October 19, 2009 / 12:45 PM / in 8 years

UPDATE 2-New Gold Q3 gold sales rise 16 pct

* Q3 gold sales rise to 77,645 ounces from 67,156 ounces

* Total cash cost falls 17 pct to $470/ounce

* Keeps 2009 gold production forecast unchanged (Recasts; adds details, share movement)

Oct 19 (Reuters) - New Gold Inc NGD.TO reported a 16 percent rise in quarterly gold sales, and the mid-sized gold miner maintained its 2009 gold production forecast.

Gold sales rose to 77,645 ounces in the third quarter from 67,156 ounces in the same period a year ago, helped by higher production at Cerro San Pedro mine in Mexico and Peak mines in Australia.

New Gold’s total cash cost in the quarter fell 17 percent to $470 per ounce sold from $565 per ounce sold, a year earlier.

The company expects to produce between 270,000 to 300,000 ounces of gold this year at a total cash cost of $470 to $490 per ounce sold.

New Gold said production at Mesquite mine in California was below expectations primarily due to lower-than-expected grade in the Rainbow 3 pit in the first two months of the quarter.

The company, which has been ramping up operations at Mesquite, expects fourth-quarter production at the mine to be highest for the year.

New Gold, which owns 30-percent of the El Morro copper-gold project in Chile, said it was exploring options for the project after Barrick Gold ABX.TO purchased rest of the stake from project operator Xstrata Copper Chile S.A. XTA.L

New Gold’s share of the El Morro project represents annual estimated average production of 95,000 ounces of gold and 100 million pounds of copper over a 15-year mine life.

New Gold shares were down a percent at C$4.50 Monday afternoon on the Toronto Stock Exchange. (Reporting by Krishna Chaithanya and Ashutosh Joshi in Bangalore; Editing by Ratul Ray Chaudhuri)

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