Vancouver-based New Gold Inc. has announced it will double its annual production to 1 million ounces in the next six years, as it mulls introducing a dividend payout for its investors in the fall of 2012.

Gold companies' shares perform best in the years when they're increasing production from about 200,000 ounces a year to the million-ounce level, Chairman Randall Oliphant told Bloomberg News.

New Gold Inc. is scheduled to start its New Afton mine in British Columbia in 2012. It is likewise reviewing development options for its Blackwater project in British Columbia, Oliphant added. New Gold Inc. owns 30 per cent of Goldcorp Inc.'s El Morro project in Chile.

"We think we've got quite a lot of runway ahead of us," Oliphant said.

In June, New Gold Inc. got the Blackwater project when it bought Richfield Ventures Corp. for $375 million. The mine is expected to churn 600,000 ounces of gold a year.

"To us Blackwater was pretty unique, it was a 4 million-ounce gold deposit in Canada that virtually nobody had ever heard of," he said. "I don't know whether we will find another one in six months or six years."

Oliphant said New Gold Inc. is reviewing extending a dividend in 2012. He said dividends are more important for large producers that have bigger challenges to replace reserves and increase production output.

A number of gold producers, including Barrick and Newmont Mining Corp., the world's two biggest producers by sales, have increased their payouts this year following the increase in the prices of gold.

Created in 2008 when it acquired Metallica Resources Inc. and Peak Gold Ltd., New Gold Inc. operates the Mesquite gold mine in California, Cerro San Pedro in Mexico and the Peak mine in Australia. Production from the three mines this year is forecast at 400,000 ounces.

New Gold Inc. continues to expand amid rising gold prices. Oliphant said gold prices will continue to rise as the yellow metal continues to be sought after by global central banks. Growing demand from China and India as well as challenges in finding new deposits and new will also trigger gold prices to soat.

Gold hit a record high of $1,923.70 per ounce on Sept. 6. The price withdrew 6.9 per cent last week, closing below $1,600 an ounce for the first time since September.