The Mesquite mine, operated by New Gold, is located in southern California and is permitted for open pit mining and heap leach processing. Franco-Nevada holds a royalty on the entire Mesquite property ranging from a 0.5% to 2.0% NSR, depending on the claim block. In 2010, gold sales were 169,571 ounces at a total cash cost per ounce of $596. The 2010 production benefitted from an increase in gold grade and leach pad recoveries and was partly offset by lower tonnes placed on the leach pad during the year.

New Gold expects to produce between 145,000 and 155,000 ounces of gold in 2011 at a total cash cost of between $620-$640/oz. New Gold has indicated that in 2011 ore tonnes processed and recoveries are anticipated to remain consistent with 2010 levels. However, the gold grade is expected to decline, resulting in gold production reverting to an average life-of-mine level.

New Gold was able to successfully replace ounces mined in 2010 and reported a year end reserve of 3.1 million ounces. Measured and Indicated Resources increased by 0.8 million ounces during the year to 5.7 million ounces at December 31, 2010 and Inferred Resources increased to 1.0 million ounces. New Gold indicates that Mesquite has greater than 13 years of mine life remaining.