Market Overview

New Gold Reports First Quarter Financial Results

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On-Track to Meet Annual Guidance

New Gold Inc. ("New Gold" or the "Company") (TSX and NYSE American:
NGD)
reports first quarter results for the Company as of March 31,
2019. (All amounts are in U.S. dollars unless otherwise indicated)

A conference call and webcast will follow to discuss these results at
8:30 a.m. Eastern time (details are provided at the end of this press
release).

(For detailed information, please refer to the Company's First
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 press release. Please refer to the "Non-GAAP Financial
Performance Measures" section of this press release and in the MD&A.)

First Quarter Highlights

Highlights for the first quarter include:

  • Total production of 123,263 gold equivalent (eq.) ounces (79,398
    ounces of gold, 136,513 ounces of silver and 19.5 million pounds of
    copper) at average realized gold and copper prices1 of
    $1,301 per ounce and $2.79 per pound, respectively. Production is on
    track to meet annual guidance of 465,000 to 520,000 gold equivalent
    ounces.
  • Revenues of $167.9 million.
  • Operating expense of $645 per gold eq. ounce, on track to meet annual
    guidance of $690 to $790.
  • All-in sustaining costs (AISC)1 of $1,083 per gold eq.
    ounce, on track to meet annual guidance of $1,330 to $1,430.
  • Net loss from continuing operations of $13.4 million ($0.02 per share).
  • Adjusted net loss1 from continuing operations, which
    excludes other gains and losses, was $1.8 million ($0.00 per share).
  • Operating cash flow generated from continuing operations of $74.3
    million ($0.13 per share). Operating cash flow generated from
    continuing operations, before changes in non-cash operating working
    capital1, was $71.1 million ($0.12 per share).

"We are encouraged by the progress made at Rainy River during the first
quarter as we re-position the operation for efficient and sustainable
mining. Over the course of the year, we expect to drive further
efficiencies throughout the operation with the objective of delivering
free cash flow starting in late 2020," stated Renaud Adams, CEO. "The
New Afton Mine reported another strong quarter of operating results as
the team further advanced the development of the C-zone. We are
particularly encouraged with the organic growth potential of the D-zone
with the first hole of the exploration drilling program intersecting 140
metres of mineralization located 360 metres below the C-zone and a
second hole is currently underway."

Financial Highlights (Continuing Operations1)

    First Quarter 2019   First Quarter 2018
Revenues from mining operations   167.9   147.5
Net earnings (loss), per share   (0.02)   (0.05)
Adj. net earnings (loss)2 per share   (0.00)   (0.03)
Operating cash flow, per share   0.13   0.07
Adj. operating cash flow2, per share   0.12   0.09
1. Continuing operations include the Rainy River, New Afton and
Cerro San Pedro Mines.

2. Refer to the "Non-GAAP Performance Measures" section of this
press release.

1. Refer to the "Non-GAAP Performance Measures section of
this press release.

  • Revenues for the quarter from continuing operations were $167.9
    million, an increase over the prior-year quarter due to an increase in
    gold ounces sold, offset by a decrease in average realized prices.
  • Net loss for the quarter was $13.4 million, or $0.02 per share, and
    adjusted net loss was $1.8 million, or $0.00 per share, which improved
    over the prior-year quarter due to the increase in revenue.
  • The March 31, 2019 cash balance was $132.3 million.

Operational Highlights (Continuing Operations1)

    First Quarter 2019   First Quarter 2018   Guidance 2019
Gold eq. production (ounces) 2,3   123,263   119,075   465,000 – 520,000
Gold production (ounces)   79,398   63,771   300,000 – 335,000
Copper production (Mlbs)   19.5   22.2   75 – 85
Average realized gold price, per ounce4   1,301   1,331   -
Average realized copper price, per pound4   2.79   3.14   -
Operating expense, per gold eq. ounce3   645   760   -
Total cash costs, per gold eq. ounce3,4   697   828   740 - 820
AISC, per gold eq. ounce3,4   1,083   1,373   1,330 - 1,430
Sustaining capital and sustaining leases (NYSE:M)4  

44.7

  55.5   255 - 285
Growth capital (NYSE:M)4   7.8   12.7   50 - 55
1. Continuing operations include the Rainy River, New Afton and
Cerro San Pedro Mines.

2. All production and cost figures exclude production from Cerro
San Pedro residual leaching.

3. Gold equivalent ounces produced includes silver ounces and
copper pounds converted to a gold equivalent based on a ratio of
the average spot market prices for the commodities for each period.

4. Refer to the "Non-GAAP Performance Measures" section of this
press release.

Rainy River Mine Highlights

    First Quarter 2019   First Quarter 2018   Guidance 2019
Gold eq. production (ounces) 1   62,278   40,016   250,000 – 275,000
Gold eq. sold (ounces)1   71,483   41,621   -
Gold produced (ounces)   61,557   39,325   245,000 – 270,000
Gold sold (ounces)   70,695   40,880   -
Average realized gold price, per ounce2   1,295   1,328   -
Operating expense, per gold eq. ounce   801   1,240   -
Total cash costs, per gold eq. ounce2   801   1,240   870 - 950
AISC, per gold eq. ounce2   1,330   2,427   1,690 - 1,790
Sustaining capital and sustaining leases (NYSE:M)2   36.6   48.9   210 - 230
Growth capital (NYSE:M)2   3.8   10.2   ~3.0
1. Gold equivalent ounces for Rainy River include silver ounces
produced converted to a gold equivalent based on a ratio of the
average spot market prices for the commodities for each period. The
ratio for Q1 2019 was calculated based on average spot market prices
of $1,304 per gold ounce and $15.57 per silver ounce. The ratio for
Q1 2018 was calculated based on average spot market prices of $1,329
per gold ounce and $16.77 per silver ounce.

2. Refer to the "Non-GAAP Performance Measures" section of this
press release.

    Q1 18   Q2 18   Q3 18   Q4 18   Q1 2019
Tonnes ex-pit mined per day (ore and waste)   112,432   107,416   102,290   111,507   111,679
Ore tonnes mined per day   36,296   36,043   30,439   32,054   15,739
Operating waste tonnes per day   54,321   43,570   23,333   67,406   62,955
Capitalized waste tonnes per day   21,816   27,802   48,518   12,047   32,986
Strip ratio (waste:ore)   2.1   1.98   2.36   2.48   6.10
Tonnes milled per calendar day   17,534   16,549   16,962   20,668   19,725
Gold grade milled (g/t)   1.08   1.24   1.21   1.42   1.19
Gold recovery (%)   81%   87%   87%   89%   90%
Mill availability (%)   77%   74%   76%   80%   89%
Gold production (oz)   39,325   55,219   55,538   77,202   61,557
  • The Rainy River Mine reported in-line gold equivalent production of
    62,278 ounces (61,557 ounces of gold and 60,383 ounces of silver) for
    the quarter. As previously disclosed, production during the quarter
    included planned lower grades as mining operations continued the
    transition to phase 2 of the mine plan.
  • Operating expense per gold eq. ounce was $801 for the quarter, which
    is a 35% decrease over the prior-year quarter, driven by improved
    operational performance and increased metal production and sales
    volumes achieved in the current year quarter.
  • All-in sustaining costs (AISC) per gold eq. ounce for the quarter were
    $1,330, which included $10 million of capitalized stripping costs
    ($140 per gold eq. ounce), and $27 million of other sustaining capital
    expenditure and lease payments. AISC per gold eq. ounce for the
    quarter declined by 45% over the prior-year quarter due to improved
    operational performance and an increase in metal production and sales
    volumes coupled with a decrease in sustaining capital. It is expected
    that sustaining capital will be higher in the second and third
    quarters when weather conditions are more favourable for
    infrastructure and tailings construction and will decline in the
    fourth quarter.
  • Growth capital for the quarter was $3.8 million, related to
    underground mine development, working capital payments and the
    transfer of infrastructure from the contractor.
  • During the quarter, approximately 1.4 million ore tonnes and 8.6
    million waste tonnes (including 2.97 million capitalized waste tonnes)
    were mined at an operating strip ratio of 6.10:1. Mining operations in
    the quarter were primarily focused on waste stripping to expose ore
    for mining in future quarters. Additionally, 0.9 million tonnes of
    out-pit non-acid generating (NAG) material were mined in preparation
    for planned dam raises scheduled to begin during the second quarter.
  • Mill throughput for the quarter averaged 19,725 tonnes per day, below
    the annual target of 22,000 to 24,000 tonnes per day. The lower
    average mill throughput was negatively impacted by the significant
    buildup of ice in the crushed ore stockpile above the apron feeders.
    Average mill throughput returned to target levels at the end of the
    quarter.
  • Mill availability for the quarter was a record 89% (95% in March),
    despite the planned downtime to replace the ball mill trunnion and
    complete repairs.
  • Gold recovery improved to average 90% for the quarter, a significant
    improvement over the 89% reported in the fourth quarter when
    considering the 16% lower average grade milled. Recoveries are
    expected to continue to improve throughout the year to an average of
    90-92% for the year.
  • During the first quarter of 2019, the Company launched a comprehensive
    optimization study that includes the review of alternative open pit
    and underground mining scenarios with the overall objective of
    reducing capital and improving the return on investment over the life
    of mine. An updated life of mine plan is anticipated to be completed
    in the fourth quarter.
  • A strategic exploration drill program is expected to begin in the
    second quarter that will test near-mine targets in the Intrepid North
    area.

New Afton Mine Highlights

    First Quarter 2019   First Quarter 2018   Guidance 2019
Gold eq. produced (ounces) 1   60,986   73,717   215,000 – 245,000
Gold eq. sold (ounces) 1   63,216   69,914   -
Gold produced (ounces)   17,841   19,998   55,000 – 65,000
Gold sold (ounces)   18,617   18,485   -
Copper produced (Mlbs)   19.5   22.2   75 – 85
Copper sold (Mlbs)   20.2   21.3   -
Average realized gold price, per ounce2   1,327   1,336   -
Average realized copper price, per pound2   2.79   3.14   -
Operating expense, per gold eq. ounce   468   405   -
Operating expense, per gold ounce   477   408   480 - 520
Operating expense, per copper pound   1.00   0.96   0.95 - 1.15
Total cash costs, per gold ounce (net of by-product credits)2   (1,132)   (1,702)   (1,350 - 1,310)
Total cash costs, per gold eq. ounce2   578   523   600 - 640
AISC, per gold ounce (net of by-product credits)2   (673)   (1,313)   (500) – (420)
AISC, per gold eq. ounce2   714   626   810 - 890
Sustaining capital and sustaining leases (NYSE:M)2   8.0   6.6   45 - 55
Growth capital (NYSE:M)2   2.6   0.5   40 - 45
1. Gold equivalent ounces for New Afton includes silver ounces and
copper pounds produced converted to a gold equivalent based on a
ratio of the average spot market prices for the commodities for each
period. The ratio for Q1 2019 was calculated based on average spot
market prices of $1,304 per gold ounce, $15.57 per silver ounce and
$2.82 per copper pound. The ratio for Q1 2018 was calculated based
on average spot market prices of $1,329 per gold ounce, $16.77 per
silver ounce and $3.16 per copper pound.

2. Refer to the "Non-GAAP Performance Measures section of this
press release.

    Q1 18   Q2 18   Q3 18   Q4 18   Q1 19
Total ore tonnes mined per day   16,108   13,654   17,105   17,099   15,352
Gold grade milled (g/t)   0.57   0.50   0.55   0.51   0.50
Gold recovery (%)   84.1   85.5   84.7   83.5   83.2
Gold production (oz)   19,998   18,637   19,916   18,778   17,841
Copper grade milled (%)   0.94   0.82   0.89   0.82   0.80
Copper recovery (%)   83.2   83.8   83.0   83.0   83.20
Copper production (Mlbs)   22.2   20.4   21.7   20.8   19.53
  • The New Afton mine produced 60,986 gold equivalent ounces for the
    quarter, including 17,841 ounces of gold, and 19.5 million pounds of
    copper, in line with plan.
  • Operating expense per gold eq. ounce was $468 for the quarter, which
    is an increase from the prior-year quarter primarily due to a decrease
    in sales volume.
  • All-in sustaining costs (AISC) per gold eq. ounce for the quarter was
    $714. AISC per gold ounce (net of by-product credits) for the quarter
    was ($673). All-in sustaining costs have increased over the prior-year
    quarter due to an increase in sustaining capital as well as a decrease
    in metal sales volume and revenue.
  • Sustaining capital and sustaining lease payments for the quarter was
    $8.0 million, primarily related to tailings dam raises and equipment
    purchases and sustaining mine development.
  • Growth capital for the quarter was $2.6 million, primarily related to
    the C-zone.
  • The second phase of a planned mill upgrade to address supergene ore
    recovery advanced during the quarter with commissioning scheduled for
    the third quarter.
  • Development of the B3-zone is currently underway, which will sustain
    ongoing production during the C-zone development period.
  • Efforts during the quarter continued to focus on de-risking the
    execution of C-zone project, primarily on the finalization of the
    tailings disposal plan and advancing permitting efforts with the
    objective of updating the life of mine plan in the latter part of the
    year. During the quarter, exploration-heading development towards the
    C-zone commenced and advanced by approximately 50 metres.
  • An underground drilling program is currently underway that will test
    the down plunge extension of the C-zone (the D-zone) that could
    increase the resource inventory and extend mine life beyond 2030. The
    first hole of the 10-hole program has been completed, which
    intersected C-zone style mineralization over an approximate 140-metre
    interval (from 662 metres to 802 metres depth) and ended at the
    planned target, 360 vertical metres below the C-zone (assays pending).
    A second drill hole is currently underway and the program is expected
    to be completed by the end of the third quarter.

Blackwater Project Highlights

  • On April 15, 2019, the federal Minister of Environment and Climate
    Change issued a positive Decision Statement regarding the Blackwater
    project's environmental assessment, which is a very significant
    milestone for the project. The Company expects a decision from the
    province of British Columbia on the environmental assessment by the
    end of 2019.
  • On April 18, 2019, the Company entered into a trilateral Participation
    Agreement with the Lhoosk'uz Dene Nation and Ulkatcho First Nation,
    the two Indigenous groups whose traditional territories overlap the
    project's mine site. Engagement and negotiations with other First
    Nations continue.

Conference Call and Webcast Information

The Company will host a webcast and conference call on Thursday, April
25, 2019 at 8:30 am (EDT) to discuss the Company's first quarter
financial and operating results.

Via Webcast: Available on the Company's website at www.newgold.com
or from the following link: https://event.on24.com/wcc/r/1975620/0AAB421FD47B45BB007F5F7D94728049

Via Telephone: Please dial 1-647-427-2311 or toll free 1-866-521-4909

Replay Archive: Please dial 1-416-621-4642 or toll free 1-800-585-8367,
access code 3885697

The recorded playback of the conference call will be available until May
25, 2019. An archived webcast will be available until July 25, 2019.

About New Gold Inc.

New Gold is a Canadian-focused intermediate gold mining company. The
Company has a portfolio of two core producing assets, the Rainy River
and New Afton Mines in Canada. The Company also operates the Cerro San
Pedro Mine in Mexico (which transitioned to residual leaching in 2016).
In addition, New Gold owns 100% of the Blackwater project located in
Canada. New Gold's objective is to be a leading intermediate gold
producer, focused on the environment and social responsibility. For
further information on the Company, please visit www.newgold.com.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this news release, including any
information relating to New Gold's future financial or operating
performance are "forward looking". All statements in this news release,
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 news release include, among others, statements with respect to:
guidance for production, operating expenses per gold ounce sold, total
cash costs and all-in sustaining costs, and the factors contributing to
those expected results, including throughput and recoveries, as well as
expected capital expenditures; planned development and exploration
activities for 2019 and beyond at the Company's operations; and the
expected timing of a revised life-of-mine plan for Rainy River and
decision from the province of British Columbia on the environmental
assessment of Blackwater.

All forward-looking statements in this news release 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 news release, New Gold's latest annual management's
discussion and analysis ("MD&A"), Annual Information Form and Technical
Reports filed at www.sedar.com
and on EDGAR at www.sec.gov.
In addition to, and subject to, such assumptions discussed in more
detail elsewhere, the forward-looking statements in this news release
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, New Afton and Blackwater being
consistent with New Gold's current expectations; and (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; (9) the result of feasibility studies
and other studies being realized, and (10) metals and other commodity
prices and exchange rates being consistent with those estimated for the
purposes of 2019 guidance.

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 a mine with relatively limited history of
commercial production, 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 www.sedar.com
and on EDGAR at www.sec.gov.
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.

Technical Information

The scientific and technical information relating to the Mineral
Reserves contained herein has been reviewed and approved by Mr. Nicholas
Kwong, Director of Technical Services for the Company. The scientific
and technical information relating to the Mineral Resources contained
herein has been reviewed and approved by Mr. Mark A. Petersen, a
consultant to New Gold and its former Vice President, Exploration. All
other scientific and technical information in this news release has been
reviewed and approved by Mr. Eric Vinet, Vice President, Technical
Services for the Company. Mr. Kwong is a Professional Engineer and a
member of the Association of Professional Engineers and Geoscientists of
British Columbia. Mr. Petersen is a Professional Geoscientist (P.Geo.)
and Practicing Member of the Association of Professional Geoscientists
of Ontario, an SME Registered Member and an AIPG Certified Professional
Geologist. Mr. Vinet is a Professional Engineer and member of the Ordre
des ingénieurs du Québec. Mr. Kwong, Mr. Petersen and Mr. Vinet are
"Qualified Persons" for the purposes of NI 43-101.

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 43101. 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.

Non-GAAP Financial Performance Measures

All-in sustaining costs (AISC) per equivalent gold ounce, total cash
costs per gold ounce and per gold equivalent ounce, sustaining capital
and growth capital, Adjusted net earnings/(loss), operating cash flows
generated from operations, before changes in non-cash operating working
capital and average realized price and are non-GAAP financial measures
that 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. The Company believes that
these measures, together with measures determined in accordance with
IFRS, provide investors with an improved ability to evaluate the
underlying performance of the Company. In addition, certain non-GAAP
measures are utilized, along with other measures, in the Company
scorecard to set incentive compensation goals and assess performance of
its executives.

All-In Sustaining Costs per Gold Equivalent Ounce

"All-in sustaining costs per gold equivalent 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 New Gold defines "all-in sustaining costs" per ounce as
the sum of total cash costs, capital expenditures that are sustaining in
nature, corporate general and administrative costs, capitalized and
expensed exploration that is sustaining in nature, lease payments that
are sustaining in nature, and environmental reclamation costs, all
divided by the ounces of gold equivalent sold to arrive at a per ounce
figure.

In addition to gold the Company produces copper and silver. Gold
equivalent ounces of copper and silver produced in a quarter are
computed by calculating the ratio of the average spot market copper and
silver prices to the average spot market gold price in a quarter and
multiplying this ratio by the pounds of copper and silver ounces
produced during that quarter. Gold equivalent ounces produced in a
period longer than one quarter are calculated by adding the number of
gold equivalent ounces in each quarter of that period. Notwithstanding
the impact of copper and silver sales, as a Company focused on gold
production, New Gold aims to assess the economic results of its
operations in relation to gold, which is the primary driver of New
Gold's business.

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.

"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, lease
payments that are sustaining in nature. and environmental reclamation
costs. New Gold terms non-sustaining capital costs to be "growth
capital". 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,
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.

Total Cash Costs

"Total cash costs per ounce" and total cash costs per gold equivalent
ounce are non-GAAP financial measures which are 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 2002.
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, but are exclusive of amortization,
reclamation, capital and exploration costs. Total cash costs per gold
ounce are net of by-product sales and are divided by gold ounces sold to
arrive at a per ounce figure. Total cash costs per gold equivalent ounce
are divided by gold equivalent ounces sold to arrive at a per ounce
figure.

Unless otherwise indicated, all total cash cost information in this news
release is on a gold equivalent ounce basis. Gold equivalent ounces of
copper and silver produced in a quarter are computed by calculating the
ratio of the average spot market copper and silver prices to the average
spot market gold price in a quarter and multiplying this ratio by the
pounds of copper and silver ounces produced during that quarter. Gold
equivalent ounces produced in a period longer than one quarter are
calculated by adding the number of gold equivalent ounces in each
quarter of that period. This data is furnished to provide additional
information and is a non-GAAP financial measure. Total 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.

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 items which are included in other gains
and 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.

Operating Cash Flows Generated from Operations, before Changes in
Non-Cash Operating Working Capital

"Operating cash flows generated from operations, before changes in
non-cash operating working capital" is a non-GAAP financial measure with
no standard meaning under IFRS, which 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 temporary
working capital changes.

Operating cash flows generated from operations, before non-cash changes
in working capital is intended to provide additional information only
and does not have any standardized meaning 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.

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.

For additional information with respect to the non-GAAP measures used by
the Company, including reconciliation to the nearest IFRS measures,
refer to the detailed Non-GAAP performance measure disclosure in the
Management's Discussion and Analysis for the year ended December 31,
2018 filed at www.sedar.com
and on EDGAR at www.sec.gov.

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