Provides Notice of Release of Second Quarter Financial Results

New Gold Inc. (TSX: NGD) (NYSE American: NGD) reports second quarter operational results for the Company as of June 30, 2022, and provides an update to its 2022 operational outlook for the Rainy River Mine, the New Afton Mine, and the consolidated operational outlook. The Company is also providing notice that it will release its second quarter 2022 financial results before markets open on Thursday, August 4, 2022.

During the second quarter, operations at the Rainy River Mine were adversely impacted by heavy rainfall and flooding around the Fort Frances area in northwestern Ontario. Total tonnes mined from the open pit in the quarter were below expectations as flooding in the pit due to the unfavorable weather impacted the mining rate, the mine sequencing, and access to higher grade ore planned for the second half of the year. The Rainy River Mine therefore utilized the low-grade ore material during the quarter, resulting in both lower grades processed and lower gold ounces produced. The lower tonnes mined (ore and waste) year-to-date has caused a change to the mine plan for the remainder of 2022. The Company’s new Chief Operating Officer is incorporating these impacts on the mine plan, and together with newly hired operating expertise at the site, will focus on positioning the open pit operations to its optimal conditions. This change requires the operation to continue to process low-grade ore material in the second half of 2022. As a result, Rainy River’s gold equivalent¹ production for 2022 is now expected to be between 230,000 to 250,000 ounces (previously 265,000 to 295,000 ounces). Primarily due to lower gold production, as well as, current inflationary cost pressures, operating expenses per gold eq. ounce are now expected to be between $960 to $1,040 per gold eq. ounce² (previously $730 to $810 per gold eq. ounce), and all-in sustaining costs are now expected to be between $1,620 to $1,720 per gold eq. ounce³ (previously $1,270 to $1,370 per gold eq. ounce).  Underground development continues to advance, with Intrepid on track for initial production in the fourth quarter. The mine continues to assess opportunities to offset the negative impact to both production and costs.

During the second quarter, New Afton focused on B3 and C-Zone development and closed the low grade-higher cost recovery level zone earlier than planned. As a result of the early shutdown, tonnes mined was lower than expected. To maintain mill feed, the operation utilized the low-grade stockpile during the quarter, resulting in lower grades and recoveries, and ultimately, lower production. Copper production guidance for 2022 is now expected to be between 25 to 35 million pounds (previously 35 to 45 million pounds). Gold production is expected to be at the low end of the annual production guidance range of 35,000 to 45,000 ounces. Due to the lower production, as well as, current inflationary cost pressures, operating expenses per gold eq. ounce are now expected to be between $1,485 to $1,565 per gold eq. ounce² (previously $1,100 to $1,180 per gold eq. ounce), and all-in sustaining costs are now expected to be between $2,210 to $2,310 per gold eq. ounce³ (previously $1,695 to $1,795 per gold eq. ounce). Production ramp-up at the B3 zone continues to advance with development expected to be completed by September.

Due to the of the revisions at both Rainy River and New Afton, consolidated gold equivalent¹ production for 2022 is now expected to be between 325,000 and 365,000 ounces (previously 380,000 to 440,000 ounces), consisting of consolidated gold production guidance of 260,000 to 290,000 ounces (previously 295,000 to 335,000 ounces) and consolidated copper production guidance of 25 to 35 million pounds (previously 35 to 45 million pounds). New Gold expects its consolidated 2022 operating expenses per gold eq. ounce to be between $1,120 to $1,200 per gold eq. ounce² (previously $840 to $920 per gold eq. ounce), and all-in sustaining costs to be between $1,875 to $1,975 per gold eq. ounce³ (previously $1,470 to $1,570 per gold eq. ounce). All other consolidated and mine site capital investment and exploration estimate guidance, including sustaining capital and sustaining leases and growth capital, remain unchanged.

“Rainy River experienced challenges during the quarter as the Fort Frances area saw extreme rainfall and flooding,” stated Renaud Adams, President & CEO. “I remain confident about the increased production profile as outlined in Rainy River’s latest updated Technical Report announced earlier this year.

At New Afton, the planned closure of the Lift 1 cave, including the recovery level, is now complete. While we’ve announced revisions to New Afton’s copper guidance for the year, the priority remains on the B3 ramp-up and advancing C-Zone development, which remains on time for first ore in the second half of 2023.  With another solid quarter of development prioritizing long-term growth initiatives at both of our operations behind us, I remain confident both are on the cusp of increasing production profiles leading to strong free cash flow generation for our Company for multiple years to come. Concurrently, our exploration efforts have continued to focus on high priority targets with a planned exploration update expected in the third quarter. I believe there is additional value to unlock at our assets through substantial resource to reserve conversion and look forward to updating the market on our progress.”

Consolidated Operational Highlights

Rainy River Mine 

New Afton Mine

2022 Consolidated Operational Outlook

2022 Rainy River Operational Outlook

2022 New Afton Operational Outlook

.

About New Gold

New Gold is a Canadian-focused intermediate mining Company with a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New Afton copper-gold mine. The Company also holds a 5% equity stake in Artemis Gold Inc., and other Canadian-focused investments. New Gold’s vision is to build a leading diversified intermediate gold company based in Canada that is committed to the environment and social responsibility.

Endnotes

1. Total gold eq. ounces include silver and copper produced/sold converted to a gold equivalent. All copper is produced/sold by the New Afton Mine. Gold eq. ounces for Rainy River in Q2 2022 includes production of 93,210 ounces of silver converted to a gold eq. based on a ratio of $1,800 per gold ounce and $24.00 per silver ounce used for 2022 guidance estimates. Gold eq. ounces for New Afton in Q2 2022 includes 7.4 million pounds of copper produced and 24,108 ounces of silver produced converted to a gold eq. based on a ratio of $1,800 per gold ounce, 4.00 per copper pound and $24.00 per silver ounce used for 2022 guidance estimates.
2. “Operating expenses per gold eq. ounce” is a supplementary financial measure which is calculated as total operating expenses divided by total gold equivalent ounces.
3. “All-in sustaining costs”, “sustaining capital and sustaining leases”, and “growth capital” are all non-GAAP financial performance measures that are used in this news release. These measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For more information about these measures, why they are used by the Company, and a reconciliation for Q1 2022 and Q1 2021 to the most directly comparable measure under IFRS, see the “Non-GAAP Financial Performance Measures” section of this news release.