June 15, 2011 / 1:03 PM / in 7 years

UPDATE 1-New Gold says to raise exploration budget at British Columbia project

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June 15 (Reuters) - New Gold Inc said it is planning to increase drilling and also significantly raise exploration budget at its recently bought Blackwater project in central British Columbia.

The mid-sized Canadian gold miner, which is planning to drill 40,000-50,000 metres in the second half of the year, said it is budgeting $20 million for exploration at the project.

In April, New Gold said it had struck a deal to acquire gold exploration company Richfield Ventures that gave it control of Richfield’s flagship Blackwater project. The acquisition was to add about 3.8 million ounces of gold resources to New Gold’s portfolio.

“The holes drilled since the March 2011 resource estimate have shown good continuity and we look forward to building upon these successful results to grow the Blackwater resource,” said Mark Petersen, vice-president, exploration.

From the beginning of the year through its acquisition of Richfield, about 20,000 metres of drilling had been completed, New Gold said, adding that Richfield had targeted 30,000 metres of drilling for the full year.

The total drilling on the project for the year should be over 60,000 metres now, more than double of what Richfield had originally targeted, New Gold said in a statement.

New Gold shares closed at C$8.86 on Tuesday on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Maju Samuel)

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