Infill drilling enhances New Afton

Vancouver With an infill drilling program nearing completion, New Gold (NGD-T, NGD-X) sees potential to enhance a previously designed resource model for the New Afton copper-gold project, 10 km west of Kamloops, in southwestern British Columbia.

The company says recent underground infill drilling on three sections generally intersected high-grade mineralization where it was expected, with a number of holes returning higher than expected grades over substantial thicknesses.

Hole UA-36 returned 1.48% copper, 1.17 grams gold, 2.18 grams silver and 0.16 gram palladium, or 2.31% copper-equivalent, over 182 metres (115 metres true thickness). This includes a higher grade interval of 2.41% copper, 1.66 grams gold, 3.13 grams silver and 0.15 gram palladium, or 3.56% copper-equivalent, over 56 metres (35 metres true thickness). Another hole on the same section (40E) returned 1.28% copper, 1.01 grams gold, 1.6 grams silver and 0.25 gram palladium, or 2.03% copper-equivalent, over 100 metres (59 metres true thickness).

Holes on section 48E returned noticeably higher grades (more than 1.5% copper-equivalent) than indicated by the resource model. The best of these (hole UA-31) returned 1.87% copper, 1.45 grams gold, 2.12 grams silver and 0.23 gram palladium, or 2.89% copper-equivalent, over 42 metres (24 metres true thickness).

Holes from a third section (56E) met or exceeded values indicated by the resource model. Highlights include 1.04% copper, 2.25 grams gold, 3.7 grams silver and 0.24 gram palladium, or 2.6% copper-equivalent, over 52 metres (30 metres true thickness). This interval was part of a 122-metre intersection (70 metres true thickness) that returned 0.66% copper, 1.18 grams gold, 2.02 grams silver, and 0.14 gram palladium, or 1.48% copper-equivalent.

New Gold’s latest round of infill drilling was carried out on 80-metre-spacings, and another round on 40-metre-spacings will be completed by year end. The infill drilling program will be followed in early 2006 by an underground exploration program to test for potential extensions of known mineralization to the west and at depth.

Results will be used to calculate a reserve that will be incorporated into a feasibility study scheduled for completion in the second half of 2006. Using a short-list of candidates, the company is about to retain an independent engineering firm to examine the feasibility of a new underground mine adjacent and below the past-producing (1970s and 1980s) Afton copper-gold open-pit mine.

The previous resource estimate, based on a 2003 scoping study subsequently updated in 2004, estimated measured and indicated resources of 68.7 million tonnes grading 1.08% copper, 0.85 gram gold, 2.62 grams silver and 0.12 gram palladium (also calculated as 1.68% copper-equivalent, or 2.61 grams gold-equivalent). Of this total, 9.5 million tonnes were classified as measured, while the indicated resource was 59.2 million tonnes.

In addition to known resources, the company holds exploration properties that cover extensions of known zones and previously mined satellite deposits at Afton. The project area is serviced by an extensive system of haul roads and mining-related infrastructure.