New Gold Rises in Toronto After Mexican Mine RulingPublished by MAC on 2009-12-22
Source: Bloomberg, New Gold
Recently, a Mexican community celebrated news that Canadian firm New Gold's Cerro de San Pedro Project was closed by court order on environmental grounds. See:
However, what one court gives, another takes away. The decision has been overturned, and work has resumed while an appeal is being heard.
New Gold Rises in Toronto After Mexican Mine Ruling
By Rob Delaney, Bloomberg
14 December 2009
Shares in New Gold Inc., the Canadian miner with operations in the Americas and Australia, rose in Toronto after it said a Mexican court temporarily overturned an order to suspend mining at the company's Cerro San Pedro site.
New Gold climbed 45 cents, or 13 percent, to C$3.84 at 4:15 p.m. in Toronto Stock Exchange trading, the biggest one-day gain since May 12. The shares have more than doubled this year.
The court overturned a ruling by an environmental enforcement agency that suspended production at the mine in central Mexico, the Vancouver-based company said in a statement. The decision will allow mining operations to resume through the duration of an appeal, New Gold said.
"We are very pleased with the court's decision and view this as an important interim step as we continue to work with the government and administrative bodies to find a permanent and mutually beneficial solution," Chief Executive Officer Robert Gallagher said in the statement.
Cerro San Pedro will produce as much as 100,000 ounces this year, compared with 84,600 ounces in 2008, New Gold says on its Web site.
New Gold Granted Injunction to Temporarily Lift Shutdown Order at Cerro San Pedro Mine
New Gold Press Release
14 December 2009
VANCOUVER, -- New Gold Inc. ("New Gold") (TSX and NYSE AMEX-NGD) today announces that it has been granted an injunction related to the suspension of operations at its Cerro San Pedro mine in Mexico. The court ruling temporarily overturns the Mexican environmental enforcement agency's order to suspend mining operations at the Cerro San Pedro mine. New Gold's wholly owned Mexican subsidiary, Minera San Xavier ("MSX"), filed the appeal seeking to overturn the suspension order on December 3, 2009. Mining operations will recommence at the Cerro San Pedro mine and are expected to continue through the duration of the appeal trial.
"We are very pleased with the court's decision and view this as an important interim step as we continue to work with the government and administrative bodies to find a permanent and mutually-beneficial solution," says Robert Gallagher, New Gold President and CEO. "We believe the information to be provided during the trial should ultimately result in a positive long-term outcome for the company, and equally as important, for the employees at MSX, their families and all of the other key stakeholders of New Gold."
The court decision states that to grant the injunction would not prejudice the social interest or contravene the public order. Over 500 employees and contractors at the Cerro San Pedro Mine and 1,500 indirect jobs could have been impacted if the mine suspension was prolonged. The company has and continues to strive to improve the quality of life of its employees and that of the surrounding communities through various initiatives including: enhancement of education, provision of free medical services and development of improved local infrastructure.
MSX has an enviable record of compliance with Mexican and international environmental standards and enjoys a high degree of acceptance by a majority of the residents in the area surrounding the mine due to its outstanding record of caring for the environment and its positive work in the communities.
New Gold will continue to provide updates on this matter.