refer to the Company's news release issued February 10, 2011.




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About New Gold Inc.

New Gold is an intermediate gold mining company. The Mesquite Mine in the
United States, the Cerro San Pedro Mine in Mexico and Peak Gold Mines in
Australia are expected to produce between 380,000 and 400,000 ounces of
gold in 2011. The fully-funded New Afton project in Canada is scheduled
to add further growth in 2012. In addition, New Gold owns 30% of the
world-class El Morro project located in Chile. For further information on
the company, please visit http://www.newgold.com/">www.newgold.com.