Achieves Top End of Consolidated Production Guidance and Midpoint of All-In Sustaining Cost Guidance

New Gold Inc. (TSX: NGD) (NYSE American: NGD) reports fourth quarter and full year 2023 results. Full year 2023 production totaled 423,517 gold equivalent¹ ounces at all-in sustaining costs² of $1,545 per gold eq. ounce, achieving the top end of the Company’s 2023 gold equivalent production guidance range. Another solid quarterly performance delivered strong cash flow from operations of $71 million and positive free cash flow, while still investing in and advancing growth projects that are expected to significantly increase production in the coming years.

Focus on Operational Excellence Leads to Achieving 2023 Production and Cost Guidance Ranges

“2023 was a successful year for New Gold. We executed on our key priority of stabilizing our operations and delivered consistent results throughout the year,” stated Patrick Godin, President and CEO. “As a result, New Gold achieved the top end of its 2023 gold equivalent production guidance, and the midpoint of all-in sustaining cost guidance set out at the start of 2023. The Company was able to once again demonstrate the free cash flow generation potential in the fourth quarter, despite the capital investment in our projects.”

• Fourth quarter consolidated gold eq.¹ production of 105,082 ounces (79,187 ounces of gold, 12.0 million pounds of copper and 157,788 ounces of silver) at all-in sustaining costs² of $1,575 per gold eq. ounce.
• Full year consolidated gold eq.¹ production was 423,517 ounces (321,178 ounces of gold, 47.4 million pounds of copper and 593,146 ounces of silver), achieving the top end of 2023 consolidated production guidance.
• Full year consolidated all-in sustaining costs² of $1,545 per gold eq. ounce achieved the midpoint of 2023 consolidated cost guidance.
• During the fourth quarter, the Company generated positive free cash flow² of $1 million after investing over $61 million in advancing growth projects. Rainy River had another excellent quarter generating $24 million in free cash flow², net of $24 million in capital expenditures and $7 million in stream payments.

2024 an Inflection Point as Growth Projects Set for Completion, Company Expected to Enter Prolonged Free Cash Flow Generation Period in the Second Half of the Year

“Last week we outlined our Operational Outlook for the next three years highlighting an approximately 35% increase in gold production and approximately 60% increase in copper production by 2026. As we work towards completing our growth projects this year, the reduction in operating costs and capital expenditures should see consistent free cash flow generation commencing in the second half of this year. This free cash flow growth is expected to increase over the next three years in-line with our increasing production profiles. We have reached the free cash flow inflection point, and I look forward to sharing progress throughout the year,” added Mr. Godin.

• 2024 consolidated gold production is expected to be 310,000 to 350,000 ounces, compared to 321,178 in 2023. Production is expected to strengthen in the second half of the year, with the second half of 2024 expected to represent approximately 60% of annual production as waste stripping at Rainy River is sequenced in the first half of the year. 2024 copper production is expected to be 50 to 60 million pounds, approximately 16% higher than 2023 driven by increased contribution from C-Zone at New Afton.
• 2024 total capital is expected to be $290 to $330 million, as growth projects at both operations are completed in the year. Commercial production at C-Zone remains on-track for the second half of 2024, along with commissioning of the underground crusher and conveyor. Initial production from Rainy River’s underground Main Zone remains on-track for the fourth quarter of 2024.
• 2024 is expected to be the final year of significant capital spending, as the Company starts to realize the benefits of these expenditures. As a result, consolidated gold production is expected to increase by approximately 35% over 2023 to 410,000 to 460,000 ounces in 2026. Copper production is expected to increase by approximately 60% compared to 2023 to 71 to 81 million pounds in 2026. All-in sustaining costs (on a by-product basis)² are expected to decrease by over 50% compared to 2023 to between $650 and $750 per ounce in 2026.
• The higher production, lower total cash costs, and lower capital spend over the next three years are expected to drive significant free cash flow for the Company.

Consolidated Financial Highlights

• Revenue increased over the prior-year periods primarily due to higher sales volumes and higher gold prices, partially offset by lower copper prices.
• Operating expenses were higher than the prior-year periods due to higher production.
• Net loss for the quarter increased over the prior-year period primarily due to higher unrealized losses on the revaluation of the Rainy River gold stream obligation and the New Afton free cash flow interest obligation, partially offset by higher revenue. For the year ended December 31, 2023, net loss was consistent compared to the prior-year period.
• Adjusted net earnings² for the quarter was consistent compared to the prior-year period. For the year ended December 31, 2023, adjusted net earnings² increased compared to the prior-year period primarily due to higher revenue and lower finance costs, partially offset by higher operating expenses, and depreciation and depletion.
• Cash generated from operations increased over the prior-year periods primarily due to higher revenue.

Consolidated Operational Highlights

Rainy River Mine

Operational Highlights

Operating Key Performance Indicators

• Fourth quarter gold eq.¹ production was 64,290 ounces (62,692 ounces of gold and 127,138 ounces of silver), a decrease over the prior-year period due to lower gold grade and recovery, partially offset by higher tonnes processed. Full year gold eq.¹ production was 259,679 ounces (253,745 ounces of gold and 472,018 ounces of silver), an increase over the prior year primarily due to higher tonnes processed and higher gold grade. Full year gold eq.¹ production achieved the top end of the 2023 guidance range of 235,000 to 265,000 ounces.
• Operating expense⁴ per gold eq. ounce for the quarter increased over the prior-year period due to lower sales volume. Full year operating expense per gold eq. ounce increased over the prior-year period due to lower capitalized tonnes, and increased costs associated with mill maintenance, partially offset by higher sales volume. Full year operating expense per gold eq. ounce was above the annual guidance range of $905 to $985 per gold eq. ounce as a result of the lower capitalized tonnes, previously outlined in the Company’s third quarter 2023 earnings release.
• All-in sustaining costs² per gold eq. ounce for the quarter increased over the prior-year period primarily due to lower sales volume, partially offset by a lower sustaining capital. Full year all-in sustaining costs² per gold eq. ounce decreased over the prior-year period primarily from higher sales volume and lower sustaining capital. Full year all-in sustaining costs² per gold eq. ounce was within the 2023 guidance range of $1,475 to $1,575 per gold eq. ounce.
• Total capital for the quarter and full year was $24 million and $121 million, respectively, a decrease over the prior-year periods due to lower capitalized waste mining costs in the year, and lower capital development in the Intrepid underground zone. Sustaining capital² primarily related to capitalized waste and tailings dam raise. Growth capital² is related to the continued development of the Intrepid underground zone. Full year total capital is below the 2023 guidance range of $145 million to $165 million, with $25 million of capitalized waste deferred to 2024.
• Free cash flow² for the quarter and year ended December 31, 2023 was $24 million and $55 million (net of $7 million and $29 million stream payments), respectively, an improvement over the prior-year periods primarily due to higher revenue and a decrease in capital expenditures.

New Afton Mine

Operational Highlights

Operating Key Performance Indicators

• Fourth quarter gold eq.¹ production was 40,792 ounces (16,495 ounces of gold and 12.0 million pounds of copper), and for the year ended December 31, 2023, gold eq.¹ production was 163,838 ounces (67,433 ounces of gold and 47.4 million pounds of copper). The increase over the prior-year periods was due to higher grades and recovery. Full year gold eq.¹ production exceeded the 2023 guidance range of 130,000 to 160,000 ounces.
• Operating expense⁴ per gold eq. ounce decreased over the prior-year periods, primarily due to higher sales volume. Full year operating expense⁴ per gold eq. ounce was within the 2023 guidance range of $1,035 to $1,115 per gold eq. ounce.
• All-in sustaining costs² per gold eq. ounce decreased over the prior-year periods, primarily due to higher sales volume and lower sustaining capital spend. Full year all-in sustaining costs² per gold eq. ounce was at the low end of the 2023 guidance range of $1,320 to $1,420 per gold eq. ounce.
• Total capital for the quarter and full year was $36 million and $145 million, respectively, relatively in-line with prior-year periods. Sustaining capital² is primarily related to the continuation of tailings management and stabilization activities. Growth capital² primarily related to C-Zone development, which advanced 1,242 meters during the quarter. Full year total capital is at the low end of the 2023 guidance range of $145 million to $185 million.
• Free cash flow² for the quarter and year ended December 31, 2023 was a net outflow of $11 million and $44 million, respectively, an improvement over the prior-year periods primarily due to an increase in revenue and a decrease in capital expenditure.

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.

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 Q4 2023 includes production of 127,138 ounces of silver (124,421 ounces of silver sold) converted to a gold eq. based on a ratio of $1,750 per gold ounce and $22.00 per silver ounce used for 2023 guidance estimates. Gold eq. ounces for New Afton in Q4 2023 includes 12.0 million pounds of copper produced (11.9 million pounds sold) and 30,651 ounces of silver produced (28,838 ounces of silver sold) converted to a gold eq. based on a ratio of $1,750 per gold ounce, $3.50 per copper pound and $22.00 per silver ounce used for 2023 guidance estimates.
2. “Total cash costs”, “all-in sustaining costs”, “adjusted net earnings/(loss)”, “adjusted tax expense”, “sustaining capital and sustaining leases”, “growth capital”, “cash generated from operations, before changes in non-cash operating working capital”, “free cash flow”, and “average realized gold/copper price per ounce/pound” are all non-GAAP financial performance measures that are used in this news release. These measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For more information about these measures, why they are used by the Company, and a reconciliation to the most directly comparable measure under IFRS, see the “Non-GAAP Financial Performance Measures” section of this news release.
3. Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable.
4. These are supplementary financial measures which are calculated as follows: “revenue per ounce/pound” is revenue divided by gold ounces or copper pounds sold, “operating expenses per gold eq. ounce” is operating expenses divided by gold equivalent ounces sold, “depreciation and depletion per gold eq. ounce” is depreciation and depletion divided by gold equivalent ounces sold, “operating expenses ($/oz gold, co-product)” and “operating expenses ($/lb copper, co-product)” is operating expenses apportioned to each metal produced on a percentage of activity basis, and subsequently divided by the total gold ounces, or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures.
5. Key performance indicator data is inclusive of ounces from ore purchase agreements for New Afton. The New Afton Mine purchases small amounts of ore from local operations, subject to certain grade and other criteria. These ounces represented approximately 3% of total gold ounces produced at New Afton during the quarter, and 7% for the year ended December 31, 2023, using New Afton’s excess mill capacity. All other ounces are mined and produced at New Afton.