A Canadian Focused Gold Producer

Transcription

1 A Canadian Focused Gold Producer CORPORATE PRESENTATION Denver Gold Forum September

2 Cautionary statements ALL AMOUNTS IN U.S. DOLLARS 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, results, outcomes 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, 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 statements with respect to: guidance for production and costs, and the factors contributing to those expected results, including mill throughput, metal recoveries and ore grade, as well as expected capital and other expenditures; planned development activities and timing for 2018 and future years and the expected time of closing for the Mesquite Mine transaction. 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 such forward-looking statements are discussed in this presentation, New Gold s latest annual management s discussion and analysis ( MD&A ), Annual Information Form and Technical Reports filed at and on EDGAR 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 significant 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 mineral resource estimates; (4) the exchange rate between the Canadian dollar and U.S. dollar, and to a lesser extent, the Mexican Peso, 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) equipment, labour and materials costs increasing on a basis consistent with New Gold s current expectations; (7) arrangements with First Nations and other Aboriginal groups in respect of the Rainy River mine and Blackwater project being consistent with New Gold s current expectations; (8) all required permits, licenses and authorizations being obtained from the relevant governments and other relevant stakeholders within the expected timelines and the absence of material negative comments during the applicable regulatory processes; and (9) in the case of production, cost and expenditure outlooks at the operating mines for 2018, commodity prices, exchange rates, grades, recovery rates, mill availability and mill throughput rates being consistent with those estimated for the purposes for 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 and the availability and management of capital resources; additional funding requirements; price volatility in the spot and forward markets for metals and other commodities; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States and, to a lesser extent, Mexico; discrepancies between actual and estimated production, between actual and estimated mineral reserves and mineral resources and between actual and estimated metallurgical recoveries; risks related to early production at the Rainy River Mine, including failure of equipment, machinery, the process circuit or other processes to perform as designed or intended; fluctuation in treatment and refining charges; changes in national and local government legislation in Canada, the United States and, to a lesser extent, Mexico 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, 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 mineral reserves and mineral resources; competition; loss of key employees; rising costs of labour, supplies, fuel and equipment; actual results of current exploration or reclamation activities; uncertainties inherent to mining economic studies; 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 Indigenous groups; 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 risks associated with the start of production of a mine, such as Rainy River, (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 Annual Information Form, MD&A and other disclosure documents filed on and available at and on EDGAR 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 forward-looking statements contained in this news release 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. 2

3 New Gold Canadian Focused Gold Producer BLACKWATER PROJECT GOLD PROJECT NEW AFTON MINE GOLD/COPPER PRODUCER MESQUITE MINE GOLD PRODUCER CERRO SAN PEDRO MINE GOLD/SILVER PRODUCER RESIDUAL LEACH RAINY RIVER MINE GOLD PRODUCER Rainy River Mine: Ontario, Canada Open pit / Underground Mine Avg. annual production of 340koz (first 9 years) New Afton Mine: B.C., Canada Block cave operation Low cost producer drives free cash flow Significant copper exposure Blackwater Project: B.C., Canada Potential gold production of +450k oz. over 14 years Mesquite Mine: California, USA Announced Definitive Sale Agreement with Equinox for US$158M Cerro San Pedro, Mexico Residual leaching ongoing ~13.5 million ounces of gold reserves in Canada 3

4 Recent Highlights Appointed Renaud Adams as President and CEO (Sept 12, 2018) Experienced mining executive with a solid track record Announced sale of Mesquite Mine for US$158M Strengthens liquidity and enhances financial flexibility Focused on optimizing performance at Rainy River Launching a disciplined strategy to address start-up challenges Optimizing New Afton B3 and C-zone development scenarios Decision expected in late 2018 to potentially advance development in early 2019 Blackwater trade-off study underway; Environmental Assessment approval expected in Guidance (1) 2018 Capital Expenditures by Category Category Gold Production (thousand ounces) Copper Production (million pounds) Sustaining Capital ($million) Operating Expense (1) ($ per gold ounce) Growth Capital ($million) Operating Expense ($ per copper pound) Total Capital Expenditures ($million) Rainy River $210 $35 $245 New Afton $40 $5 $45 Mesquite $10 $10 Blackwater $10 $10 All-in Sustaining Costs (2) ($ per gold ounce) Rainy River $730 - $770 $1,600 - $1,700 New Afton $455 - $495 $ $1.30 ($1,020) - ($980) Mesquite $890 - $930 $1,005 - $1,045 CSP $1,960 - $2,000 $2,000 - $2,140 Total $655 - $695 $ $1.55 $1,080 - $1,120 Total $260 $50 $ Gold operating expense from continuing operations. 2. Refer to endnote on all-in sustaining costs. 4

5 Rainy River Mine: Ontario, Canada Open Pit / Underground mine in Canada Production and Costs H1/2018 Results 2018 Guidance (1) Gold Production (Koz) Operating expense per oz. $993 $730-$770 AISC per oz. (2) $1,794 $1,600-$1,700 Capital ($M) H1/2018 Results 2018 Guidance (1) Sustaining Capital $73 $210 Growth Capital $21 $35 Mineral Reserves and Resources (June 30, 2018) (3) Grade (g/t) Gold (Koz) Proven & Probable ,220 65km from Fort Frances, Ontario Mine life of 14 years Measured & Indicated (4) ,142 Inferred NI Technical Report Highlights (first 9 years) Average annual gold production of 340,000 ounces; LOM 280,000 ounces AISC (2) of $1,016 per ounce LOM gold grade of 1.09 g/t (including stockpile) Incorporating underground production in Guidance assumes a gold and silver price of $1,300 per ounce and $16.00 per ounce respectively and a Canadian dollar exchange rate of $1.30 to the U.S. dollar 2. Refer to endnote on all-in sustaining costs. 3. Please refer to information contained in Appendix 3 and the Technical Report dated July 25, Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 4. Resources are exclusive of Reserves. 5

6 Rainy River Mine: The Path Forward Short-term Operating Plan for Rainy River Enhancing the technical and operational capacity Driving a culture of continuous improvement throughout the operation Focusing on optimizing mine practices and grade control Addressing mill availability and improving gold recoveries Evaluating all key cost drivers and optimizing capital allocation Reserve Pit Optimization of underground scenarios Evaluating near-term exploration potential Underground Reserves and Infrastructure Implementing a disciplined and focused strategy to drive optimized operational and cost performance 6

7 New Afton Mine: B.C., Canada Production and Costs H1/2018 Results 2018 Guidance (1) Gold Production (Koz) Operating expense/au oz. $410 $455-$495 Copper Production (Mlbs) Operating expense/cu lb. $0.98 $1.10-$1.30 AISC per oz. (2) ($1,118) ($1,020)-($980) Capital ($M) H1/2018 Results 2018 Guidance (1) Sustaining Capital Growth Capital 1 5 Mineral Reserves and Resources Gold Grade (g/t) Gold (Koz) (December 31, 2017) (3) Low cost operation in B.C., 10km from Kamloops Underground block caving operation Mine life extension with C-zone currently under review; late 2018 decision Evaluating near-term exploration potential Proven & Probable ,078 Measured & Indicated (4) ,170 Inferred Mineral Reserves and Resources Copper Grade (%) Copper Mlbs. (December 31, 2017) (4) Proven & Probable Measured & Indicated (4) Inferred Low cost production drives solid free cash flow 1. Guidance assumes a gold and copper price of $1,300 and $3.00, respectively, and a Canadian dollar exchange rate of $1.30 to the U.S. dollar 2. Refer to endnote on all-in sustaining costs. 3. For a detailed breakdown of Mineral Resources and Reserves by category, refer to New Annual Information Form dated March 29, Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 4. Resources are exclusive of Reserves. 7

8 Blackwater Project: B.C., Canada Open pit mine in B.C., 160km southwest of Prince George Currently re-evaluating project sizing and options Current reserve is defined at 8.2M gold oz with a grade of 0.74 g/t Mineral Reserves and Resources Gold Grade (g/t) Gold (Koz) (December 31, 2017) (1) Proven & Probable ,170 Measured & Indicated (2) ,402 Inferred Mineral Reserves and Resources Silver Grade (g/t) Silver (Koz) (December 31, 2017) (1) Proven & Probable ,800 Measured & Indicated (2) 4.5 8,915 Inferred 3.9 2,267 Open pit conventional truck and shovel Site area is well serviced Open pit mining activity is present in the province of B.C. Environmental Assessment approval expected in 2019 Potential gold production of +450koz over 14 years 1. For further information, refer to Appendix 3 and the Annual Information Form dated March 29, For a detailed breakdown of Mineral Resources and Reserves by category, refer to New Annual Information Form dated March 29, Refer to Endnotes under the heading Cautionary note to U.S. readers concerning estimates of Mineral Reserves and Mineral Resources and Technical Information. 2. Resources are exclusive of Reserves. 8

9 Blackwater Project: B.C., Canada Multiple options to unlock value Internal trade-off studies to optimize and enhance project economics Key focus areas include: Reduce project strip ratio Average Analyst Consensus Value ($mm) $1,020 ~80% reduction in Blackwater analyst consensus value Ore sorting Use of updated flowsheet to reduce capital and operating costs Potential phased approach $1, Moz M&I Resource Average Gold Price (C$/oz) (3) Resource Base (4) $200 (1) (2) ~$1, Moz Reserve 1.4 Moz M&I Resource Not Started Environmental Assessment Status Expected in Based on average of 15 research analysts. 2. Based on average of 17 research analysts. 3. Average foreign exchange rates (US$/C$): $0.99, $ M&I resources exclusive of reserves. 9

10 Mesquite Mine: California, USA Equinox Gold Corp. to acquire Mesquite Mine (see Sept. 19, 2018 news release) US$158 million in cash upon close Proceeds will be used to strengthen Production and Costs H1/2018 Results 2018 Guidance (1) Gold Production (Koz) Operating expense per oz. $832 $ AISC per oz. (2) $864 $1,005-$1,045 Capital ($M) H1/2018 Results 2018 Guidance (1) Sustaining Capital Growth Capital - - the balance sheet and enhance overall financial flexibility Equinox to assume all long-term obligations including reclamation Transaction expected to close during the fourth quarter Guidance assumes a gold and silver price of $1,300 per ounce and $16.00 per ounce respectively and a Canadian dollar exchange rate of $1.30 to the U.S. dollar 2. Refer to endnote on all-in sustaining costs. 10

11 Cerro San Pedro Mine: Mexico Transitioned to residual leaching in 2016 Staged closure ongoing Working with local communities and government agencies Production and Costs H1/2018 Results 2018 Guidance (1) Gold Production (Koz) Operating expense per oz. $1,905 $1,960-$2,000 AISC per oz. (2) $2,020 $2,000-$2,140 Reclamation security of approximately $15.6 million in place Site reclamation must be completed within four years of final processing, including residual leaching Objective to ensure we leave a positive legacy for the local communities 1. Guidance assumes a gold and silver price of $1,300 per ounce and $16.00 per ounce respectively and a Canadian dollar exchange rate of $1.30 to the U.S. dollar 2. Refer to endnote on all-in sustaining costs. 11

12 Capital resources and liquidity position $103 million Undrawn credit facility (1) $167 million Cash and cash equivalents (2) $270 million Liquidity Position Q Strengthen the Balance Sheet, Enhance Flexibility In Q2 2018, received the proceeds from the sale of Peak Mines ($55 million). Reduced outstanding balance of credit facility by $50 million. Following the Peak sale, letters of credit associated with Peak Mines reclamation obligations were released, increasing availability under credit facility ($16 million). Mesquite sale expected to close in Q On September 19, 2018, announced the sale of Mesquite Mine for cash proceeds of $158 million. 1. As at June 30, $117 million of $400 million facility used for Letters of Credit and $180 million drawn at June 30, Cash and cash equivalents as at June 30,

13 Capital structure Summary of debt REVOLVING CREDIT FACILITY SENIOR UNSECURED NOTES (November 2012) SENIOR UNSECURED NOTES (May 2017) Face Value $400 million (1) $500 million $300 million Maturity August 14, 2020 November 15, 2022 May 15, 2025 Interest Rate See Key features 6.25% 6.375% Payable Revolving credit Semi-annually Semi-annually Conversion price n/a n/a n/a Current trading value n/a Key features Interest rate spread varies between 1.00%-3.25% based on leverage ratio Current interest rate spread of 3.25% Senior unsecured Currently redeemable at par plus half coupon, declining ratably to par Senior unsecured Redeemable after May 15, 2020 at 104.8% down to 100% of face after 2023 $500 DEBT MATURITY PROFILE (1) $250 $ $ millions No long-term debt maturities for four years 1. As at June 30, 2018; $117 million of $400 million facility used for Letters of Credit and $180 million drawn at June 30,

14 New Gold: The Path Forward Transforming New Gold to be a leading Canadian focused intermediate gold producer Strategic operational plan launched at Rainy River Addressing start-up challenges Enhancing technical capacity at site Optimizing New Afton B3 and C-zone development scenarios Blackwater optionality - trade-off study launched Evaluation of near-term exploration potential at Rainy River and New Afton 14

15 Appendices Corporate 16 Reserves and Resources 21

16 Mine-by-mine operating results Appendix Second Quarter Gold Production (Koz) 108,550 Gold Operating Expense (1) ($/oz) $680 All-in Sustaining Costs (2) ($/oz) $ $2,425 $2, $1,295 $ $802 $412 $848 ($917) 1. Operating expense: Silver - $8.64/oz, Copper - $1.67/lb. 2. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. 3. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. New Afton co-product all-in sustaining costs: Second quarter: Gold - $704/oz, Copper - $1.72/lb. 16

17 Consolidated financial summary Appendix 1 Average Realized Prices (1) Financial Summary Three months ended June 30 Six months ended June 30 GOLD ($/oz) $1,278 1% COPPER ($/lb) $2.56 SILVER ($/oz) $17.22 $1,297 $3.18 $1,277 $2.56 3% 24% 23% $1,312 $3.16 $16.49 $17.37 $16.56 (4%) (5%) (in millions of U.S. dollars, except per share amounts) CONTINUING OPERATIONS Revenues Operating margin (2) Asset impairment, net of tax (Loss) earnings from continuing operations (Loss) earnings from continuing operations per share (basic) (301.6) 17.8 (330.7) 48.8 (0.52) 0.03 (0.57) 0.09 Adjusted (loss) earnings from continuing operations (3) (1.8) 8.9 (17.9) 10.2 Adjusted (loss) earnings per share from continuing operations (3) (0.00) 0.02 (0.03) 0.02 Operating cash flows generated from continuing operations Operating cash flows generated from continuing operations before changes in non-cash operating working capital (4) TOTAL OPERATIONS (includes Peak Mines) Refer to Endnote on average realized prices under the heading Non-GAAP Measures. 2. Refer to Endnote on operating margin under the heading Non-GAAP Measures. Net (loss) earnings (302.0) 23.1 (331.5) 60.7 Net (loss) earnings per share (basic) (0.52) 0.04 (0.57) 0.11 Cash generated from operations Refer to Endnote on adjusted net earnings under the heading Non-GAAP Measures. 4. Refer to Endnote on net cash generated from operations before changes in working capital under the heading Non-GAAP Measures. 17

18 2018 guidance and all-in sustaining costs sensitivities Appendix Guidance Gold Production Copper Production Operating Expense Operating Expense All-in Sustaining Costs (thousand ounces) (million pounds) ($ per gold ounce) ($ per copper pound) ($ per gold ounce) Rainy River $730 - $770 $1,600 - $1,700 New Afton $455 - $495 $ $1.30 ($1,020) - ($980) Mesquite $890 - $930 $1,005 - $1,045 Cerro San Pedro $1,960 - $2,000 $2,000 - $2,140 New Gold Total $655 - $695 $ $1.55 $1,080 - $1, All-in sustaining costs sensitivities CATEGORY COPPER PRICE CDN/USD Base Assumption $3.20 $1.25 Sensitivity +/-$0.10 +/-$0.05 COST PER OUNCE IMPACT Rainy River +/-$40 In light of previously noted copper collars, at prices above $3.37 per pound, or below $3.00 per pound, only approximately 20 million pounds of the Company s estimated copper production would be impacted by further copper price movements, thus significantly reducing the impact on New Afton and consolidated all-in sustaining costs New Afton +/-$135 +/-$100 Mesquite Cerro San Pedro New Gold Total +/-$15 +/-$30 1. Refer to Endnote on all-in sustaining costs under the heading Non-GAAP Measures. 18

19 Commodity price/foreign exchange assumptions Appendix guidance assumptions Spot 2018 Silver price ($/oz) Copper price ($/lb) 3.20 CDN/USD 1.25 MXN/USD SPOT Gold price ($/oz) 1,199 Silver price ($/oz) Copper price ($/lb) 2.82 CDN/USD 1.29 MXN/USD

20 2018 capital expenditures by category Appendix 1 ~$310 million Total Capital Expenditures $10 million Mesquite $40 million $5 million New Afton ~$260 million Sustaining Capital New Afton $10 million Blackwater ~$50 million Growth Capital $35 million $210 million Rainy River Rainy River 20

21 2018 capital expenditures by category (cont d) Appendix 1 Rainy River New Afton Mesquite Blackwater $245 million $45 million $10 million $10 million $210 million tailings construction, capital waste stripping, open pit sustaining capital $35 million underground development $40 million mine development, plant and equipment $5 million C-zone studies $10 million capital components $10 million permitting, environmental assessment approvals and trade-off studies Growth capital Sustaining capital 21

22 Mineral reserves and resources summary Appendix 3 Mineral Reserves and Resources Summary GOLD Koz AS AT DECEMBER 31, 2017 AS AT DECEMBER 31, 2016 SILVER Moz COPPER Mlbs GOLD Koz SILVER Moz COPPER Mlbs Proven and Probable reserves 14, , ,033 Rainy River (1) 4, , New Afton 1, ,161 Mesquite 1,129 1,179 Blackwater 8, , Measured and Indicated resources (exclusive of reserves) 5, , Inferred resources , Rainy River information per Technical Report dated July 25,

23 Mineral reserves statement as at December 31, 2017 Appendix 3 Proven and Probable METAL GRADE CONTAINED METAL Rainy River (1) New Afton Direct processing reserves Low grade reserves Combined P&P A&B Zones C-zone Open Pit Underground Open Pit Stockpile TONNES 000s Proven Probable 28, , Proven Probable 26, , Total New Afton P&P 54, ,078 3, GOLD g/t SILVER g/t COPPER % GOLD Koz SILVER Koz COPPER Mlbs Proven 21, ,739 Probable 50, ,860 5,069 Open Pit P&P (direct processing) 71, ,701 6,807 Proven Probable 8, ,021 2,728 Underground P&P (direct processing) 8, ,021 2,728 Proven 7, Probable 26, ,086 Open Pit P&P (low grade) 34, ,564 Proven 5, Stockpile reserves 5, Proven 34, ,031 2,516 Probable 86, ,189 9,882 Total Rainy River P&P 120, ,220 12, Rainy River information per Technical Report dated July 25,

24 Mineral reserves statement as at December 31, 2017 Appendix 3 Proven and Probable continued METAL GRADE CONTAINED METAL TONNES 000s GOLD g/t SILVER g/t COPPER % GOLD Koz SILVER Koz COPPER Mlbs Mesquite Blackwater Direct processing material Low grade reserves Proven 5, Probable 59, ,040 Total Mesquite P&P 65, ,129 Proven 124, ,790 22,100 Probable 169, ,730 22,300 P&P (direct processing) 294, ,520 44,400 Proven 20, ,300 Probable 30, ,100 P&P (stockpile) 50, ,400 Total Blackwater P&P 344, ,170 60,800 24

25 Mineral reserves statement as at December 31, 2017 Appendix 3 Measured and Indicated (Exclusive of Reserves) METAL GRADE CONTAINED METAL Rainy River (1) New Afton Direct processing resources Low grade resources Combined M&I Open Pit Underground Open Pit TONNES 000s GOLD g/t SILVER g/t COPPER % GOLD Koz SILVER Koz COPPER Mlbs Measured 2, Indicated 26, ,921 Open Pit M&I (direct processing) 29, ,066 3,471 Measured Indicated 7, ,206 Open Pit M&I (direct processing) 7, ,206 Measured 2, Indicated 23, ,713 Open Pit M&I (low grade) 25, ,974 Measured 5, Indicated 57, ,005 6,840 Total Rainy River M&I 63, ,142 7,651 A&B Zones C-zone HW Lens Measured 17, , Indicated 10, A&B Zone M&I 27, , Measured 6, Indicated 11, C-zone M&I 18, , Measured Indicated 11, HW Lens M&I 11, Total New Afton M&I 58, ,170 3, Rainy River information per Technical Report dated July 25,

26 Mineral resources statement as at December 31, 2017 Appendix 3 Measured and Indicated (Exclusive of Reserves) continued METAL GRADE CONTAINED METAL TONNES 000s GOLD g/t SILVER g/t COPPER % GOLD Koz SILVER Koz COPPER Mlbs Mesquite Blackwater Direct processing resources Low grade resources Measured 4, Indicated 75, ,122 Total Mesquite M&I 80, ,181 Measured Indicated 45, ,227 6,866 M&I (direct processing) 45, ,240 6,927 Measured Indicated 15, ,985 M&I (low grade) 15, ,988 Total Blackwater M&I 61, ,402 8,915 26

27 Mineral resources statement as at December 31, 2017 Appendix 3 Inferred METAL GRADE CONTAINED METAL TONNES 000s GOLD g/t SILVER g/t COPPER % GOLD Koz SILVER Koz COPPER Mlbs Rainy River (1) New Afton Direct processing Open Pit 3, Underground 1, Total Direct Processing 4, Low grade material Open Pit 3, Total Rainy River Inferred 8, A&B Zones 7, C-zone 7, HW Lens Total New Afton Inferred 15, Mesquite 8, Blackwater Direct processing 13, ,792 Low grade resources 4, Total Blackwater Inferred 18, , Rainy River information per Technical Report dated July 25,

28 Reserves and resources notes Appendix 3 1. New Gold s Mineral Reserves and Resources have been estimated in accordance with the CIM Standards, which are incorporated by reference in NI All Mineral Resource and Mineral Reserve estimates for New Gold s properties and projects are effective December 31, 2017, except for Rainy River, which is effective July 25, New Gold s year-end 2017 Mineral Reserves and Mineral Resources have been estimated based on the following metal prices and foreign exchange rate criteria: GOLD $/oz SILVER $/oz COPPER $/lb CAD/USD AUD/USD MXN/USD Mineral Reserves $1,275 $17.00 $2.75 $1.30 $1.30 $18.00 Mineral Resources $1,375 $19.00 $3.00 $1.30 $1.30 $ Lower cut-offs for the company s Mineral Reserves and Mineral Resources are outlined in the following table: MINERAL PROPERTY RESERVES LOWER CUT-OFF RESOURCES LOWER CUT-OFF Rainy River New Afton Mesquite Blackwater O/P direct processing: g/t AuEq g/t AuEq O/P low grade material: 0.30 g/t AuEq 0.30 g/t AuEq U/G direct processing: 2.20 g/t AuEg 2.00 g/t AuEq Main Zone B1 & B2 Block: B3 Block & C-Zone: O/P direct processing: O/P low grade material: C$ 17.00/t C$ 24.00/t g/t AuEq 0.32 g/t AuEq All Resources: 0.40% CuEq Oxide & Transitional: 0.14 g/t Au (0.005 oz/t Au) 0.12 g/t Au ( oz/t Au) Sulphide: 0.28 g/t Au (0.012 oz/t Au) 0.25 g/t Au (0.007 oz/t Au) All Resources: 0.40% AuEq 28

29 Reserves and resources notes (cont d) Appendix 3 5. New Gold reports its measured and indicated mineral resources exclusive of mineral reserves. Measured and indicated mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred Mineral Resources have a greater amount of uncertainty as to their existence, economic and legal feasibility, do not have demonstrated economic viability, and are likewise exclusive of mineral reserves. Numbers may not add due to rounding. 6. Mineral Resources are classified as Measured, Indicated and Inferred based on relative levels of confidence in their estimation and on technical and economic parameters consistent with the methods most suitable to their potential commercial exploitation. Where different mining and/or processing methods might be applied to different portions of a Mineral Resource, the designators open pit and underground are used to indicate the envisioned mining method. The designators oxide, non-oxide and sulphide have likewise been applied to indicate the type of mineralization as it relates to the appropriate mineral processing method and expected payable metal recoveries, and the designators direct processing and stockpile have been applied to differentiate material envisioned to be mined and processed directly from material to be mined and stored in a stockpile for future processing. Mineral Reserves and Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing and other risks and relevant issues. Additional details regarding Mineral Reserve and Mineral Resource estimation, classification, reporting parameters, key assumptions and associated risks for each of New Gold s material properties are provided in the respective NI Technical Reports, which are available at 7. Rainy River Project: In addition to the criteria described above, Mineral Reserves and Mineral Resources for the Rainy River project are reported according to the following additional criteria: Underground Mineral Reserves are reported peripheral to and/or below the open pit Mineral Reserve pit shell, which has been designed and optimized based on an $1,275/oz gold price. Underground Mineral Resources are reported below a larger Mineral Resource pit shell, which has been defined based on a $1,375/oz gold price. Approximately forty percent (40%) of the gold metal content defined as underground Mineral Reserves is derived from material located between the Mineral Reserve pit shell and the Mineral Resource pit shell; the remaining sixty percent (60%) of the metal content defined as underground Mineral Reserves is derived from material located below the Mineral Resource pit shell. Open pit Mineral Resources exclude material reported as underground Mineral Reserves. 8. Qualified Person: The preparation of New Gold's Mineral Reserve and Mineral Resource estimates has been done by Qualified Persons as defined under NI , under the oversight and review of Mr. Mark A. Petersen, a Qualified Person under NI

30 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 news release 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 May 10, 2014 and incorporated by reference in National Instrument 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 news release concerning descriptions of mineralization and mineral 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 great 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 or 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 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 relating to the operation of New Gold s operating mines contained herein has been reviewed and approved by Mr. Nicholas Kwong, Director, Business Improvement of New Gold. All other scientific and technical information contained herein has been reviewed and approved by Mr. Mark A. Petersen, Vice President, Exploration of New Gold. Mr. Kwong is a Professional Engineer and a member of the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Petersen is a SME Registered Member and AIPG Certified Professional Geologist. Mr. Kwong and Mr. Petersen are "Qualified Persons" for the purposes of Canadian NI For additional technical information on New Gold s material properties, including a detailed breakdown of Mineral Reserves and Mineral Resources by category, as well as key assumptions, parameters and risks, refer to New Gold s Annual Information Form for the year ended December 31, 2016 filed on NON-GAAP MEASURES (1) ALL-IN SUSTAINING COSTS All-in sustaining costs per ounce is a non-gaap financial measure. 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, capital expenditures that are sustaining in nature (as presented in the cash flow statement), 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 financial measure provides further transparency into costs associated with producing gold and assists analysts, investors and other stakeholders of the Company in assessing the Company s operating performance, its ability to generate free cash flow from current operations and its overall value. This data is furnished to provide additional information and is a non-gaap financial measure. All-in sustaining costs presented do not have a standardized meaning under IFRS 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 IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS. Further details regarding historical all-in sustaining costs and a reconciliation to the nearest IFRS measures are provided in the MD&A accompanying New Gold s financial statements filed from time to time on Sustaining costs is a non-gaap financial measure. New Gold defines sustaining costs as the difference between all-in sustaining costs and total cash costs, being the sum of net capital expenditures that are sustaining in nature, corporate general and administrative costs, capitalized and expensed exploration that is sustaining in nature, and environmental reclamation costs. Management uses sustaining costs to understand the aggregate net result of the drivers of all-in sustaining costs other than total cash costs. The line items between cash costs and all in sustaining costs in the tables below break down the components of sustaining costs. Sustaining costs is intended to provide additional information only and does not have any standardized meaning under IFRS 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 IFRS. 30

31 Endnotes (2) TOTAL CASH COSTS Total cash costs per ounce is a non-gaap financial measure which is 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. The Company believes that certain investors use this information to evaluate the Company s performance and ability to generate liquidity through operating cash flow to fund future capital expenditures and working capital needs. This measure, along with sales, is considered to be a key indicator of the Company s ability to generate operating earnings and cash flow from its mining operations. Total cash costs include mine site operating costs such as mining, processing and administration costs, royalties, production taxes, and realized gains and losses on fuel contracts, but are exclusive of amortization, reclamation, capital and exploration costs and net of by-product sales. Total cash costs are then divided by ounces of gold sold to arrive at a per ounce figure. Co-product cash costs remove the impact of other metal sales that are produced as a by-product of gold production and apportion the cash costs to each metal produced on a percentage of revenue basis, and subsequently divides the amount by the total ounces of gold or silver or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. Unless otherwise indicated, all total cash cost information in this news release is net of by-product sales. This data is furnished to provide additional information and is a non-gaap financial measure. Total cash costs and co-product cash costs presented do not have a standardized meaning under IFRS 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 IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under GAAP. Further details regarding historical total cash costs and a reconciliation to the nearest IFRS measures are provided in the MD&A accompanying New Gold s financial statements filed from time to time on (3) CASH GENERATED FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL Cash generated from operations before changes in working capital is a non-gaap financial measure with no standard meaning under IFRS, excludes changes in non-cash operating working capital. Management uses this measure to evaluate the Company s ability to generate cash from its operations before working capital changes. Further details regarding cash generated from operations before changes in working capital and a reconciliation to the nearest IFRS measure is provided in the MD&A accompanying New Gold s financial statements filed from time to time on (4) ADJUSTED NET EARNINGS/(LOSS) Adjusted net earnings/(loss) and adjusted net earnings/(loss) per share are non-gaap financial measures. Net earnings/(loss) have been adjusted and tax affected for the group of costs in Other gains and losses on the condensed consolidated income statement. The adjusted entries are also impacted for tax to the extent that the underlying entries are impacted for tax in the unadjusted net earnings/(loss) from continuing operations. The Company uses this measure for its own internal purposes. Management s internal budgets and forecasts and public guidance do not reflect fair value changes on senior notes and non-hedged derivatives, foreign currency translation and fair value through profit or loss and financial asset gains/losses. Consequently, the presentation of adjusted net earnings and adjusted net earnings per share enables investors and analysts to better understand the underlying operating performance of our core mining business through the eyes of management. Management periodically evaluates the components of adjusted net earnings and adjusted net earnings per share based on an internal assessment of performance measures that are useful for evaluating the operating performance of our business and a review of the non-gaap measures used by mining industry analysts and other mining companies. Adjusted net (loss)/earnings and adjusted net (loss)/earnings per share are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures are not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. 5) AVERAGE REALIZED PRICE Average realized price per ounce or pound sold is a non-gaap financial measure with no standard meaning under IFRS. Management uses this measure to better understand the price realized in each reporting period for gold, silver, and copper sales. Average realized price is intended to provide additional information only and does not have any standardized definition under IFRS; it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently and this measure is unlikely to be comparable to similar measures presented by other companies. Further details regarding average realized price and a reconciliation to the nearest IFRS measure is provided in the MD&A accompanying New Gold s financial statements filed from time to time on (6) OPERATING MARGIN Operating margin is a non-gaap financial measure with no standard meaning under IFRS, which management uses to evaluate the Company s aggregated and mine-by-mine contribution to net earnings before non-cash depreciation and depletion charges. 31

32 Investor Relations Anne Day Vice President, Investor Relations