THE CANADIAN PRESS

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VANCOUVER, B.C. - New Gold Inc. (TSX:NGD) said Friday it is placing its Amapari mine in Brazil on temporary care and maintenance, less than two months after writing down the value of the troubled project.

The Vancouver-based miner said limited oxide ores at Amapari led to the decision.

"We had hoped to mine and process oxide ores through the third quarter of 2009, but efforts to maintain recent improvements in production and costs with the increasing amounts of hard transition ore and waste in the Amapari pits have been unsuccessful," said New Gold Chief Executive Robert Gallagher. . "While significant resources remain at Amapari, the additional capital required to maintain economic production levels and the limited remaining oxide reserves justifies the decision to place the mine on care and maintenance."

Last November, New Gold announced it was taking a US$156-million charge after drilling results revealed a lack of economically viable oxides at the mine.

The company, which keeps its books in U.S. dollars, posted a loss of $148.9 million in its most recent quarter.