TORONTO (miningweekly.com) - Vancouver-based New Gold sold 77 645 oz of gold in the third quarter, compared with 67 156 oz a year earlier, while cash costs declined 17% year-on-year, to $470/oz, the firm reported on Monday.

New Gold, which was formed last year from the three-way merger of juniors Metallica Resources, New Gold and Peak Gold, has operating assets in the US, Mexico and Australia and development projects in Canada and Chile.

The company's Cerro San Pedro operation, in Mexico, and Peak Mines, in Australia, hit their targets for gold production in the quarter, and silver output at Cerro San Pedro was actually higher than forecast.

In the second quarter of this year, New Gold bought Western Goldfields, which owned the Mesquite mine, in California.

The operation performed slightly below expectations in the third quarter, primarily owing to lower-than-expected grade in one of the pits in the first two months of the quarter, the company said on Monday.

Mining has since moved into another pit, where production in September exceeded the previous months and was consistent with the mine plan.

The company expects gold production at Mesquite to be "significantly higher" in the fourth quarter.

"Mesquite has worked hard over the last two quarters to achieve operational results in line with the mine plan and with a strong performance in September, is on track to significantly increase production in the fourth quarter," CEO Robert Gallagher said in a statement.

The company maintained its earlier full-year production guidance of between 270 000 oz and 300 000 oz of gold in 2009, at total cash costs of $470/oz to $490/oz per ounce sold, net of by-products.

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