UPDATE 2-New Gold suspends mine after Mexico court ruling

* Cerro San Pedro mine suspended after ruling

* Gold recoveries from mined ore continuing

* Shares down 15 percent

(Adds details, analyst comments)

TORONTO, Nov 19 (Reuters) - Shares of New Gold Inc (NGD.TO) dropped 15 percent on Thursday after the Canadian miner said it had suspended mining at its Cerro San Pedro operation in Mexico following an order from environmental authorities.

The company said it was pursuing all legal appeals and cooperating with Mexican authorities after the country's environment ministry, acting on a federal court ruling, revoked the mine's 2006 environmental permit last week.

New Gold said in the statement the mine, which was expected to produce between 90,000 and 100,000 ounces of gold this year, has been operating in full compliance with required permits and government authorizations.

"We are taking all possible steps to respond to the challenges to our legal ability to operate the mine, and believe that we will resume full operations," Chief Executive Robert Gallagher said.

New Gold said mining has been stopped, but gold recovery continues from mined ore.

The mine has faced opposition since it began operating in 2006 from local groups and environmentalists, who say the site in the northern state of San Luis Potosi is historically important and the operation threatens local watersheds.

The mine is a heap leach operation, which uses cyanide to remove gold from the mined rock.

George Albino, an analyst at Macquarie Equities Research, said he expects the situation to be resolved, but said the company's shares will suffer until that happens.

"In our view, Mexico is a pro-mining country and will ultimately allow New Gold to resume mining operations at (Cerro San Pedro) in spite of the current setback," he said in a note.

New Gold was down 68 Canadian cents at C$3.86 on the Toronto Stock Exchange. ($1=$1.07 Canadian) (Reporting by Cameron French, additional reporting by Mica Rosenberg in Mexico)