July 20, 2010 / 12:54 PM / 7 years ago

UPDATE 1-New Gold quarterly production rises 62 pct

* Q2 gold production 89,919 oz Vs 55,633 oz a yr ago

* Co has appealed recent ruling against Cerro San Pedro (All figures in U.S. dollars, unless noted)

TORONTO, July 20 (Reuters) - New Gold (NGD.TO) said on Tuesday its second-quarter gold production rose 62 percent, driven by increased output from its Mesquite mine in the United States and its Cerro San Pedro Mine in Mexico.

Vancouver-based New Gold, which also owns the Peak mine in Australia, said its quarterly gold production rose to 89,919 ounces, up from 55,633 ounces a year earlier. Gold sales rose 56 percent to 82,402 ounces, up from 52,890 ounces, a year earlier.

The gold producer said its total cash costs in the quarter were $490 per ounce. Gold currently trades at around $1,182 an ounce.

The company reiterated its 2010 full year production forecast of 330,000 to 360,000 ounces of gold at a total cash costs of $445 to $465 per ounce.

New Gold also said it continues to work with local and federal government authorities in Mexico to put in place a new environmental study that addresses the challenges against the validity of its existing study at Cerro San Pedro.

Earlier this month, New Gold said a Mexican court denied its appeal of a federal ruling that had revoked the environmental permit at the mine. [ID:nSGE6660GO]

The company won an injunction in December against the original ruling, which had forced it to suspend operations at Cerro San Pedro. However, the latest district court ruling could again force the company to halt production at the mine.

New Gold has appealed the new ruling and plans to seek a new injunction, if a shutdown order is issued, while its appeal is pending.

The company said the mine is currently fully operational and it intends to pursue all available avenues to ensure the mine continues to operate. (Reporting by Euan Rocha; Editing by Derek Caney)

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