Name: Mesquite mine.

Location: The Mesquite mine is located in Imperial county, California, about 70 km north-west of Yuma, Arizona, and 230 km east of San Diego, California, in the US.

Controlling Company: New Gold (100%)

Brief History: The Mesquite mine originally started operations in 1986 and has, over the last 23 years, been subject to significant exploration, with more than 6 000 reverse circulation drill holes having been completed during its life. New Gold acquired the mine in June 2009, as a result of a successful business combination with Western Goldfields Inc (WGI), which WGI acquired from Newmont Mining in 2003. WGI subsequently completed a positive feasibility study in 2006 and started commercial production at Mesquite in January 2008.

Brief Description: The mineral rights at the Mesquite mine cover an area of about 1 890 ha . They comprise 212 unpatented and 53 patented mining lode claims, 122 patented and 97 unpatented mill site claims, 266.3 ha of California state leased land and 127.5 ha of fee lands.

Mining Method: Openpit.

Major Infrastructure and Equipment:  The physical plant site includes heap-leach pads, a process plant, workshops, warehouses, administration buildings and dry facilities.

Facilities providing basic infrastructure for the mine include electric power, heat, water treatment and supply, as well as sewage treatment.

Mine infrastructure includes openpits, ramps, maintenance shops and a mobile equipment fleet.

Products: Gold.

Reserves: Total proven and probable reserves as at December 31, 2011, were 153.35-million tons, with a grading of 0,56 g/t gold.

Resources: Total measured and indicated resources, as at December 31, 2008, were 373.6-million tons, with a grading of 0.46 g/t gold.

Geology/Mineralisation: The Mesquite mine comprises two subparallel, Oligocene age orebodies –  Big Chief-Vista and Rainbow. Gold mineralisation is hosted by Mesozoic gneisses that are intruded by biotite/muscovite rich granites. The district is covered by a thin veneer (0 m to 90 m) of Tertiary and Quaternary sediments. Gold mineralisation is bound by postmineral faulting related to the Neogene San Andreas fault system.

The gold mineralisation at Mesquite was deposited in an epithermal setting, within 150 m to 300 m of the surface. The bulk of the economically attractive mineralisation occurs as disseminations and veins in the gneisses. The majority of the veining is controlled by moderate to steeply dipping faults. Two types of gold mineralisation are dominant – pods of mineralisation of limited extent at fault intersections and mineralised trends along faults.

Gold occurs at Mesquite as native gold ranging in size from very coarse to submicron disseminations. Silver-free native gold is the most common type in the oxidised zone. A second type of gold is silver-bearing coarse gold typically found in the unoxidised zone.

Test work on unoxidised ore indicates that 65% to 78% of the gold is liberated free milling gold, 13% is associated with refractory sulphide minerals and the remainder with iron oxides and carbonates. The ores of Mesquite are proven to be readily amenable to heap-leach processing, as demonstrated by successful mining operations of the past 20 years.

Prospects: The Mesquite mine will continue to focus on increasing operational efficiencies to increase production and reduce costs throughout its 13-year mine life.

Contact person: Media and communications, Julie Taylor.

Contact details:
New Gold Inc,
Tel +1 416  324 6015
Fax  +1 416 324 9494
Email julie.taylor@newgold.com
Website: www.newgold.com.