On-Track to Achieve 2023 Production and Cost Guidance; Rainy River Underground and New Afton C-Zone Continue to Advance

New Gold Inc. (TSX: NGD) (NYSE American: NGD) reports second quarter results for the Company as of June 30, 2023. For detailed information, please refer to the Company’s Management’s Discussion and Analysis and financial statements for the quarter ended June 30, 2023 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. Please refer to the “Non-GAAP Financial Performance Measures” section of this news release and the MD&A for more information. Numbered note references throughout this news release are to endnotes which can be found at the end of this news release.

Consolidated Second Quarter Highlights

• Gold equivalent¹ production for the quarter of 102,374 ounces (76,527 ounces of gold, 12.0 million pounds of copper and 152,208 ounces of silver)
• Operating expenses of $1,090 per gold eq. ounce
• All-in sustaining costs² of $1,657 per gold eq. ounce, including total cash costs² of $1,129 per gold eq. ounce
• Average realized gold price² of $1,970 per ounce and average realized copper price² of $3.82 per pound
• Cash generated from operations of $56 million, or $0.08 per share
• Cash generated from operations, before changes in non-cash operating working capital² of $65 million, or $0.10 per share
• Net loss of $3 million, or $0.00 per share
• Adjusted net earnings² of $12 million, or $0.02 per share
• Cash and cash equivalents of $174 million as at June 30, 2023
• During the quarter, the Company published its 2022 Environmental, Social and Governance Report (refer to the Company’s June 19, 2023 news release for further information)

“New Gold carried the momentum from a strong start to the year and delivered another excellent quarter,” stated Patrick Godin, President & CEO. “We delivered a 45% increase in gold equivalent production with lower all-in sustaining costs, significantly increasing our margins over the prior-year period, accomplishing our goals safely. I am also proud that during the second quarter, the New Afton Mine received the J.T Ryan Safety Award for British Columbia and Yukon and British Columbia’s Safest Large Underground Mine Award. We will continue to build on these positive results as we look to the second half of the year, and we remain well positioned to meet our guidance ranges set out earlier in the year.”

“Looking beyond 2023, we continued to make progress advancing our growth initiatives. During the quarter, underground development at Rainy River continued, with development of the ramp access to the underground Main Zone advancing 98 metres. Following detailed internal optimization studies, I am excited to share that access to the underground Main Zone commenced from the Intrepid Zone, providing the mine with a number of efficiencies over the previous plan. C-Zone development at New Afton continued well in the quarter, advancing 1,415 metres. Our development rate increased substantially over the first quarter, and I remain confident in our ability to achieve first production ore during the fourth quarter, with commercial production planned for the second half of 2024,” added Mr. Godin.

Consolidated Financial Highlights

• Revenue increased over the prior-year periods due to higher gold prices and higher gold and copper sales volumes, partially offset by lower copper prices.
• Operating expenses increased over the prior-year periods primarily due to higher production and sales at both sites.
• Net loss decreased over the prior-year periods primarily due to higher revenues, lower finance costs, and a smaller loss on the revaluation of investments, partially offset by higher operating expenses, and depreciation and depletion.
• Adjusted net earnings² increased over the prior-year periods due to higher revenues and lower finance costs, partially offset by higher operating expenses, and depreciation and depletion.
• Cash generated from operations increased over the prior-year periods due to higher revenue, partially offset by negative working capital movements.

Consolidated Operational Highlights

Rainy River Mine

Operational Highlights

Operating Key Performance Indicators

• Second quarter gold eq.¹ production was 61,419 ounces (59,882 ounces of gold and 122,211 ounces of silver). For the six months ended June 30, 2023, gold eq.¹ production was 129,015 ounces (126,083 ounces of gold and 233,187 ounces of silver). The increase over the prior-year periods is due to higher gold grades. Underground production rates continue to ramp-up with grades reconciling well relative to plan.
• During the second quarter, Rainy River’s open pit mining sequence was optimized to maintain a consistent production profile throughout the year, leading to ounces being mined ahead of schedule. Rainy River remains well positioned to meet annual production and cost guidance metrics.
• Operating expense per gold eq. ounce increased over the prior-year periods due to lower capitalized tonnes than the prior periods and increased costs associated with mill maintenance performed in the quarter, partially offset by higher sales volume.
• All-in sustaining costs² per gold eq. ounce decreased over the prior-year periods due to lower sustaining capital spend and higher sales volume.
• Total capital decreased over the prior-year periods due to lower sustaining capital, partially offset by higher growth capital. Sustaining capital² primarily related to capitalized waste, as well as capital maintenance, and the commencement of the annual tailings dam raise. Growth capital² related to the development of the Intrepid underground and underground Main Zones, which advanced 524 metres during the quarter.
• Free cash flow² for the quarter and six months ended June 30, 2023, was $2 and $17 million (net of $7 and $15 million stream payments, respectively), which is consistent with the prior-year periods as the impact of higher revenue was offset by higher working capital movement in the prior-year periods.
• Development of the underground Main Zone commenced during the quarter as planned. Following internal evaluations through the first half of the year, the underground Main Zone will initially be reached via the underground Intrepid Zone. Deferral of the in-pit portal for the Main Zone will allow for a number of efficiencies and further optimization of the existing open pit for its remaining mine life. During the quarter development of the underground Main Zone advanced 98 metres.

New Afton Mine

Operational Highlights

Operating Key Performance Indicators

• Second quarter gold eq.¹ production was 40,955 ounces (16,645 ounces of gold and 12.0 million pounds of copper). For the six months ended June 30, 2023, gold eq.¹ production was 78,216 ounces (32,921 ounces of gold and 22.3 million pounds of copper). The increase over the prior-year periods is due to higher gold and copper grades and recovery, partially offset by lower tonnes processed. New Afton remains well positioned to meet annual production and cost guidance metrics.
• Operating expense per gold eq. ounce decreased over the prior-year periods primarily due to a higher sales volume.
• All-in sustaining costs² per gold eq. ounce decreased over the prior-year periods due to lower sustaining capital spend and higher sales volume.
• Total capital increased over the prior-year periods, primarily due to higher growth capital spend partially offset by lower sustaining capital spend. Sustaining capital² primarily related to tailings management and stabilization activities. Growth capital² primarily related to C-Zone development.
• Free cash flow² for the quarter and six months ended June 30, 2023, was a net outflow of $19 and $38 million, respectively, an increase over the prior-year periods primarily due to an increase in cash generated from operations partially offset by an increase in growth capital.
• During the quarter C-Zone advanced 1,415 metres, up from 1,172 metres in the first quarter. Completion of the ventilation raise in the second quarter contributed to increased development rates. Development on the extraction level to achieve first drawbell was completed in the quarter, positioning the Company well for first production ore in the fourth quarter, with commercial production planned for the second half of 2024.
• During the quarter, the Company completed 5,586 metres of diamond drilling in 18 drill holes from underground. Exploration efforts prioritized potential mineralization on the Artificial Intelligence North target area and K-Zone, as well as confirming the true width and continuity of mineralization defined on the D-Zone target area.
• A strike by the International Longshore and Warehouse Union Canada closed DP World Fraser Surrey Port from July 1st to July 13th. To mitigate the impact of the strike, New Afton has increased shipments of concentrate by rail to eastern Canada and has not been materially affected to date.

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 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.