* New Gold eyeing options for El Morro stake

* Company would prefer having a producing asset

(In U.S. dollars, unless noted)

By Cameron French

TORONTO, Oct 14 (Reuters) - New Gold Inc (NGD.TO) is examining options for its 30-percent stake in the El Morro copper-gold project in Chile following Barrick Gold's (ABX.TO) purchase of the other 70 percent of the project, a spokeswoman said on Wednesday.

The company's options include keeping the stake, selling it, or swapping it for a producing asset, said Melanie Hennessey, the company's vice-president of investor relations.

"We currently would favor having a producing asset at this stage, given that it would provide us greater flexibility going forward to do further acquisitions," she said.

Shares of New Gold have risen 4.5 percent since Barrick said on Monday it was buying the asset -- which has a resource of 8.3 million ounces of gold and 6.3 billion pounds of copper -- from Xstrata (XTA.L).

Some analysts have boosted price targets on New Gold, saying Barrick's $465 million purchase price for a 70-percent stake infers a higher valuation for New Gold's stake.

Blackmont Capital analyst Richard Gray said in a research note he expects New Gold will sell its interest in the project to Barrick for cash or an operating mine in Barrick's portfolio.

Barrick, the world's top gold producer, expects cost savings on the $2.5 billion project due to El Morro's proximity to Barrick's Pascua Lama project and Veladero mine.

New Gold has the right of first refusal on Barrick's purchase -- meaning it has the right to match the offer -- until January 2010. Hennessey wouldn't comment on whether New Gold might consider doing so, but noted the high cost of developing the project.

"We would have to look at other ways of being able to fund that development of the full capital requirements," she said.

New Gold shares were down 5 Canadian cents at C$4.58 on the Toronto Stock Exchange. ($1=$1.03 Canadian) (Editing by Janet Guttsman)