New Gold Inc.
TSX : NGD
AMEX : NGD

New Gold Inc.

May 07, 2007 14:51 ET

New Gold Inc.: First Quarter 2007 Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 7, 2007) - (All dollar amounts in Canadian dollars)

New Gold Inc. (TSX:NGD)(AMEX:NGD) is pleased to announce its financial results for the period ended March 31, 2007 (To review the complete interim unaudited financial statements or Management Discussion and Analysis please see the Company's SEDAR filings at www.sedar.com or on the Company's website at www.newgoldinc.com).

The Company incurred a loss of $0.4 million or $0.02 per share in the first quarter 2007, compared with a loss of $1.3 million or $0.07 per share in the first quarter of 2006. The reduction in the loss is directly related to lower stock-based compensation amortization charges and higher interest revenue due to the higher average cash balances in the quarter compared with those in the first quarter 2006. During the first quarter of 2007, the Company invested approximately $5.9 million on its New Afton Project. This was comprised of $3.7 million on development activities, principally related to the construction of a new pit access road, $1.9 million on the feasibility study and $0.3 million on surface exploration programs in and around the current resource. During the comparable period in 2006 the Company spent $4.8 million principally on the New Afton Project, with lesser amounts on its Ajax Project.

As at March 31, 2007, the Company had working capital of $56.8 million versus $65.5 million at December 31, 2006. The Company's current working capital level is sufficient to meet its 2007 general corporate and administrative costs, fund the planned 2007 exploration activities and commence the initial stage of mine development on the New Afton Project. However, New Gold will be required to raise significant additional funds by either issuing common shares, flow-through common shares, by the arrangement of bank or public debt, or a combination of these alternatives to fulfill the funding requirement difference between the Company's current cash resources and the ultimate amount required to fund the full development of the New Afton Project, and to cover future administrative and exploration activities. There are no guarantees that the Company will be able to raise the required funds as and when required.

New Gold continues to be in strong financial condition with a current cash position of approximately CDN$57 million and no debt. The Company has only 24.2 million shares outstanding (30.6 million shares fully diluted).

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the Ontario Securities Act or "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 of the United States. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to the interpretation of drill results and the estimation of mineral resources and reserves, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, metal recoveries, accidents, equipment breakdowns, title matters and surface access, labour disputes or other unanticipated difficulties with or interruptions in production, the potential for delays in exploration or development activities or the completion of feasibility studies, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, failure to obtain adequate financing on a timely basis and other risks and uncertainties, including those described under Risk Factors Relating to the Company's Business in the Company's Annual Information Form and in each management discussion and analysis. Forward-looking information is in addition based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of copper and gold, that the feasibility study will confirm that a technically viable and economic operation exists, that the Company will receive required permits and access to surface rights, that the Company can access financing, appropriate equipment and sufficient labour and that the political environment within British Columbia and Canada will continue to support the development of environmentally safe mining projects so that the Company will be able to commence the development of the New Afton project within the timetable to be established by the feasibility study. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements.

Cautionary note to U.S. investors concerning estimates of Measured and Indicated Resources, and the use the terms "measured" and "indicated resources". We advise U.S. investors that, while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

WARNING: The Company relies upon litigation protection for "forward-looking" statements.

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