New Gold Inc. (TSX: NGD) (NYSE American: NGD) reports third quarter results for the Company as of September 30, 2022. The Company will host a conference call and webcast today at 8:30 am Eastern Time to discuss the third quarter consolidated results (details are provided at the end of this news release). For detailed information, please refer to the Company’s third quarter Management’s Discussion and Analysis (MD&A) and Financial Statements that are available on the Company’s website at www.newgold.com and on SEDAR at www.sedar.com. The Company uses certain non-GAAP financial performance measures throughout this news release.

Consolidated Third Quarter Highlights

• Gold equivalent¹ production for the quarter of 91,021 ounces (70,147 ounces of gold, 8.5 million pounds of copper and 142,672 ounces of silver)
• Operating expenses of $1,069 per gold eq. ounce⁴
• All-in sustaining costs² of $1,637 per gold eq. ounce, including total cash costs² of $1,114 per gold eq. ounce
• Average realized gold price² of $1,727 per ounce and average realized copper price² of $3.42 per pound
• Cash generated from operations of $54 million, or $0.08 per share
• Cash generated from operations, before changes in non-cash operating working capital² of $44 million, or $0.06 per share
• Net loss of $4 million, or $0.01 per share
• Adjusted net loss² of $13 million, or $0.02 per share
• September 30, 2022 cash and cash equivalents of $247 million
• Subsequent to quarter end, the Company announced the receipt of the New Afton C-Zone Mines Act permit (refer to the Company’s October 7, 2022 news release for further information)

“The third quarter saw our operations recover from their respective challenges during the first half of the year,” stated Renaud Adams, President & CEO. “Rainy River is focused on continuing its ramp-up of mining the open pit main ODM zone in the fourth quarter. Underground production commenced during the quarter and the priority continues to be feeding the mill with higher grade Intrepid underground material, which I anticipate in the very near term. At New Afton, receiving the C-Zone permit and completing B3 development and drawbell construction in late-October, were significant milestones. Our priority remains on ramping up B3 production during the fourth quarter and continuing to advance C-Zone development, with initial production from the C-Zone expected in the second half of 2023.”

Consolidated Financial Highlights

• Revenue decreased over the prior-year periods due to lower copper sales volume and lower realized copper prices, partially offset by higher realized gold prices for the nine-month period ended September 30, 2022.
• Operating expenses were higher than the prior-year period due to higher operating expenses at New Afton as production from B3 continues to ramp-up. For the nine-month period ended September 30, 2022, operating expenses were consistent with the prior-year period.
• Net loss decreased over the prior-year period primarily due to the gain on the revaluation of the Rainy River gold stream and New Afton free cash flow obligation, partially offset by lower revenue. For the nine-month period ended September 30, 2022, net loss increased over the prior-year period primarily due to lower revenue, partially offset by the gain on the revaluation of the New Afton free cash flow obligation.
• Adjusted net loss² increased over the prior-year periods primarily due to lower revenue.
• Cash generated from operations decreased over the prior-year periods due to lower revenue, partially offset by positive working capital movements.

Consolidated Operational Highlights

Rainy River Mine

Operational Highlights

Operating Key Performance Indicators

• Rainy River’s focus for the fourth quarter continues to be ramping up mining of the open pit main ODM zone and introducing the underground material to the mill. Steps were taken over the summer to better position the open pit operations, and substantially complete all of the remaining glacial till waste stripping, with only approximately 2.4 million tonnes left to be mined beginning in the fourth quarter. The strip ratio is expected to be below 3:1 for the remainder of the year, and approximately 2.1:1 for the remainder of the open pit life. Underground production has commenced from the Intrepid zone and will continue to ramp-up over the coming months.
• Open pit tonnes mined per day decreased over the prior-year periods to minimize the amount of rehandling required to feed the mill, and to dewater the open pit early in the quarter. As of the beginning of September, mining from the main ODM zone had commenced and will continue to ramp-up in the coming months.  Approximately 2.3 million ore tonnes and 8.0 million waste tonnes (including 3.9 million capitalized waste tonnes) were mined from the open pit at an average strip ratio of 3.54:1.
• Mining from the underground Intrepid zone advanced during the quarter with the first stope blasted on September 13, 2022. Gold grade from the first stope has reconciled positively to the modeled gold grade and production will continue to ramp-up over the coming months. Underground development advanced an additional 833 metres during the quarter, with the main decline ramp reaching the 200 metre level ahead of plan.
• Tonnes milled per calendar day decreased over the prior-year periods primarily due to processing harder ore from the North Lobe. Mining from the North Lobe open pit is expected to be completed in the first half of 2023.
• Gold eq.¹ production was 60,319 ounces (58,719 ounces of gold and 120,000 ounces of silver), in-line with the prior-year period. For the nine-month period ended September 30, 2022, gold eq.¹ production was 163,973 ounces (160,069 ounces of gold and 292,831 ounces of silver), a decrease over the prior-year period primarily due to lower tonnes processed, partially offset by higher gold recoveries.
• Operating expense per gold eq. ounce⁴ was in-line with the prior-year periods as inflation-driven price increases were partially offset by a weakening of the Canadian dollar relative to the U.S. dollar.
• All-in sustaining costs² per gold eq. ounce increased over the prior-year periods primarily due to higher sustaining capital spend.
• Total capital and leases for the quarter were $34 million and $122 million for the nine-month period ended September 30, 2022, an increase over the prior-year periods due to higher sustaining capitalized waste mining costs as a result of the higher strip ratio. Sustaining capital² during the quarter primarily related to $16 million of capitalized waste, as well as capital maintenance, and the advancement of the annual tailings dam raise. Growth capital² primarily related to the development of the Intrepid underground zone.
• Free cash flow² for the quarter and nine-month period ended September 30, 2022 was a net outflow of $0.7 million (net of a $5 million stream payment) and net inflow of $14 million (net of a $18 million stream payment), respectively, an improvement over the prior-year periods due to an increase in cash generated from operations partially offset by an increase in capital expenditures.

New Afton Mine

Operational Highlights

Operating Key Performance Indicators

• New Afton’s priority for the remainder of the year is to ramp-up B3 production and continue to advance C-Zone development, with first production from C-Zone expected in the second half of 2023. Gold and copper production are expected to significantly increase during the C-Zone period, with all-in sustaining costs to significantly decrease, leading to robust free cash flow during that time.
• Underground tonnes mined per day decreased over the prior-year periods due to the planned completion of Lift 1 mining activities, as well as the closure of the low grade-higher cost recovery level zone in June, earlier than planned. B3 production ramp-up continued on schedule during the quarter, with mining rates expected to reach 8,000 tonnes per day by early-2023.
• Tonnes milled per calendar day decreased over the prior-year periods as planned. During the quarter the site incorporated lower grade surface stockpiles into the mill feed to supplement the overall lower tonnes mined.
• Gold eq.¹ production was 30,701 ounces (11,427 ounces of gold and 8.5 million pounds of copper), and for the nine-month period ended September 30, 2022, gold eq.¹ production was 85,257 ounces (30,610 ounces of gold and 24.1 million pounds of copper), a decrease over the prior-year periods due to lower tonnes processed and lower copper grades. Third quarter gold eq.¹ sales included approximately 7,500 gold eq. ounces which had been deferred from the second quarter due to the timing of concentrate shipments.
• Operating expense per gold eq. ounce⁴ increased over the prior-year periods, primarily due to lower sales volume.
• All-in sustaining costs² per gold eq. ounce increased over the prior-year periods, primarily due to lower sales volume, and higher sustaining capital spend for the nine-month period ended September 30, 2022.
• Total capital and leases for the quarter were $38 million and $107 million for the nine-month period ended September 30, 2022, in-line with the prior-year periods. Sustaining capital² in the quarter primarily related to B3 mine development and tailings management and stabilization activities. Growth capital² in the quarter primarily related to C-Zone development, which advanced 998 metres during the quarter.
• Free cash flow² for the quarter and nine-month period ended September 30, 2022 was a net outflow of $20 million and $96 million, respectively, a decrease over the prior-year periods due to lower revenue.

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 an approximately 4% 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.