VANCOUVER (Commodity Online): New Gold Inc.(TSX and NYSE AMEX - NGD) today announced unaudited financial and operational results for the third quarter ended September 30, 2009. Gold production was 79,531 ounces in comparison to 68,801 ounces in the same quarter in 2008. Earnings from mine operations increased by 67% to $22.6 million from $13.5 million in the third quarter of 2008.

Q3 2009 Highlights
-16% increase in gold sales to 77,645 ounces from 67,156 ounces in the corresponding quarter in 2008
-17% decrease in total cash cost(1) per ounce sold, net of by-product sales, to $470 from $565 in the corresponding quarter of 2008
-Cash and cash equivalents of $242.6 million at September 30, 2009
-Recent El Morro announcement increased the market value of the project

"We are very pleased to report increased production and reduced cash cost in the third quarter, which demonstrates that we continue to deliver on our operational targets and we fully expect to continue on this trend going forward. The company has built tremendous momentum over the last six months and plans to continue to enhance value through assets such as El Morro and delivering on our growth strategy." said Robert Gallagher, President and Chief Executive Officer.

Third Quarter Financial Review
In the third quarter 2009, earnings from mine operations were $22.6 million in comparison to $13.5 million in the third quarter of 2008. Third quarter net earnings were $4.1 million, or $0.01 per basic share, in comparison to a net loss of $148.9 million, or $0.70 per basic share, in the same period in 2008. The third quarter 2009 increase in net earnings is primarily due to: higher gold and silver production at Cerro San Pedro, initiation of production from the high copper grade Chesney ore body at Peak, the successful acquisition of the Mesquite mine which positively impacted earnings and a loss from discontinued operations of $166.9 million on the Amapari mine in the third quarter 2008.

Third quarter gold sales improved by 16% to 77,645 ounces at an average realized gold price of $959 per ounce compared to 67,156 ounces at an average realized gold price of $870 per ounce in the corresponding quarter of 2008. The increase in gold sales in comparison to 2008 is mainly due to a significant increase in total tonnes of ore mined at Cerro San Pedro and from the successful acquisition of the Mesquite mine.

Total cash cost(1) per gold ounce sold, net of by-product sales, decreased by 17% in the third quarter to $470 from $565 in the third quarter of 2008. This was primarily due to a significant increase in silver revenues at Cerro San Pedro, an increase in copper revenues at Peak Mines and a favorable Australian dollar exchange rate versus the US dollar.

Cash flow from operations in the third quarter 2009 was $6.0 million compared to cash flow used by operations of $5.4 million for the same period in 2008. The 2009 increase is mainly attributable to increased gold production, a 10% increase in average realized gold price per ounce sold of $959 in comparison to $870 in the third quarter 2008 and increased by-product revenue. Consistent with New Gold's mine plans, cash flow from operations should continue to move higher in the fourth quarter of 2009 as production continues to increase.

Nine Month Period
For the nine months ended September 30, 2009, earnings from mine operations were $48.9 million in comparison to $36.0 million in the same period in 2008. For the year to date 2009 period, the net loss was $186.7 million, or $0.67 per basic share, compared to a net loss of $143.8 million, or $1.14 per basic share, in the same period in 2008.

For the nine months ended September 30, 2009 gold sales were 185,932 ounces at an average realized gold price of $935 per ounce compared to 159,397 ounces at an average realized gold price of $915 per ounce in the corresponding period in 2008. The increase in gold sales in comparison to 2008 is mainly due to a 121% increase total tonnes of ore mined primarily from the acquisition of Mesquite and from ramping up Cerro San Pedro.

For the nine months ended September 30, 2009, total cash cost(1) per gold ounce sold, net of by-product sales, decreased by 19% to $460 from $568. The reduction in total cash cost(1) compared to the same period in 2008, is mainly due to: a significant increase in silver revenues at Cerro San Pedro and increased copper revenues at Peak Mines, which was partially offset by an unfavourable movement in the Australian dollar exchange rate.

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For the nine months ended September 30, 2009, cash flow from operations increased by $18.9 million to $24.6 million from $5.7 million in the same period in 2008. The increase in cash flow from operations is mainly attributable to increased gold production and increased by-product revenues.

2009 Forecast Update
New Gold's previously announced 2009 gold production guidance of 270,000 to 300,000 ounces and total cash cost(1) of $470 to $490 per ounce of gold sold, net of by-product sales, remains unchanged.

Value Enhancement
New Gold is working on enhancing value of key assets in its portfolio beyond the levels currently ascribed by the broader market. These assets include: the El Morro project with the recent announcement made by Barrick Gold Corporation ("Barrick"), the Amapari project, where New Gold completed a scoping study last April and several parties have shown interest in purchasing the asset, and the Asset Backed Notes, where the company may have the opportunity to sell the notes for additional cash if required, given that their trading value has been steadily increasing, in line with the broader credit market, over the last year.

El Morro is a copper-gold project in Chile. New Gold has a 30% interest with project operator Xstrata Copper Chile S.A. ("Xstrata"), which owns the remaining 70%. On October 12, 2009, Barrick announced that it has entered into an agreement with Xstrata to acquire its 70% interest in the El Morro project for $465 million in cash. New Gold has the right of first refusal to purchase Xstrata's 70% interest. The company is currently reviewing alternatives to maximize the value of its 30% stake, which would include but are not limited to the following options:
- Exchange New Gold's stake for a gold producing asset
-Participate in the development of the asset with an experienced, gold-focused partner
-Monetize New Gold's stake
New Gold's share of the El Morro project represents annual estimated average production of 95,000 ounces of gold and 100 million pounds of copper over a 15 year mine life.

Robert Gallagher, President and Chief Executive Officer said, "As we look forward to the fourth quarter, we reiterate our guidance and remain focused on continued improvements at the Mesquite operation as we ramp-up production. We will continue to work towards unlocking value from assets such as El Morro, Amapari and the Asset Backed Notes which will further strengthen our financial position and contribute towards achieving our future production growth targets." (Courtesy: PRNewswire)