Deutsche Bank Leveraged Finance Conference October 2014

Transcription

1 Deutsche Bank Leveraged Finance Conference October 2014

2 Cautionary statements All monetary amounts in U.S. dollars unless otherwise stated Total cash costs shown net of by-product sales unless otherwise stated CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain information contained in this presentation, including any information relating to New Gold s future financial or operating performance are forward looking. All statements in this presentation, other than statements of historical fact, which address events or developments that New Gold expects to occur are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as plans, expects, is expected, budget, scheduled, targeted, estimates, forecasts, guidance, intends, anticipates, projects, potential, believes or variations of such words and phrases or statements that certain actions, events or results may, could, would, should, might or will be taken, occur or be achieved or the negative connotation of such terms. Forward-looking statements in this presentation include those on the slides entitled: New Gold investment thesis ; New Afton unlocking options ; New Afton C-Zone potential ; Rainy River potential value creation through development ; Blackwater potential value creation through development ; Organic pipeline and Cash flow growth and value, and also include, among others, statements with respect to: guidance for production, operating costs, cash costs and all-in sustaining costs; targeted milestones, the results of the Rainy River, Blackwater, and El Morro Feasibility Studies, including the expected production, costs, grades, planned activities for each of the company s projects; and targeted throughput increase at New Afton, targeted timing for commissioning and full production related to the New Afton mill expansion, Rainy River and sequencing of Blackwater and El Morro. All forward-looking statements in this presentation are based on the opinions and estimates of management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond New Gold s ability to control or predict. Certain material assumptions regarding our forward-looking statements are discussed in this presentation, New Gold s most recent MD&A, its Annual Information Form, its news releases, and its Technical Reports filed at In addition to, and subject to, such assumptions discussed in more detail elsewhere, the forward-looking statements in this presentation are also subject to the following assumptions: (1) there being no signification disruptions affecting New Gold s operations; (2) political and legal developments in jurisdictions where New Gold operates, or may in the future operate, being consistent with New Gold s current expectations; (3) the accuracy of New Gold s current mineral reserve and resource estimates; (4) the exchange rate between the Canadian dollar, Australian dollar, Mexican Peso, Chilean Peso, and U.S. dollar being approximately consistent with current levels; (5) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; (6) labour and material costs increasing on a basis consistent with New Gold s current expectations; (7) permitting and arrangements with First Nations and other Aboriginal groups in respect of Rainy River and Blackwater being consistent with New Gold s current expectations; (8) all environmental approvals (including the environmental assessment process for the Blackwater and Rainy River projects), required permits, licenses and authorizations being obtained from the relevant governments and other relevant stakeholders within the expected timelines; and (9) the results of the feasibility studies for the Rainy River, Blackwater, and El Morro projects being realized. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, without limitation: significant capital requirements; price volatility in the spot and forward markets for commodities; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Mexico and Chile; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Mexico and Chile or any other country in which New Gold currently or may in the future carry on business; taxation; controls, regulations and political or economic developments in the countries in which New Gold does or may carry on business; the speculative nature of mineral exploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary licenses and permits and complying with the permitting requirements of each jurisdiction in which New Gold operates, including, but not limited to: in Canada, obtaining the necessary permits for the Blackwater and Rainy River projects; in Mexico, where Cerro San Pedro has a history of ongoing legal challenges related to our environmental authorization (EIS); and in Chile, where certain activities by El Morro have been delayed due to litigation relating to its environmental permit; the lack of certainty with respect to foreign legal systems, which may not be immune from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law; the uncertainties inherent to current and future legal challenges New Gold is or may become a party to; diminishing quantities or grades of reserves and resources; competition; loss of key employees; additional funding requirements; rising costs of labour, supplies, fuel and equipment; actual results of current exploration or reclamation activities; uncertainties inherent to mining economic studies including the feasibility studies for Rainy River, Blackwater, and El Morro; changes in project parameters as plans continue to be refined; accidents; labour disputes; defective title to mineral claims or property or contests over claims to mineral properties; unexpected delays and costs inherent to consulting and accommodating rights of First Nations and other Aboriginal groups; uncertainties with respect to obtaining all necessary surface and other land use rights or tenure for Rainy River; risks, uncertainties and unanticipated delays associated with obtaining and maintaining necessary licenses, permits and authorizations and complying with permitting requirements. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental events and hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as Risk Factors included in New Gold s disclosure documents filed on and available at Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. All of the forwardlooking statements contained in this presentation are qualified by these cautionary statements. New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws. The footnotes and endnotes to this presentation contain important information. The endnotes are found at the end of the presentation. 2

3 New Gold investment thesis Portfolio of assets in top-rated jurisdictions Invested and experienced team Among lowest-cost producers with established track record Peer-leading growth pipeline A history of value creation 18.5 Moz gold Reserves (1) ~$100 million investment by Board & Management H1 14 all-in sustaining costs (2) of $707/oz ~900 Koz annual production potential from growth projects (3) +235% increase in share price since March For a detailed breakdown of Mineral Resources and Reserves by category and the effective dates of estimates, refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, 2014 and the news release New Gold Announces 24% Increase in New Afton C-Zone Measured and Indicated Mineral Resources dated July 7, 2014 available at Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral 1. Reserves For a detailed and Mineral breakdown Resources of Mineral and Resources Technical and Information. Reserves by category, refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, Refer Refer to Endnote to Endnotes on all-in under sustaining the heading costs Cautionary under the heading note to U.S. Non-GAAP readers Measures. concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 3. Based 2. Refer on ~325Koz to Endnote annual on production all-in sustaining from Rainy costs under River, the ~485Koz heading annual Non-GAAP production Measures. from Blackwater and ~90Koz annual production from El Morro, as outlined in Feasibility Study of the Rainy River Project, Ontario, Canada dated February 14, 2014, Technical 3. Based Report on on ~325Koz Feasibility annual Study production Blackwater from Gold Rainy Project, River, British ~485Koz Columbia annual dated production January from 14, Blackwater 2014, and and Technical ~90Koz Report annual on production the El Morro from Project, El Morro, Region as outlined III, Chile, in the dated feasibility March studies 23, 2012, for the all available projects. on 3

4 Portfolio of assets in top-rated jurisdictions All Assets Ranked in Top 5 Global Mining Jurisdictions (1) Mineral Reserves (2) # 1 CANADA Blackwater New Afton Rainy River Mine Life: 17 years Mine Life: 10 years Mine Life: 14 years Gold 18.5 Moz # 3 UNITED STATES Mesquite Mine Life: 8+ years # 5 MEXICO Cerro San Pedro Mine Life: 1+ years Silver 90.1 Moz # 4 CHILE El Morro Mine Life: 17 years # 2 AUSTRALIA Peak Mines Mine Life: 6+ years Copper 3.0 Blbs OPERATING DEVELOPMENT 1. Based on 2014 Behre Dolbear Report 2014 Ranking of Countries for Mining Investment. 2. For a detailed breakdown of Mineral Resources and Reserves by category and the effective dates of estimates, refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, 2014 and the news release New Gold Announces 24% Increase in New Afton C-Zone Measured and Indicated Mineral Resources dated July 7, 2014 available at Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 4

5 Experienced and invested team Approximately 1 million shares purchased by insiders year-to-date EXECUTIVE MANAGEMENT TEAM Randall Oliphant Executive Chairman Robert Gallagher President & Chief Executive Officer Brian Penny Executive Vice President & Chief Financial Officer ~$100 million Collectively invested in New Gold BOARD OF DIRECTORS David Emerson Former Canadian Cabinet Minister James Estey Former President, UBS Securities Canada Robert Gallagher President & Chief Executive Officer Vahan Kololian Founder, TerraNova Partners Martyn Konig Former Executive Chairman, European Goldfields Pierre Lassonde Chairman, Franco-Nevada Randall Oliphant Executive Chairman Raymond Threlkeld Chairman, Newmarket Gold 5

6 Strong first half 2014 performance GOLD PRODUCTION (Koz) TOTAL CASH COSTS (1) ($/oz) 181 H Guidance $253 H $320 $ Guidance SILVER PRODUCTION (Koz) ALL-IN SUSTAINING COSTS (2) ($/oz) 835 H ,350 1, Guidance $707 H $815 $ Guidance COPPER PRODUCTION (Mlbs) 51 H Guidance New Gold is pleased to reiterate its 2014 guidance for both production and costs 1. Refer to Endnote on total cash costs under the heading Non-GAAP Measures. 2. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. 6

7 Low cost producer Lower costs driving higher margins (1) 2014 FIRST HALF ALL-IN SUSTAINING COSTS ($/oz) (2) $1,287 Peer-leading all-in sustaining costs (2) in first half 2014 $980 $988 $1,032 $1, E all-in sustaining costs (2) expected to decrease by over $70 per ounce versus 2013 $707 $809 $840 $844 $849 $874 Costs benefiting from depreciating Canadian and Australian dollars Expect to generate ~$200 per ounce incremental margin versus average of peer companies 2014E FULL-YEAR ALL-IN SUSTAINING COSTS ($/oz) (2) $1,125 $1,135 $1,150 $975 $980 $990 $1,000 $950 $950 $825 $ Refer to Endnote on total cash costs under the heading Non-GAAP Measures. 2. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. The above information with respect to all-in sustaining costs of other companies was derived from public disclosure documents prepared by such companies. Such information 7 may not be comparable to New Gold s all-in sustaining costs and New Gold does not take responsibility for the accuracy of other companies information presented herein nor as to its reliability for comparison purposes

8 Strong balance sheet Cash and Equivalents (1) Undrawn Credit Facility (2) Liquidity Position $414 mm $256 mm $670 mm Face value $886 million in long-term debt (3) Face value $300 million, 7.00% notes due in 2020 Face value $500 million, 6.25% notes due in 2022 $86 million in carried El Morro loan, payable out of El Morro project cash flow New $300 million revolving credit facility closed in August 2014 ~$44 million in letters of credit ~$250 million in available liquidity 4 year term 1. Cash and equivalents as at June 30, $44 million of total $300 million at August 14, 2014 used for Letters of Credit. 8

9 Summary of debt Undrawn Credit Facility Senior Unsecured Notes (April 2012) Senior Unsecured Notes (November 2012) El Morro Funding Loan Face Value $300 million (1) $300 million $500 million $86 million Maturity 4 years with annual extensions permitted April 15, 2020 November 15, 2022 n/a Interest Rate See Key features 7.00% 6.25% 4.58% Payable Revolving credit Semi-annually Semi-annually Upon start of production Conversion price n/a n/a n/a n/a Current trading value n/a ~107 ~105 n/a Key features Normal financial covenants Interest Rate % over LIBOR based on ratios Standby fee of % Senior unsecured Redeemable after April 15, 2016 at par plus half coupon, declining ratably to par Senior unsecured Redeemable after November 15, 2017 at par plus half coupon, declining ratably to par New Gold to repay Goldcorp out of 80% of its 30% share of cash flow once El Morro starts production 1. $44 million of total $300 million at August 14, 2014 used for Letters of Credit. 9

10 Strong financial position REVENUE AND ADJUSTED EBITDA (1) ($MM) CASH POSITION ($MM) $900 $800 $700 $600 $500 $400 $300 $200 $100 Revenue Adjusted EBITDA $530 $324 $696 $791 $780 $700 $600 $500 $400 $300 $200 $100 Cash $262 $491 $309 $688 $414 $414 $ $ Q2/14 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 2.0x 14% Total Debt/Adjusted EBITDA Total Debt/Total Capitalization TOTAL DEBT METRICS (3) 18% 0.9x 11% 0.6x 2.1x 20% 2.7x 20% 30% 25% 20% 15% 10% 5% Strong credit metrics and cash position Continued growth in revenue and EBITDA LTM EBITDA/Interest ratio of 5.9x Debt (3) /LTM EBITDA (1) ratio of 2.6x Net Debt (2) /LTM EBITDA (1) ratio of 1.3x 0.0x % 1. Refer to Endnotes on EBITDA under the heading Non-GAAP Measures. 2. Cash and equivalents and net debt as at June 30, Total debt excludes El Morro. 10

11 New Afton Unlocking options CURRENT PERFORMANCE NEAR-TERM GROWTH FUTURE POTENTIAL Gold (Koz) +23% E Mid-2015: Mill expansion to be completed Mill Expansion Capital $45 million C-zone provides potential to extend mine life Mineral Resource updated in July 2014 Copper (Mlbs) % E Production Outperforming 2009 Technical Report Estimates H1 14 Operating Margin (1) $134 million ~12% anticipated increase in throughput ~2-3% anticipated increase in gold and copper recoveries +10 Koz per year gold (2) +10 Mlbs per year copper (2) Expected to increase annual cash flow by ~$30 million (4) C-zone M&I Resource (3) 35 Million Tonnes GOLD 0.77 g/t 0.9Moz COPPER 0.87% 0.7Blbs 4 drills actively exploring 1. Operating margin calculated as revenue less operating expenses. 2. Based on targeted increases in throughput and recovery and year-end 2013 gold and copper reserve grade. 3. Mineral Resources are inclusive of Reserves. For detailed assumptions, risks and parameters relating to the above and the effective dates of estimates refer to New Gold s Annual Information Form dated March 28, Refer also to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. For a detailed breakdown of Mineral Resources and Reserves by category and the effective dates of estimates, refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, 2014 and the news release New Gold Announces 24% Increase in New Afton C-Zone Measured and Indicated Mineral Resources dated July 7, 2014 available at Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 4. $1255/oz gold, $19.05/oz silver, $3.10/lb copper, USD/CAD

12 New Afton C-zone potential Mineralized Intercept Includes Intercept Diamond Drill Hole Trace Central Pierce Point Main B-Zone Block Cave Reserve 2014 MID-YEAR C-ZONE MINERAL RESOURCE ESTIMATE (1) Tonnes (000s) Gold (g/t) Copper (%) Gold (Koz) Copper (Mlbs) Measured Indicated 33, Total M&I 34, Inferred 7, YEAR-END B-ZONE MINERAL RESOURCE ESTIMATE (1) Total M&I 68, ,425 1,368 EA-128 EA-121 EA-132 EA-125 EA-127 EA-123 EA-118 EA-133 EA-126 EA-130 EA-114 EA-117 EA-124A EA-115 EA-122 EA-119 EA-116 EA-120 EA-129A EA-131 C-Zone June 2014 Resource Shell HIGHLIGHTS POST 2014 MID-YEAR MINERAL RESOURCE ESTIMATE (1) Drill Hole From (m) To (m) Interval (m) Estimated true width (m) Gold (g/t) Copper (%) EA includes EA includes EA includes m 400m EA-129A includes EA includes For a detailed breakdown of Mineral Resources and Reserves by category and the effective dates of estimates, refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, 2014 and the news release New Gold Announces 24% Increase in New Afton C-Zone Measured and Indicated Mineral Resources dated July 7, 2014 available at Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 12

13 Mesquite 2014 guidance GOLD PRODUCTION (Koz) OVERVIEW Production increase driven by planned mining of higher grades versus 2013 Increase in costs attributable to increase in total tonnes mined Peak year for sustaining capital at Mesquite TOTAL CASH COSTS (1) ($/oz) $930 $950 ALL-IN SUSTAINING COSTS (2) ($/oz) $1,310 $1,330 KEY ASSUMPTIONS AND SENSITIVITIES Diesel comprises ~25% of Mesquite s total costs Rack diesel price most correlated to Brent oil price Diesel price - $3.25 per gallon Every $0.25 per gallon change in diesel price has ~$15 per ounce impact on total cash costs 1. Refer to Endnote on total cash costs under the heading Non-GAAP Measures. 2. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. 13

14 Peak Mines 2014 guidance GOLD PRODUCTION (Koz) COPPER PRODUCTION (Mlbs) OVERVIEW Gold production in line with 2013 Increase in copper production a result of increased copper grade and recovery Decrease in total cash costs a result of increased copper by-product revenue, depreciating Australian dollar and increased productivity through lower turnover TOTAL CASH COSTS (1) ($/oz) $630 $650 ALL-IN SUSTAINING COSTS (2) ($/oz) $1,065 $1,085 KEY ASSUMPTIONS AND SENSITIVITIES Copper price - $3.25 per pound (2013A - $3.29 per pound) Australian dollar: U.S. dollar exchange $1.14 $0.25 per pound change in copper equals ~$40 per ounce change in Peak Mines total cash costs $0.01 change in Australian dollar equals ~$10 per ounce change in Peak Mines total cash costs 1. Refer to Endnote on total cash costs under the heading Non-GAAP Measures. 2. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. 14

15 Cerro San Pedro 2014 guidance GOLD PRODUCTION (Koz) SILVER PRODUCTION (Moz) OVERVIEW Decrease in production reflects the increased strip ratio for Phase 5 pushback and mining of lower grade ore Increase in costs primarily driven by lower gold production, lower silver byproduct revenue and increased volume of processing reagents TOTAL CASH COSTS (1) ($/oz) $1,030 $1,050 ALL-IN SUSTAINING COSTS (2) ($/oz) $1,125 $1,145 KEY ASSUMPTIONS AND SENSITIVITIES Silver price - $20.00 per ounce (2013A $23.61 per ounce) Mexican peso: U.S. dollar exchange $13.00 $1.00 per ounce change in silver equals ~$15 per ounce change in Cerro San Pedro total cash costs $1.00 change in Mexican peso equals ~$50 per ounce change in Cerro San Pedro total cash costs 1. Refer to Endnote on total cash costs under the heading Non-GAAP Measures. 2. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. 15

16 Rainy River Project overview JURISDICTION MANAGEABLE CAPITAL RESOURCE SCALE AND POTENTIAL Country Ranking (1) # 1 Ontario, Canada 17km tie-in to power/ close to regional infrastructure $885 million at $0.95 US$/C$ exchange rate ~70% of capital denominated in Canadian dollars Reserves (2) +3.8 Moz M&I Resources (2) +6.2 Moz Land Package +169 km 2 FIRST NINE YEARS GRADE, PRODUCTION, COSTS (5) Average Head Grade Average Annual Production Average Total Cash Costs (3) Average All-in Sustaining Costs (4) 1.44 g/t ~325 Koz $613/oz $736/oz $0.05 change in exchange rate ~$141 million in pre-tax NAV 1. Based on 2014 Behre Dolbear Report 2014 Ranking of Countries for Mining Investment. 2. Mineral Resources are inclusive of Reserves. For a detailed breakdown of Mineral Resources and Reserves by category and the effective date of estimates, refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, 2014 available at Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 3. Refer to Endnote on total cash costs under the heading Non-GAAP Measures. 4. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. 5. Feasibility Study of the Rainy River Project, Ontario, Canada dated February 14, 2014, available at 16

17 Rainy River Progress milestones Targeted milestones Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Complete Feasibility Study Submit Environmental Assessment Report Order Long Lead Equipment Award EPCM Contract Detailed Engineering & Procurement Provincial Environmental Assessment Approval Federal Environmental Assessment Approval Delivery of Mobile Equipment Power Line Construction Process Plant Construction Tailings & Water Management Facilities Construction Commence Pre-Strip & Pit Development Commissioning 2017 First full year of production 1. Near-term milestones based on company plans which are consistent with timelines presented in the Rainy River Technical Report, entitled Feasibility Study of the Rainy River Project, Ontario, Canada dated February 14, 2014 and available at 17

18 Rainy River Progress update Project Development Capital Costs Description Cost ($ million) Direct Costs Process Equipment $127 Process Facilities Construction $170 Site Development $111 Open Pit Mine Equipment $81 Overburden and Waste Stripping $80 43% of pricing locked in 98% of pricing locked in Tailings and Water Management $48 Power Line and Roads $21 Total Direct Capital Costs $638 Owner's and Indirect Costs Owner's Costs $76 EPCM $48 Other Indirects $53 AMEC engaged as EPCM partner Total Owner's & Indirect Capital Costs $177 Subtotal $815 Contingency $70 Total Project (at US$/C$ ) $885 ~70% of capital costs denominated in Canadian dollars 1. Project development capital costs based on Rainy River Technical Report, entitled Feasibility Study of the Rainy River Project, Ontario, Canada dated February 14, 2014 and available at 18

19 Rainy River Potential Value creation through development Development of Rainy River presents opportunity for $1.0 - $1.4 billion of potential value creation INVESTMENT VALUE POTENTIAL Acquisition cost 50 % / Cash 50 % Shares $ 300 million Average annual after-tax cash flow (2)(4) $ 215 million Development capital estimate (1) $ 885 million Potential cash flow multiple range (3) x Total investment $ 1.2 billion Implied value potential $ 2.2- $ 2.6 billion 1. Based on $0.95 US$/C$ foreign exchange rate. 2. Based on first five years at $1,300 per ounce gold, $22 per ounce silver and $0.95 US$/C$ foreign exchange rate. 3. Potential multiple range based on New Gold s current P/2014E CFPS multiple. 4. Based on the Technical Report on Feasibility Study for the Rainy River Project dated February 14, 2014, and available at 19

20 Blackwater Jurisdiction Country Ranking (1) # 1 GOLD RESOURCE British Columbia, Canada Significant Gold Resource BLACKWATER ~$1,865 million Development Capital (2) $555/oz Total Cash Costs (3) Feasibility Study (6) First nine years: 485 Koz Annual Production $685/oz All-in Sustaining Costs (4) $0.05 change in exchange rate ~$270 million in pre-tax NAV Regional Upside UPSIDE 8.2 Moz Reserves (5) 9.5 Moz M&I Resources (5) ~1,100 km 2 Land Package 17-year Mine Life Indicated Resource (5) at Capoose Multiple newly identified targets 1. Based on 2014 Behre Dolbear Report 2014 Ranking of Countries for Mining Investment. 2. Development capital assumes $0.95 USD/CDN exchange rate. 3. Refer to Endnote on total cash costs under the heading Non-GAAP Measures. Total cash costs assume: Gold - $1,300/oz, Silver - $22.00/oz, USD/CDN - $ Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. All-in sustaining costs assume: Gold - $1,300/oz, Silver - $22.00/oz, USD/CDN - $ Mineral Resources are inclusive of Reserves. For a detailed breakdown of Mineral Resources and Reserves by category and the effective dates of estimates, refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, 2014 available at Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 6. Based on the Technical Report on Feasibility Study Blackwater Gold Project, British Columbia dated January 14, 2014, available on 20

21 Blackwater Potential Value creation through development Development of Blackwater presents opportunity for $1.3 - $2.0 billion of potential value creation INVESTMENT VALUE POTENTIAL Acquisition cost 100 % Shares $ 630 million Average annual after-tax cash flow (2)(4) $ 375 million Development capital estimate (1) $ 1,865 million Potential cash flow multiple range (3) x Total investment $ 2.5 billion Implied value potential $ 3.8- $ 4.5 billion 1. Based on $0.95 US$/C$ foreign exchange rate. 2. Based on first five years at $1,300 per ounce gold, $22 per ounce silver and $0.95 US$/C$ foreign exchange rate. 3. Potential multiple range based on New Gold s current P/2014E CFPS multiple. 4. Based on the Technical Report on Feasibility Study for the Blackwater Project dated January 22, 2014 and available at 21

22 El Morro Jurisdiction 2011 Feasibility Study (30%) (4) Life of mine: Chile 90 Koz Annual Gold Production Country Ranking (1) # 4 85 Mlbs Annual Copper Production ($700/oz) Total Cash Costs (2) EL MORRO Gold/Copper Reserve & Resources (30%) Unique Joint Venture Reserves (3) Open Pit g/t Gold % Copper Inferred Resources (3) Potential Block Cave g/t Gold % Copper Goldcorp 70% partner Funds 100% of capital New Gold retains portion of cash flow from mine start-up 1. Based on 2014 Behre Dolbear Report 2014 Ranking of Countries for Mining Investment. 2. Refer to Endnote on total cash costs under the heading Non-GAAP Measures. Total cash costs assume: Gold - $1,200/oz, Copper - $2.75/lb, Chilean Peso/USD - $ For a detailed breakdown of Mineral Resources and Reserves by category and the effective date of estimates refer to New Gold s Annual Information Form for the financial year ended December 31, 2013 dated March 28, 2014 available at Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 4. Based on echnical Report on the El Morro Project, Region III, Chile, dated March 23, 2012, available at 22

23 El Morro (30%) Funding structure Total Capital 100% Average 100% annual ~ $3.9 billion (1) cash flow 30% 70% Funded by ~ $1.2 billion interest at 4.58% ~ $2.7 billion 30% 70% 20% 80% Carried funding repayment New Gold s 30% share of development capital 100% carried Interest fixed at 4.58% Debt fully ring-fenced 1. Capital estimates based on December 2011 Feasibility Study for the El Morro Project available at 23

24 GOLD PRODUCTION Organic pipeline Existing low cost production base expected to be further enhanced by our lower cost development projects (1) 2017 (3) Sequence Blackwater development El Morro advanced Future Potential (4) 2014 (2) Mesquite return to run rate (2015+) New Afton mill expansion (mid-2015) Rainy River development (2015/2016) CSP to residual leaching (2016) 1. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. Rainy River and Blackwater life-of-mine all-in sustaining costs are estimated to be $736/oz and $685/oz, respectively, based on their respective Feasibility Studies. 2. Based on mid-point of 2014 guidance. 3. Based on expected annual production from current operations according to their respective mine plans, including positive production impact of New Afton s mill expansion targeted for mid-2015, Mesquite mine plan moving into grades more in line with reserve grade, which is partially offset by Cerro San Pedro ceasing active mining and moving into residual leaching, and includes the first year of full production from Rainy River. Assumes on-time completion of Rainy River. 4. Based on ~325Koz annual production from Rainy River, ~485Koz annual production from Blackwater and ~90Koz annual production from El Morro as outlined in the Technical Reports for these projects available at and production contribution from New Afton, Mesquite and the Peak Mines according to their respective mine plans. Assumes the timely development of Blackwater and El Morro. 24

25 Potential Cash flow growth and value ESTIMATED NET CASH FROM OPERATIONS ($ MILLIONS) ~$600 $3.5 billion Enterprise Value ~$400 ~$400 $0.7 billion $230 $236 $249 $302 Consensus Blackwater and El Morro Value (4) $79 $183 $2.8 billion Enterprise Value (excluding Blackwater and El Morro) (1) (2) (3) (3) (3) E 2015E 2016E 2017E Trading at ~4.7x 2017E cash flow at 2014 guidance prices 1. For 2013, figure shown is Adjusted net cash generated from operations. Net cash generated from operations in the 2013 period included certain non-recurring cash flows. Net cash generated from operations in 2013 was $172 million E based on Bloomberg consensus CFPS of $0.60 multiplied by 504 million basic shares outstanding to 2017 estimates based on the following price and exchange rate assumptions (which were also used for 2014 guidance): Gold - $1,300/oz, Silver - $22.00/oz, Copper - $3.25/lb, USD/CDN - $0.90, USD/AUD - $ estimated cash flow assumes: successful mill expansion to 14,000 tonnes per day at New Afton in mid-2015, Mesquite moving into mining of higher grade areas of the open pit in 2015 in accordance with the current mine plan, Peak s copper production increasing from 2014 levels in accordance with the current mine plan, and Cerro San Pedro mining higher grade material in its final year of active mining in accordance with the current mine plan estimated cash flow assumes: New Afton processing for a full year at 14,000 tonnes per day, Mesquite remaining in higher grade areas in accordance with the current mine plan, Peak further increasing its copper production in accordance with the current mine plan, and Cerro San Pedro moving into its first year of residual leaching in accordance with the current mine plan estimated cash flow assumes: Rainy River commercial production is achieved on schedule and Rainy River has its first full year of production in 2017 with a production level consistent with the project s feasibility study, New Afton processing 14,000 tonnes per day, Mesquite remaining in higher grade areas in accordance with the current mine plan, Peak further increasing its copper production in accordance with the current mine plan, and Cerro San Pedro continuing its residual leaching in accordance with the current mine plan. Assumes no non-recurring cash flows in 2014, 2015, 2016 and Based on the average of the estimates by research analysts for the net asset values of the Blackwater and El Morro assets. 25

26 Catalysts 2014 costs declining versus 2013 New Afton production and cash flow continues to increase New Afton C-zone exploration Rainy River regional exploration Blackwater regional exploration Rainy River permitting Blackwater permitting C-zone engineering study New Afton mill expansion Cash flow growth 26

27 New Gold investment thesis Establishing the leading intermediate gold company Peer-leading growth pipeline A history of value creation Among lowest-cost producers with established track record Invested and experienced team Portfolio of assets in top-rated jurisdictions 27

28 Endnotes CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MINERAL RESERVES AND MINERAL RESOURCES Information concerning the properties and operations of New Gold has been prepared in accordance with Canadian standards under applicable Canadian securities laws, and may not be comparable to similar information for United States companies. The terms Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource and Inferred Mineral Resource used in this Report are Canadian mining terms as defined in the Canadian Institute of Mining, Metallurgy and Petroleum ( CIM ) Definition Standards for Mineral Resources and Mineral Reserves adopted by CIM Council on November 27, 2010 and incorporated by reference in National Instrument ( NI ). While the terms Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource and Inferred Mineral Resource are recognized and required by Canadian securities regulations, they are not defined terms under standards of the United States Securities and Exchange Commission. As such, certain information contained in this Report concerning descriptions of mineralization and resources under Canadian standards is not comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the United States Securities and Exchange Commission. An Inferred Mineral Resource has a greater amount of uncertainty as to its existence and as to its economic and legal feasibility. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility of pre-feasibility studies. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher confidence category. Readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable. Under United States standards, mineralization may not be classified as a Reserve unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the Reserve estimation is made. Readers are cautioned not to assume that all or any part of the Measured or Indicated Mineral Resources that are not Mineral Reserves will ever be converted into Mineral Reserves. In addition, the definitions of Proven Mineral Reserves and Probable Mineral Reserves under CIM standards differ in certain respects from the standards of the United States Securities and Exchange Commission. TECHNICAL INFORMATION The scientific and technical information in this presentation has been reviewed and approved by Mark A. Petersen, Vice President, Exploration of New Gold. Mr. Petersen is an AIPG Certified Professional Geologist and a qualified person under National Instrument NON-GAAP MEASURES (1) TOTAL CASH COSTS Total cash costs per ounce figures are non-gaap measures which are calculated in accordance with a standard developed by The Gold Institute, a worldwide association of suppliers of gold and gold products that ceased operations in Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. New Gold reports total cash costs on a sales basis. Total cash costs include mine site operating costs such as mining, processing, administration, royalties and production taxes, but are exclusive of amortization, reclamation, capital and exploration costs. Total cash costs are reduced by any by-product revenue and then divided by ounces of gold sold to arrive at a per ounce figure. Co-product cash costs are calculated based on total cash costs, prior to any reduction for by-product revenue, being apportioned to each metal produced on a percentage of revenue basis and subsequently divided by ounces of gold or silver sold or pounds of copper sold to arrive at per ounce or per pound figures. These measures, along with sales, are considered to be a key indicator of a company s ability to generate operating earnings and cash flow from its mining operations. This data is furnished to provide additional information and is a non-gaap measure. Total cash costs and co-product cash costs presented do not have a standardized meaning under GAAP and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and is not necessarily indicative of operating costs presented under GAAP. Further details regarding our non-gaap measures and a reconciliation to the nearest GAAP measures are provided in our MD&A s accompanying our financial statements filed from time to time on (2) ALL-IN SUSTAINING COSTS Consistent with guidance announced in 2013 by the World Gold Council, an association of various gold mining companies from around the world of which New Gold is a member, New Gold defines all-in sustaining costs per ounce as the sum of total cash costs, sustaining capital expenditures, corporate general and administrative costs, capitalized and expensed exploration that is sustaining in nature and environmental reclamation costs, all divided by the ounces of gold sold to arrive at a per ounce figure. New Gold believes this non-gaap measure provides further transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the company in assessing the company s expected operating performance, ability to generate free cash flow and its overall value. This data is furnished to provide additional information and is a non-gaap measure. All-in sustaining costs presented do not have a standardized meaning under GAAP and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and is not necessarily indicative of operating costs presented under GAAP. Further details regarding our non-gaap measures and a reconciliation to the nearest GAAP measures are provided in our MD&A s accompanying our financial statements filed from time to time on (3) EBITDA EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) is a common financial performance measure but with no standard meaning under IFRS. This measure is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. 28

29 Contact information Martin Wallace Treasurer