New Gold Crashes On This Bad News

UPDATE 1-Mexican court block New Gold's appeal on mine ruling

09:30 EDT Wednesday, July 07, 2010

* Says not got reason for denial of environmental permit

* Not aware of implications on mine

* Says to approach appeals court, may go to Supreme Court

July 7 (Reuters) - Canada's New Gold on Wednesday said a Mexican district court had denied its appeal against a federal ruling that cancelled the gold miner's environmental permit at its Cerro San Pedro mine.

Operations at the mine were suspended in November last year after the country's environment ministry, SEMARNAT, acting on a federal court ruling, revoked the mine's 2006 environmental permit.

New Gold said it had not yet got a written reason for the denial and that it was not aware of the effect on the mine in San Luis Potosi.

New Gold said it would file an appeal in the appeals court after reviewing the full decision and that it may also file an application with the Supreme Court.

The company said it was in talks with both SEMARNAT and PROFEPA, Mexico's environmental enforcement agency, to work towards the uninterrupted operation of the mine.

Shares of the Vancouver, British Columbia-based company closed at C$6.08 Tuesday on the Toronto Stock Exchange. (Reporting by Koustav Samanta in Bangalore; Editing by Savio D'Souza)