VANCOUVER, Sept. 19, 2011 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD)(NYSE AMEX:NGD) today announces an updated National Instrument 43-101 compliant mineral resource estimate for the Blackwater Project in central British Columbia.

Indicated gold resource: 165 million tonnes at an average grade of 1.01 g/t containing 5.4 million ounces of gold
Inferred gold resource: 39 million tonnes at an average grade of 0.94 g/t containing 1.2 million ounces of gold
The updated mineral resource estimate incorporates drill results from both the 100%-owned southern portion of the project and the 75%-owned northern portion, where Silver Quest Resources Ltd. owns the remaining 25%. The resource estimates by property are summarized in the table below:

Blackwater Deposit - September 2011 Resource Estimates by Property at 0.4 g/t Au Cut-off grade
Property Indicated Inferred
Tonnes
000's Grade Total
Contained
Gold (Moz) New Gold
share
(Moz) Tonnes
000's Grade Total
Contained
Gold (Moz) New Gold
share
(Moz)
Gold
(g/t) Silver
(g/t) Gold
(g/t) Silver
(g/t)
Dave and Jarrit (100% New Gold) 87,226 1.12 6.0 3.13 3.13 9,533 1.13 6.5 0.35 0.35
Davidson (75% New Gold/ 25% Silver Quest) 77,929 0.89 4.1 2.22 1.66 29,226 0.88 4.2 0.82 0.61
Total Blackwater 165,155 1.01 5.1 5.35 4.79 38,759 0.94 4.8 1.17 0.96
New Gold's share of Indicated resources increased by 3.0 million ounces to 4.8 million ounces when compared to the initial March 2011 resource estimate for the deposit. This increase was a result of continued drilling which led to approximately 1.0 million ounces of Inferred resources from the March 2011 estimate being upgraded leaving New Gold's share of Inferred resources at 1.0 million ounces compared to 2.0 million ounces in March 2011.

"We are thrilled to be able to provide this update on Blackwater which further supports the great potential we see for this asset," stated Randall Oliphant, Executive Chairman. "For our exploration team to have already added over 50% to our gold resources at Blackwater is an excellent start. We intend to aggressively progress this asset for the benefit of our shareholders."

The updated estimate incorporates drilling completed through July 2011. New Gold continues to actively drill the deposit which remains open in all directions and at depth. The table below summarizes the mineral resource estimate for the deposit at selected cut-off grades:

Blackwater Deposit - September 2011 Indicated and Inferred Resource Estimates
Cut-off g/t Gold Indicated Inferred
Tonnes
000's Grade Contained
Gold (Moz) Tonnes
000's Grade Contained
Gold (Moz)
Gold
(g/t) Silver
(g/t) Gold
(g/t) Silver
(g/t)
0.3 183,726 0.94 4.9 5.56 42,604 0.88 4.7 1.21
0.4 165,155 1.01 5.1 5.35 38,759 0.94 4.8 1.17
0.5 137,035 1.12 5.4 4.94 32,315 1.03 5.1 1.07
"We are extremely pleased with the updated resource as we have added meaningfully to the gold resource both in size and quality in a short period of time," stated Mark Petersen, Vice President, Exploration. "While this is a great first step, we are equally excited about the continued potential of Blackwater both around and below the current resource as well as on the greater Blackwater property. We look forward to additional strong results through the remainder of 2011 and into the future."

The updated mineral resource estimate adds an additional 71 core holes (24,660 metres) to the initial March 2011 resource estimate, bringing the total number of core holes used for the estimate to 148 (49,223 metres). Grade estimation was carried out by the inverse distance cubed method using 5 metre downhole drill composites. Gold grades were capped prior to compositing at 11 g/t within a low grade outer grade shell domain and at 17 g/t within an inner higher grade domain based on a 0.5 g/t grade shell. All silver grades were capped at 50 g/t. Classified blocks were constrained by an optimized pit shell using a gold price of $1,200 per ounce. Block dimensions were 10 by 10 by 10 metres. Density values assigned to the principal lithologies are based on 7,705 bulk density measurements of drill core.

The resource estimate and other scientific and technical information contained in this news release were prepared by Mr. Ronald Simpson, P. Geo, President of Geosim Services Inc., an independent "Qualified Person" under National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). The NI 43-101 technical report in respect of the mineral resource estimate disclosed herein will be filed on SEDAR within 45 days of the date of this news release. Mark Petersen, New Gold Vice President, Exploration, Certified Professional Geologist and "Qualified Person" under NI 43-101 has reviewed and approved the contents of this news release.

New Gold continues to actively drill the Blackwater deposit and looks forward to providing further updates on the company's exploration efforts over the coming months.

Quality Assurance
New Gold maintains a Quality Assurance / Quality Control ("QA/QC") program at the Blackwater Project using industry best practices that are consistent with the QA/QC protocols in use at all of its exploration and development projects. Key elements of New Gold's QA/QC program include chain of custody of samples, regular insertion of certified reference standards and blanks, and duplicate check assays. Drill core is halved and shipped in sealed bags to Eco Tech Laboratories in Kamloops, British Columbia. Check analyses are completed by ALS Chemex Laboratories, Vancouver, British Columbia.

About New Gold Inc.
New Gold is an intermediate gold mining company. The company has a portfolio of three producing assets and three significant development projects. 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 and, in June 2011, New Gold acquired the exciting Blackwater project in Canada. For further information on the company, please visit www.newgold.com

SILVER QUEST ANNOUNCES UPDATED GOLD RESOURCE ESTIMATE AT DAVIDSON PROPERTY, BC

Silver Quest Resources Ltd. has released an updated National Instrument 43-101-compliant resource estimate has been prepared on the Davidson property, located 100 kilometres south of Vanderhoof in central British Columbia, Canada. The Davidson Property, which is the subject of a joint venture with New Gold Inc. ("New Gold") (TSX:NGD), covers the northern portion of New Gold's Blackwater Gold Project. New Gold has a 75% interest in the Davidson Property and acts as operator of the Davidson joint venture.

New Gold today reported the results of an independent resource estimate for the Blackwater Gold Project, including information on the resource estimate for the Davidson Property. (see New Gold News Release dated September 19, 2011) At a cut-off grade of 0.40 grams per tonne (g/t) gold, the Davidson Property is estimated to contain 77,929,000 tonnes at an average grade of 0.89 g/t gold, for 2.2 million ounces of gold in the Indicated category. The Property also contains 29,226,000 tonnes at an average grade of 0.88 g/t gold, for 0.82 million ounces of gold in the Inferred category. The table below summarizes the parties' respective interests in the Davidson Property resource estimate: