SACRAMENTO, Calif., June 15, 2005 (PRIMEZONE) -- Newgold, Inc. (OTCBB:NGLD) announced today that it has recently signed an extension to a letter of intent to joint venture two separate leasehold mining interests in Lander County, Nevada.
As of June 7, 2005 Newgold, Inc. was re-listed on the OTC Bulletin Board. Now that it is part of the OTCBB trading market Newgold, Inc. expects to actively grow the company through the funding of mining operations at its Relief Canyon mining property and by acquiring additional mining properties. Critical to the acquisition strategy is the Red Cap Project ("Red Caps"). Concurrent with the efforts to being re-listed on the OTCBB Newgold performed and completed its due diligence on Red Caps. Accordingly, if final terms are agreed upon and the Red Caps is acquired, then closing is expected to occur during the summer of 2005.
Red Caps consists of approximately 23 unpatented mining claims while the second leasehold interest, known as the BXA project, consists of approximately 77 unpatented mining claims. Located on the Battle Mountain-Eureka mineral belt and the Cortez trend, these mineral trends are parallel to the Carlin Trend about 50 kilometers to the east. The Red Cap Project is located close to Placer Dome Inc.'s (NYSE) Cortez mine complex gold mine holdings which are currently in production.
The letter of intent agreement calls for Newgold to enter into a joint venture and make annual expenditures over the next three years on these leaseholds, which if fully funded by Newgold, will result in a 66.66% overall interest in the leaseholds. Newgold's joint venture partner is ASDi LLC, a wholly owned entity of its Chairman and CEO, A. Scott Dockter. Newgold will be the operator of the joint venture.
Going forward, Newgold's business will be to acquire, explore and, if warranted, develop various mining properties located in North America. It currently owns the Relief Canyon mine project in Nevada, consisting of 21 lode claims and 57 mill site claims with mining infrastructure currently on maintenance status. The Company plans to carryout comprehensive exploration and development programs on its properties. While the Company may fund and conduct these activities itself, the Company's current plan is to outsource most of these activities through the use of various joint venture, royalty or partnership arrangements pursuant to which other companies would agree to finance and carryout the exploration and development programs on the Company's mining properties. Consequently, the Company's current plan will not require the hiring of significant numbers of mining employees but will require a smaller group of employees to monitor and/or supervise the mining and exploration activities of other entities in exchange for royalties or other revenue sharing arrangements.
Safe Harbor Statement
The matters discussed in this release contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve risks and uncertainties. Although Newgold believes that the expectations reflected in such forward-looking statements are reasonable, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Newgold cautions investors that any forward-looking statements made by Newgold are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those reflected in forward-looking statements include, but are not limited to, risks and uncertainties regarding the actual mineralization of Newgold's mining properties, the unproven nature of and potential changes to Newgold's business model, the risk that the capital and other resources that Newgold will need to exploit its business model will not be available, and the risks discussed in Newgold's Form 10-KSB and in Newgold's 10-QSB's and in Newgold's other filings with the Securities and Exchange Commission.