Approval of El Morro Environmental Impact Assessment 

VANCOUVER, BC - New Gold Inc. reported that authorities in Chile have approved an Environmental Impact Assessment ("EIA") for the El Morro project in northern Chile. New Gold is a 30 percent joint venture partner in the project, with Goldcorp Inc. ("Goldcorp"), the project developer, holding 70 percent.

The granting of the EIA facilitates commencement of construction activities by Goldcorp, and specific permits will be obtained during the course of project implementation. Goldcorp will now conduct condemnation drilling, and subsequent exploration drilling will concentrate on in-fill drilling and sampling for metallurgical and geo-technical data. A further update to the feasibility study is expected in the third quarter of 2011, including revised capital and operating cost estimates and some refinements to the mine plan and mining equipment requirements. "The exploration upside at El Morro remains tremendously exciting," stated Robert Gallagher, President and Chief Executive Officer. "The El Morro project in Chile is a world-class project in one of the best mining jurisdictions in the world, and has the potential to have a significant positive impact on our cash flow. Approval of the EIA is a critical milestone in the advancement of the project." El Morro is an advanced stage copper-gold project located in northern Chile. New Gold's share of proven and probable reserves is 2.5 million ounces of gold and 1.8 billion pounds of copper with an additional 1.3 million ounces of gold and 0.6 billion pounds of copper in the inferred resource category. The company's address is 3110-666 Burrard St., Vancouver, BC V6C 2X8, (604)696-4100, fax: (604)696-4110.