new gold corporate presentation
TRANSCRIPT
New Gold Corporate Presentation
RBC Global Mining and Materials ConferenceNovember 16 - 17, 2020
Cautionary Statements
2
ALL AMOUNTS IN U.S. DOLLARS UNLESS OTHERWISE STATED
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSCertain information contained in this presentation, including any information relating to New Gold's future financial or operating performance is "forward looking". Allstatements in this presentation, 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 presentation include, among others, statements with respect to: the receipt ofC$50 million cash payment from Artemis Gold Inc. (“Artemis”) in August 2021 for the divestment of the Blackwater Project; New Gold’s expectations relating to achievingthe revised annual production guidance at the Rainy River Mine and the New Afton Mine; New Gold’s expectations with respect to the operating expenses, cash costs,AISC and sustaining capital at the Rainy River Mine and the New Afton Mine for 2020; the timing and scope of the planned exploration drilling programs at the Rainy RiverMine and Cherry Creek; the timing of completion and parameters for capital and construction projects at the Rainy River Mine and the New Afton Mine; New Gold’sexpectation relating to the start of mining at the Rainy River Mine; New Gold’s expectations with respect to the key construction projects at the Rainy River Mine; NewGold’s expectations with respect to the key capital projects at the New Afton Mine, including the B3 mine development, C-Zone development and TAT construction; thetiming of receipt of permits at the New Afton Mine; the timing of delivery of the thickener at the New Afton Mine; the expected mill production, production costs, economics,and operating parameters of New Afton and Rainy River; planned activities, exploration potential, permitting timelines and plans for capital expenditures at New Afton andRainy River for 2020 and 2021; the anticipated effect of the COVID-19 pandemic on New Gold’s operations, supply chain continuity and financial status; New Gold beingable to maintain its level of operations and supply chain continuity during the COVID-19 pandemic and New Gold’s financial resources being sufficient to support operationsduring the COVID-19 pandemic; information and statements on slide 13 “Rainy River: Underground Mine Life Extension”; information and statements on slide 17“Exploration Potential Near Mine and District”, including the exploration potential of the sub-level cave (“SLC”), D-Zone and Cherry Creek at the New Afton Mine;information and statements on slide 18 “New Gold: A Profitable Path Forward”’; information and statements on slide 21 “New Afton Mine Milestones and Timeline”, includingthe expected amount of free cash flow (“FCF”) resulting from unlocking the potential of the C-Zone; information and statements on slide 23 “2020 Revised Guidance”; thegrades expected at New Afton for 2020 and 2021; the expected amount of FCF and after tax net present value (“NPV”) resulting from New Afton and Rainy River based onthe life of mine plans; Ontario Teachers’ (as defined below) exercising its Conversion Option; and all estimations of the Mineral Reserves and Mineral Resources at RainyRiver and New Afton, including the information on slides 26 to 29 “Mineral Reserves and Resources”.
All forward-looking statements in this presentation are based on the opinions and estimates of management as of the date such statements are made and are subject toimportant risk factors and uncertainties, many of which are beyond New Gold's ability to control or predict. Certain material assumptions regarding such forward-lookingstatements are discussed in this presentation, New Gold's latest annual management's discussion and analysis ("MD&A"), Annual Information Form and Technical Reportsfiled 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-lookingstatements in this presentation are also subject to the following assumptions: (1) there being no significant disruptions affecting New Gold's operations; (2) political and legaldevelopments in jurisdictions where New Gold operates, or may in the future operate, being consistent with New Gold's current expectations; (3) the accuracy of NewGold'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 MexicanPeso, being approximately consistent with current levels; (5) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent withcurrent levels; (6) equipment, labour and materials costs increasing on a basis consistent with New Gold's current expectations; (7) arrangements with First Nations andother Aboriginal groups in respect of the Rainy River and New Afton being consistent with New Gold's current expectations, particularly in the context of the outbreak ofCOVID-19; (8) all required permits, licenses and authorizations being obtained from the relevant governments and other relevant stakeholders within the expected timelinesand the absence of material negative comments during the applicable regulatory processes; (9) metals and other commodity prices and exchange rates, specifically for theupdated life of mine plans, gold and silver prices as indicated throughout the presentation and foreign exchange rates being as indicated throughout the presentation; (10)the Company’s ability to implement the new life of mine plans on the timing described herein or at all; (11) there being no new cases of COVID-19 in New Gold’s workforceat either the Rainy River or New Afton mine and the assumption that no additional members of the workforce are expected to be required to self-isolate due to cross-bordertravel to the United States or any other country; (12) there being no material disruption to New Gold’s supply chains and workforce that would interfere with New Goldrelated to COVID-19 , including the completion of key capital and construction projects and the commencement and completion of the planned exploration drilling programsat the Rainy River Mine and the New Afton Mine on the timing described herein or at all; (13) the responses of the relevant governments to the COVID-19 pandemic beingsufficient to contain the impact of the COVID-19 pandemic; (14) there not being a significant economic recession or downturn as a result of the COVID-19 pandemic; and(15) Artemis being able to complete the remaining C$50 million cash payment due on August 24, 2021 for the acquisition of the Blackwater Project.
Cautionary Statements
3
ALL AMOUNTS IN U.S. DOLLARS UNLESS OTHERWISE STATED
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factorsthat 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; pricevolatility 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 currenciesof Canada, the United States and, to a lesser extent, Mexico; discrepancies between actual and estimated production, between actual and estimated mineral reserves andmineral 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 localgovernment 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 mineralexploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary licenses and permits and complying with thepermitting 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 theinfluence 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 Goldis 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 planscontinue to be refined; accidents; labour disputes; defective title to mineral claims or property or contests over claims to mineral properties; unexpected delays and costsinherent to consulting and accommodating rights of Indigenous groups; risks, uncertainties and unanticipated delays associated with obtaining and maintaining necessarylicenses, permits and authorizations and complying with permitting requirements; there being cases of COVID-19 in New Gold’s workforce at either the Rainy River or NewAfton mine, or both; New Gold’s workforce at either the Rainy River mine or the New Afton mine, or both, being required to self-isolate due to cross-border travel to theUnited States or any other country; the responses of the relevant governments to the COVID-19 outbreak not being sufficient to contain the impact of the COVID-19pandemic; the COVID-19 pandemic disrupting New Gold’s supply chain continuity; New Gold’s liquidity not being sufficient to support operations during the COVID-19pandemic or afterwards; disruptions to New Gold’s supply chain and workforce due to the COVID-19 outbreak; an economic recession or downturn as a result of theCOVID-19 outbreak that materially adversely affects New Gold’s operations or liquidity position; there being further shutdowns at the Rainy River or New Afton Mines; NewGold not being able to complete its construction or mine development projects at the Rainy River Mine or the New Afton Mine on the timing described herein or at all; NewGold not being able to commence or complete the planned exploration drilling programs at the Rainy River Mine and Cherry Creek on the timing described herein or at all;Artemis being able to complete the remaining C$50 million cash payment due on August 24, 2021 for the acquisition of the Blackwater Project; and New Gold experiencinga material delay in completing all non-recurring capital projects at Rainy River and New Afton. In addition, there are risks and hazards associated with the business ofmineral 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 inadequateinsurance 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 disclosuredocuments 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 actualresults and future events could materially differ from those anticipated in such statements. All of the forward-looking statements contained in this presentation are qualifiedby these cautionary statements. New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of newinformation, events or otherwise, except in accordance with applicable securities laws.
For further information on the Company’s response to COVID-19, please refer to: https://www.newgold.com/covid-19/
Committed to Responsible Mining
Environment
• 90% recycled water use across
operations
• Conduct climate risk assessments
on operations and corporate office
on an annual basis
• Tailings management is overseen
by an independent review board to
assess management practices,
systems and overall tailings systems
at all operations
• Increased water management
procedures at site
• Conduct GHG audit on full
operations on an annual basis to
understand where we can decrease
GHG emissions
• Operations focus on local
procurement when possible to
provide economic value to local
communities
• Actively support Indigenous
education programs for K-12 and
post secondary opportunities for
Indigenous communities
• Identify our Communities of Interest
on an annual basis to ensure
effective and meaningful engagement
• Frequent and transparent
communication with Indigenous
Leadership to share updates,
upcoming changes or need for
support
• Board Committee that oversees
Technical Operations and
Sustainability
• CEO accountable for Sustainability
• Director of Sustainability responsible
for strategy development and
working with sites
• Site GMs, Community & Enviro
Managers responsible for site-based
activities, regulators and priorities
• Community and Enviro teams
implement plans
Social Governance
4
Building a Canadian Focused Multi-Asset Company
5
Rainy River Mine: Ontario, Canada• Open pit and underground mine in northernOntario
• FCF beginning in 2021 and over LoM: ImprovedNPV
• Open pit mining HG/MG ore via a smaller, moreprofitable pitshell
• Underground evaluated on a per zone basis forprofitability with potential for mine lifeextension
• Life of Mine FCF1 of ~$1.1B
• Exploration drilling expected to be launched in Q4 to test potential on broader land package
New Afton Mine: B.C., Canada
• Low cost producer in B.C. that drives free cash flow
• Updated LoM technical and cost update of anintegrated
B3/C-Zone optimization; mine life extension to2030
• C-Zone developmentunderway; self-funded approach
• Life of Mine FCF1,2 of ~$1.2B
• Phase 1 Cherry Creek drilling program (up to 10,000 m) started
at the end of October that will focus on the 12 kilometre trend,
located within 3km of mill
Blackwater (Artemis Gold): 8% Gold Stream
• 8% stream on first 280,000 gold oz. declining to 4% on
remaining production and 6% equity position
• PFS released Aug/20: Total gold production of ~8moz with
~450koz delivered to New Gold via gold stream
Rainy River Gold Mine
Open pit & underground mine
Located near Ft. Frances, ON
New Afton Copper/Gold Mine
Underground block cave mine
Located near Kamloops, BC
Blackwater Gold Stream
8% Gold StreamOwner: Artemis Gold (100%)
Open pit project near Prince George, BC
Cerro San Pedro Gold/Silver Mine
Reclamation underway
Average Annual Production of ~402 koz gold and 63 Mlbs copper (2021-2025)
1. Assuming $1,550/oz gold, $3.00/lb copper and $17.50/oz silver USD/CAD exchange rate of C$1.30 to US$1.00.
2. Excludes Ontario Teachers’ Pension Plan’s New Afton free cash flow interest (refer to Feb. 25, 2020 press release)
Adequateliquidity to redeem the
2025 Senior Notes
Capital Structure and Strong Liquidity Position
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1. Approximately $45 million of $350 million facility is currently used for Letters of Credit related to mine closure costs.
Disciplined approach to improving liquidity:
• C$150M equity financing (August 30,2019)
• $300M partnership with Ontario Teachers' Pension Plan
(March 31, 2020). ~$200M potential paydown of 2025 notes
• $400M senior notes offering at 7.50% funded redemption of 2022 notes
(closed June 24, 2020 and July 10, 2020)
• C$190M cash proceeds from divestment of Blackwater Project
(closed August 21, 2020); C$140M Aug. 2020 / C$50M Aug. 2021
• ~$90M in Letters of Credit transferred to surety bonds (Q3 2020)1
• Credit facility extended to October 2023 with a capacity of $350M
(closed October 9, 2020)
New Gold Debt Structure
Face Value ($M) Maturity Interest Rate
Revolving Credit Facility $3501 Oct. 2023 LIBOR + 2.75% - 4.25%
Senior Unsecured Notes $300 May 2025 6.375%
Senior Unsecured Notes $400 July 2027 7.50%
~$720MShort Term
Liquidity
2020 Gold HedgingProgram
Term Quantity Floor Ceiling
October 2020 - Dec 2020 16 koz/ per month $1,300/oz $1,415/oz
Cash & Cash Eq.
~$415M
Credit facility
available liquidity
of ~$305m(1)
5 Year Financial and Operating Outlook (2021-2025)
Operational Improvements:
• Diligent focus on operational and cost optimization drives
production growth and improved margins
• 26% increase in production (2020 – 2025) to ~550k gold eq.
oz. driven by the ramp-up of Rainy River and production from
the New Afton C-Zone
• Major capital programs at Rainy River complete, New Afton
C-Zone development based on a self-funded approach
• Consistent year-over-year reduction in consolidated AISC* to
~$800 per gold eq. oz. by 2025
Financial Outlook:
• Restructured balance sheet with key transactions completed
• ~$1.5B1,2 in free cash flow generated over the next 5 years
(2021 - 2025)
• Ample liquidity and free cash flow* generation to redeem the
2025 Senior Notes at maturity
7
1. Based on the March 2020 NI 43-101 technical report filed on SEDAR and assuming current consensus long-term
commodity pricing (US$1,800/oz Au, US$2.80/lb Cu, US$20/oz Ag and a USD/CAD rate of 1.33).
2. Free cash flow defined as operating cash flow, less capital expenditures, streaming and royalty costs, including the
Ontario Teachers’ Pension Plan free cash flow interest.
*Refer to the “Non-GAAP Performance Measures” section of this presentation.
Operational Estimates Rainy River New Afton2020 Revised
Consolidated Guidance
Gold Produced (ounces) 222,000 - 232,000 62,000 - 72,000 284,000 - 304,000
Copper Produced (Mlbs) - 65 - 75 65 - 75
Gold Eq. Produced (ounces)1 225,000 - 235,000 190,000 - 220,000 415,000 - 455,000
Operating expense per gold eq. ounce1,4 $920 - $980 $630 - $710 $780 - $860
Cash Costs per gold eq. ounce1,4 $920 - $980 $740 - $820 $830 - $910
Corporate G&A per gold eq. ounce1 - - $35 - $45
Depreciation and depletion per gold eq. ounce1 $540 - $600 $240 - $300 $400 - $460
All-in Sustaining Costs per gold eq. ounce1,4 $1,610 - $1,690 $1,080 - $1,160 $1,410 - $1,490
Capital Investment & Exploration Expense Estimates
Sustaining Capital & Sustaining Leases ($M)4 $145 - $160 $62 - $72 $207 - $232
Growth Capital ($M)2,4 $2 - $5 $70 - $85 $82 - $102
Exploration ($M)3 ~$2 $4 - 8 $7 - 12
1. Gold equivalent ounces includes approximately 285,000 to 305,000 ounces of silver at Rainy River and approximately 295,000 to 315,000 ounces of silver at New Afton.
2. Consolidated growth capital includes $10-$12 million for Blackwater.
3. Exploration expense includes $1-$2 million for Corporate
4. The revised operational outlook does not include any potential future receivable under the Canadian Emergency Wage Subsidy, which has been extended until December 2020.
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Rainy River Outlook
• Production estimates for the year have been lowered, primarily related to the impact of COVID-19 in the first half of the year, resulting in lower
tonnes and slightly lower grades milled for the full year.
• Cash costs and operating expense per gold eq. ounce for the year have been slightly increased primarily due to lower sales.
• Total capital for the year has increased by less than $10 million due to a portion of the Tailings Management Area construction that was originally
scheduled for completion in 2021, now planned for completion in 2020.
New Afton Outlook
• Gold and copper production estimates for the year have been lowered, primarily due to lower than planned gold and copper grades.
• Cash costs and operating expense per gold eq. ounce for the year are expected to increase, primarily due to lower sales.
• Total capital estimates remain consistent with original estimates, and it is expected that all planned capital projects will be completed in the
second half of the year.
In 2020, the Company reports production on a gold eq. basis as well as on a per-metal basis. Cash costs and AISC will be reported on a per gold eq. ounce basis.
Throughout the year the Company will report gold eq. ounces using a constant ratio of $1,500 per gold ounce, $17.75 per silver ounce and $2.85 per pound copper,
and a foreign exchange rate of 1.35 Canadian dollars to the US dollar.
2020 Revised Guidance
Rainy River: Operational Highlights
• Mine and mill productivity operating at capacity with unit
costs trending towards 2021 target levels and all key capital
projects substantially complete
• Another consecutive quarter of strong performance shifts
focus to driving additional operational and cost efficiencies
• Production expected to achieve mid-range of guidance;
operating expense and cash costs at or below guidance
• Sustaining capital expected at low end of guidance; AISC
below guidance due to lower costs and capital spend
• Decline development towards the underground Intrepid
Zone resumed; Underground production remains on track
for 2022
• NE Trend exploration drilling will be launched in Q4 9
Q3 Highlights: Another Strong Quarter
1. Gold eq. ounces for Rainy River in Q3 2020 includes 102,814 ounces of silver converted to a gold eq. based
on a ratio of $1,500 per gold ounce and $17.75 per silver ounce.
2. Refer to the “Non-GAAP Performance Measures” section of this presentation.
Production Q3 2020 9M 20202020
REVISED GUIDANCE
Gold Production (oz) 63,004 162,185 222,000 - 232,000
Gold eq. Production (oz)1,2 64,221 164,960 225,000 - 235,000
Operating Costs Q3 2020 9M 20202020
REVISED GUIDANCE
Cash costs per gold eq. oz. 2 833 924 920 - 980
AISC per gold eq. oz.2 1,469 1,593 1,610 - 1,690
H1 results include a 14-day voluntary COVID-19 suspension
Capital & Exploration ($M) Q3 2020 9M 20202020
REVISED GUIDANCE
Sustaining Capital & sustaining
leases2 37.4 103.9 $145 - $160
Growth Capital2 0.1 0.3 $2 - $5
Exploration 0.2 0.5 ~$2
Rainy River Life of Mine Highlights
2020 NI 43-101 Technical Report
LoM1 Consensus2
Total gold eq. production (k oz) 2,384 2,383
Avg. annual gold eq. production (k oz) 289 289
Cash costs per gold eq. oz. ($/oz) $670 $672
AISC per gold eq. oz. ($/oz) $973 $968
Sustaining capital ($M) 3 $586 $573
Growth capital ($M) 3 $56 $55
Cumulative total cash flow ($M)4 $1,096 $1,636
After-tax NPV 5% $858 $1,305
1. Assuming $1,550 per gold oz, $17.50 per silver oz and a foreign exchange rate of 1.30 C$ to 1 US$
2. Assumes consensus long-term pricing (US$1,800/oz Au, US$20/oz Ag and a USD/CAD rate of 1.33)
3. Sustaining and Growth Capital spend excludes working capital movements
4. LOM value includes a negative cash flow of $68 million post 2028 primarily for closure activities
Totals may not compute exactly due to rounding.
An open pit and underground operation located in
northern Ontario
2018 2019 Q3 2020 2020
Target
Tonnes mined per day
(ore and waste)
2018 2019 Q3 2020 2020
Target
Tonnes milled per
calendar day
Q3 Operational Highlights
Rainy River Mine – KPI Dashboard (Sept. 30, 2020)
10
2018 2019 9M 2020 2021
Target
Unit Costs ($/t)1,2
Open Pit, Mill & G&A
• Rapid COVID-19 testing devices procured for
daily testing; mine site currently COVID-19 free
• Open pit mine ramping up towards 2021 target
capacity of ~150k tpd with ~146k tpd in Q3
(97% of 2021 target)
• Mill achieved a record ~27k tpd, the maximum
allowable under the current permit
• Mine and mill operating at capacity, focus now
shifts to optimize recovery and unit cost
performance
• Unit costs trending towards 2021 target
• Lower planned strip ratio of 2.99 in Q3
• Overall grade is expected to continue to improve
in Q4 as mining moves to higher grade zones
• YTD mill availability (90%) in-line with plan and
recoveries (90%) slightly ahead of plan, despite
lower grades processed
2018 2019 9M 2020 2021
Target
Open Pit Mining costs1
($/t mined)
1. 9M 2020 unit costs are inclusive of the Canada Emergency Wage Subsidy.
2. Open pit mine unit costs presented on a per tonne mined basis, mill and G&A unit costs presented on per tonne processed basis
Rainy River: Underground Mine Life Extension
• Significant potential for underground Resource to Reserve
conversion at higher gold price (current reserves at
$1,275/oz.) used for underground; Approx. 1.7M gold
ounces in underground M&I Resources category*
• Underground Reserve growth to be supported by milling
scenario to accommodate underground standalone scenario
Grey areas indicate
potential new mining areas
• Higher grade underground ore will be blended with low grade
stockpile for batch processing to optimize mill productivity up
to 2028; underground standalone scenario thereafter
• Underground access from Intrepid portal and 4 open pit
portals; reduces underground development capital
• Decline towards Intrepid zone resumed; 150 of 550 m
completed to date; refinement of long-hole mining
methodology planned for 2021; On target for 2022 production
Underground Mine Growth with Potential Reserve Conversion
11*See the 2019 Mineral Reserves and Mineral Resources at the end of this presentation.
• Leverage technology to
optimize performance
• Focus on continuous
improvement; increased
effective hours of equipment
• Enhance maintenance practices
Rainy River – Operating Excellence
12
• Maximize mill throughput to
maximum permit limit
• Improve recoveries through
continued optimization;
optimized grind, gravity
circuit and ore type
scenarios
• Optimize effective hours
• Implement cost driver
strategy; operational &
procurement approach
• Create a culture that
encourages innovation and
positive change
• Optimization of capital
management practices
Mine Performance Mill Performance Cost Control
Rainy River Exploration Program
NE Trend Target:
• Results of the exploration reconnaissance work completed
in 2019 within ~15 km regional structural corridor defined
• Two broader areas with coincident geochemical and
geophysical anomalism for first pass exploration drilling
• Phase 1 of an 8,000 m exploration drilling program will be
launched in Q4
13
New Afton Mine: Operational Highlights
14
1. Gold eq. oz. for Q3 2020 includes 18.2 lbs of copper and 69,011 silver oz. converted to a gold eq. based on
a ratio of $1,500/oz. gold, $2.85/lb copper and $17.75/oz. silver.
2. Refer to the “Non-GAAP Performance Measures” section of this presentation.
Production Q3 2020 9M 20202020
REVISED GUIDANCE
Gold Production (oz) 15,955 47,858 62,000 - 72,000
Copper Production (Mlb) 18.2 53.6 65 - 75
Gold eq. Production (oz)1 51,315 152,090 190,000 -220,000
Operating Costs Q3 2020 9M 20202020
REVISED GUIDANCE
Operating expense per gold eq. oz 708 640 630 - 710
Cash costs per gold eq. oz. 2 807 742 740 - 820
AISC per gold eq. oz.2 988 971 1,080 - 1,160
An underground block cave operation located in B.C.
Q3 2020 and Recent Highlights
• On track to achieve mid-range of guidance with AISC expected to be
at or below revised guidance due to lower sustaining capital spend;
Sustaining and growth capital tracking to below guidance
• B3 development refocused in Q3 to east cave recovery areas;
accelerated B3 development Q4/Q1 2021 shifts ~$10M sustaining
capital to 2021; B3 production remains on schedule for H2 2022
• C-Zone TAT project advanced; Thickener construction and other
COVID-19 delays shift ~$20M of growth capital to 2021. Thickener
delivery expected in Q1 2021 and C-Zone production remains on
schedule for H2 2023
• New access into east cave recovery area with ultimate target rate of
4,000 tpd (initial 1,400 tpd); Consistent grades expected for Q4 2020
• Key portion of water and Phase 1 TAT permits received; B3 permit on
schedule; C-zone permits submission in Q4.
• Cherry Creek exploration drilling program (10,000m) launched in Q4
Capital & Exploration ($M) Q3 2020 9M 20202020
REVISED GUIDANCE
Sustaining Capital & sustaining
leases 2 8.7 32.0 $62 - $72
Growth Capital 2 16.1 37.2 $70 - $85
Exploration 0.4 3.0 $4 - $8
New Afton Life of Mine Highlights
2020 NI 43-101 Technical Report
LoM1 Consensus2
Avg. annual gold eq. production (k oz)* 233 213
Cash costs per gold eq. oz. ($/oz)* $681 $746
AISC per gold eq. oz. ($/oz)* $761 $832
Sustaining capital ($M)3 $175 $171
Growth capital ($M)3 $460 $450
Cumulative total cash flow ($M)4,5 $1,216 $1,351
After-tax NPV5% $863 $978
1.Assuming $1,550/oz gold, $17.50/oz silver, $3.00/lb copper and a USD/CAD rate of 1.30 C$ to1 US$2.Assumes current consensus long-term commodity pricing of US$1,800/oz gold, US$3.00/lb copper,
US$20/oz silver and a USD/CAD rate of 1.333.Sustaining and Growth Capital spend excludes working capital movement
4.LOM value includes a negative cash flow of $9M primarily for closure activities offset by salvage values
5.Life of Mine free cash flow estimates are exclusive of Ontario Teachers’ Pension Plan free cash flow
interest (refer to Feb. 25, 2020 press release)
*Refer to the “Non-GAAP Performance Measures” section of this presentation.
New Afton Mine – KPI Dashboard (Sept 30, 2020)
• Mine productivity of ~17.3k tpd, above planned levels
• Mill processed ~15.5k tpd with gold and copper recoveries
of 80% and 82%, respectively, with mill availability at 98%,
in-line with plan.
• B3/C-Zone development advanced by 1,150 m, achieving
92% of planned levels YTD; B3 crew redeployed to the east
cave for a portion of Q3
• Overall B3/C-Zone execution remains on schedule
– C-Zone development at, slightly above 9M target
– Accelerated B3 development in Q4 and Q1 2021; B3
production remains on schedule for H2 2021
15
Q3 2020 Operational Highlights
• The 2020 and 2021 mine plans incorporate multiple
sources of ore from the east and west cave
• New access point into the east cave recovery zone was
completed in Q3, supporting an initial extraction rate of
1,400 tpd, with an ultimate target of 4,000 tpd
• 10,000 metre Phase 1 of the Cherry Creek Trend drilling
program launched late October to evaluate ~12 km trend
of prospective geochemical and geophysical anomalies
located ~3 km from New Afton mill
1,287
2,3482,436
2,849
B3 Zone C-Zone
YTD Mine Development
B3/C-Zone (m) vs. 2020 Target
32.037.2
67.0
77.5
Sustaining Capital Growth Capital
YTD Capital vs Target* ($M)(*mid-range of revised guidance)
2018 2019 9M 2020 2020 Target
UG Mine Unit Costs1
($/t mined)
2018 2019 9M 2020 2020 Target
Unit Cost1,2 Performance ($/t)
Underground, Mill & G&A
1. 9M 2020 unit costs are inclusive of the Canada Emergency Wage Subsidy.
2. Underground mine unit costs presented on a per tonne mined basis, mill and G&A unit costs
presented on per tonne processed basis
New Afton: Operating Excellence
16
Self-Funded C-Zone Mine & Mill Performance Cost Control
• Committed to de-risking C-
Zone development to support
a self-funded approach
• Focus on continuous
improvement; reduced
development cycle times
• Base case at $1,300 gold and
$3.00 copper; significant
upside at spot prices
• Optimize Lift 1 and B3-Zone
production (2020-2023)
• Leverage technology to
optimize mine and mill
performance; autonomous
scoops and mill process
controls; electrification of C-
Zone
• Focus on continuous
improvement
• Improved recoveries; ultra-
fine material
• Enhanced mine and mill
maintenance practices
• Leverage robust contract and
procurement strategies
• Foster a culture that
encourages innovation and
positive change
• Optimization of capital
projects and cost
management programs
• Integrated project and
operations teams
Exploration Potential Near Mine and District
SLC Mining Options Evaluated to Add Ore Reserve Inventory to the LOM• Underground drilling delineated and expand mineral resources within and
below the SLC Zone
• Delineated the SLC target area to M&I and added ~3.6M tonnes with average Cu and Au grades in line with the mine ore grade. Additional mineralization defined within the new discovered East Extension Zone, located immediately beneath SLC and parallel to the east of the C and D-Zone mineralization.
• D-Zone Exploration Targeting Scale or Greater Resource Growth
• D-Zone underground drilling testing for additional resources down plunge of the C-Zone reserve
• Testing pinch and swell geometry to verify potential for zone of productive mineralization to re-widen laterally and down plunge.
• Drill intercepts in the upper D-Zone appear to feature good widths and ore grade in line with C-Zone over an approximate 200-250m vertical extent
Preliminary Stages of Testing District Target Potential• Cherry Creek Corridor Target: exploration activities are progressing to drill
targets refinement
• 12 km trend of prospective geochemical and geophysical anomalies located ~3 km from New Afton mill
• 45 line-km geophysical IP survey completed at the end of August 2019
• Geochemical survey completed covering entire trend
• Significant near-surface epithermal gold and underlying porphyry copper-gold system discovery potential
• Phase 1 Cherry Creek drilling program (10,000 m) launched in late October
17
18
New Gold: A Profitable Path Forward
Rainy River
positioned for
profitable operations
with underground
upside
Optimizing C-Zone
development to support
a self-funded approach
Optimized balance
sheet repositions New
Gold for growth
Growing production and
expanded margins will
drive sustainable free cash
flow
Organic growth
potential through
strategic exploration
programs
Appendix
COVID-19 Business Plan
Employee and community health and safety • The health and safety of our employees and communities remains number one priority
• Full compliance with government and health agency recommendations
• Restricted access to sites; travel restrictions; enhanced sanitization practices; self-isolation; community-
based consultations; optimized plans for transport and employee accommodation; social distancing;
work from home options (see www.newgold.com/covid-19/ for further details)
Supply chain continuity• Supply chain secure for key items; no disruptions to supply anticipated
• Standard inventory items on hand; required quantities being maintained
• Long-lead items remain on schedule
Business continuity plans and Rapid Response Team fully mobilized• Scenario-based business continuity plans in place
• Ramp-down / ramp-up plans as required
• COVID-19 rapid testing devices procured for use at Rainy River. Training and calibration currently underway prior
to rolling out for permanent use.
• Rainy River operations restarted on April 3 utilizing the local workforce; gradual and safe reintroduction of non-
local workforce nearing completion and operations returned to full capacity in early Q3
Financial status• Sufficient liquidity to support operations during this crisis; Approx. $720M in available liquidity
• 90-95% of costs are denominated in Canadian dollars (New Afton: 90% / Rainy River 95%)
Suspended site activities• Regional exploration programs to be launched in Q4
20
Ontario Teachers' Pension Plan Transaction
Terms
Completed $300M strategic partnership with Ontario Teachers’ Pension Plan (March 31, 2020)
• Improved balance sheet with significantly enhanced liquidity of ~$600million
• Financial flexibility and debt reductionopportunities
Transaction
• New Gold has entered into a strategic partnership with Ontario Teachers’ Pension Plan (“Ontario Teachers’”) with the following terms (the “Transaction”):
• First 4 years – 46% Free Cash Flow Interest (“FCF Interest”) in NewAfton
• After 4 years – Ontario Teachers’ has an option (“Conversion Option”) to convert into a 46% joint venture in New Afton (“JV Interest”); if Ontario Teachers’ does not convert into the JV Interest, the FCF Interest in New Afton will be reduced to 42.5% (“Reduced FCF Interest”)
Buyback Option• During the exercise period of the Conversion Option, New Gold holds an overriding buyback option to repurchase
100% of Ontario Teachers’ interest in New Afton at the greater of an agreed upon IRR or the fair market value at that time
Exploration Claims• New Gold will retain 100% of the exploration claims outside of the New Afton mining permit. Ontario Teachers’
has an option to acquire its proportionate share of these claims upon conversion into the JV Interest
Key Transfer Rights • New Gold and Ontario Teachers' will hold a mutual right of first offer for the life of theagreements
Governance
• As a strategic partner, Ontario Teachers’ will have certain governance rights
• Upon conversion into the JV Interest, Ontario Teachers’ will receive customary joint venture governancerights
21
Divestment of Blackwater
• Marks another milestone in the re-positioning of
New Gold to create a Canadian-focused,
diversified intermediate gold producer
• Further enhances balance sheet with upfront
cash payment, providing additional flexibility
• Retains exposure to Blackwater project via an
equity position and gold stream on production
• Blackwater becomes a core focus of a dedicated
management team with a proven track record
that can unlock its potential
• Surfacing value for Blackwater now positions
New Gold to transition to the next phase of the
company’s growth plan
22
Key Transaction Terms
Transaction⚫ Definitive agreement to sell New Gold’s 100% interest in
Blackwater to Artemis Gold Inc.
Consideration
⚫ C$190 million in cash, comprised of C$140 million in cash
upon closing of the Transaction and C$50 million in cash
payable twelve months following closing of the
Transaction
⚫ C$20 million in Artemis shares (not to exceed 9.9%);
terms and price consistent with Artemis’ Transaction
Financing
⚫ Gold stream on 8% gold produced from Blackwater,
reducing to 4% of gold production once approximately
280,000 ounces of gold have been delivered, with a
transfer price equal to 35% of the spot gold price
Transaction
Financing
⚫ Artemis intends to fund the initial cash payment through a
combination of cash on hand and an equity financing that
is fully backstopped by Artemis insiders
Approvals &
Conditions
⚫ Customary closing conditions, including Artemis
shareholder approval and required regulatory approvals
Closing ⚫ Closed August 24, 2020
Transaction Highlights
New Afton Mining Areas (H1 2020)
• In H1 2020, higher than expected dilution was experienced in portions of the east and west caves as well
as lower than planned rehabilitation and pillar recovery productivities, all of which contributed to lower
grades mined.
• Lower copper and gold grades are expected from the east and west caves over the balance of 2020 and
potentially into 2021.
• It is not expected that the lower grades currently being experienced in the east and west cave zones will
be encountered in the SLC, B3 and C-Zones.
23
C-Zone Development (2019 - H1 2023)
B3 Zone Development (2019-H1 2021) B3 Production (H2 2021)
TAT Construction – Q2 2020 / Commissioned Q2 2022
NATSF Stabilization
(Q2 2021-Q3 2022)HATSF Stabilization
(Q4 2023 - Q3 2024)
C-Zone Production (H2 2023-H1-2030)
2019H1
2020H2
2020H1
2021H2
2021H1
2022H2
2022H1
2023H2
2023H1
2024H2
20242025-2030
New Afton Mine Milestones and Timeline
24
TAT Phase 1&2
Permits
(H2 20)
C-Zone Permit
(H2 21)
B3 Permit
(H1 21)Key Permits
• B3/C-Zone development advancing and on track with
plan
• B3 production to come online in H1 2021 and transition
to C-Zone in H2 2023
• C-Zone drives cumulative FCF of ~$500M over ~7-year
mine life
• Thickened and amended tailings (TAT) for
stabilization of current tailings facility
• C-Zone tailings deposition into historical Afton open
pit (HATSF)
• Key permits and amendments remain on track
Mineral Reserves and ResourcesMineral Reserves Statement as at December 31, 2019
Proven & Probable Metal grade Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
Open Pit Mineral Reserves
Direct Processing
Proven 15,700 1.21 2.4 - 612 1,187 -
Probable 30,675 1.15 2.5 - 1,136 2,416 -
Open Pit P&P (direct proc.) 46,375 1.17 2.4 - 1,748 3,602 -
Low grade
Proven 5,702 0.35 1.9 - 65 341 -
Probable 15,470 0.35 2.2 - 172 1,076 -
Open Pit P&P (low grade) 21,172 0.35 2.1 - 237 1,417 -
Stockpile
Proven 5,928 0.53 1.1 - 102 211 -
Probable - - - - - - -
Open Pit P&P (stockpile) 5,928 0.53 1.1 - 102 211 -
Open Pit P&P Total Mineral Reserves 73,476 0.88 2.2 - 2,087 5,231 -
Underground
Proven - - - - - - -
Probable 4,096 4.17 7.8 - 549 1,034 -
Underground P&P (direct proc.) 4,096 4.17 7.8 - 549 1,034 -
Combined Direct proc. &Low grade
Proven 27,331 0.88 2.0 - 779 1,740 -
Probable 50,240 1.15 2.8 - 1,857 4,526 -
Total Rainy River MineralReserves 77,572 1.06 2.5 - 2,636 6,265 -
25
Mineral Reserves and Resources
Proven & Probable Metal grade Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
NEW AFTON
A&B Zones
Proven - - - - - - -
Probable 20,213 0.55 1.9 0.73 357 1,234 323
C Zone
Proven - - - - - - -
Probable 27,088 0.74 1.8 0.80 648 1,610 478
Total New Afton Total Mineral Reserves 47,302 0.66 1.9 0.77 1,005 2,844 802
TOTAL PROVEN & PROBABLE RESERVES 3,641 9,110 802
Notes to the Mineral Reserve and Mineral Resource estimates are provided below.
26
Mineral Reserves Statement as at December 31, 2019
Measured & Indicated (Exclusive of Reserves) Metal grade Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
High and Medium grade MineralResources
Open Pit
Measured 695 1.46 2.9 - 33 64 -
Indicated 4,813 1.18 3.4 - 182 531 -
Open Pit M&I (High and med. grade) 5,508 1.21 3.4 - 214 596 -
Underground
Measured - - - - - - -
Indicated 14,866 3.49 9.1 - 1,669 4,331 -
Underground M&I 14,866 3.49 9.1 - 1,669 4,331 -
Low grade MineralResources
Open Pit
Measured 293 0.34 1.9 - 3 18 -
Indicated 2,460 0.34 2.2 - 27 175 -
Open Pit M&I (low grade) 2,753 0.34 2.2 - 30 193 -
Combined M&I
Measured 989 1.13 2.6 - 36 82 -
Indicated 22,139 2.64 7.1 - 1,878 5,037 -
Total Rainy RiverM&I 23,127 2.57 6.9 - 1,914 5,120 -
Mineral Reserves and Resources
27
Mineral Reserves Statement as at December 31, 2019
Mineral Reserves and Resources
Measured & Indicated (Exclusive of
Reserves)
Metal grade Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
NEW AFTON
A&B Zones
Measured 17,013 0.63 1.7 0.83 346 940 312
Indicated 9,759 0.44 2.6 0.71 138 825 154
A&B Zone M&I 26,773 0.56 2.1 0.79 484 1,765 466
C-Zone
Measured 6,116 0.78 2.0 0.94 154 401 126
Indicated 12,727 0.71 2.1 0.83 292 852 233
C-Zone M&I 18,843 0.74 2.1 0.86 446 1,254 359
HW Lens
Measured - - - - - - -
Indicated 11,362 0.51 2.0 0.44 187 738 109
HW Lens M&I 11,362 0.51 2.0 0.44 187 738 109
Combined M&I
Measured 23,154 0.67 1.8 0.86 500 1,345 438
Indicated 33,854 0.57 2.2 0.66 617 2,409 495
Total New Afton M&I 57,008 0.61 2.1 0.74 1,118 3,754 933
TOTAL M&I RESOURCES 3,032 8,873 933
Notes to the Mineral Reserve and Mineral Resource estimates are provided below.
28
Mineral Reserves Statement as at December 31, 2019
Mineral Reserves and Resources
Inferred Metal grade Contained metal
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
koz
Silver
koz
Copper
Mlbs
RAINY RIVER
High and Medium gradeResources
Open Pit 2,015 0.61 1.8 - 39 114 -
Underground 1,297 3.76 3.5 - 157 146 -
Total Direct Processing 3,312 1.84 2.4 - 196 260 -
Low grade Resources
Open Pit 167 0.35 1.4 - 2 8 -
Rainy River Inferred 3,479 1.77 2.4 - 198 268 -
NEW AFTON
A&B Zones 6,367 0.34 1.3 0.35 70 272 49
C-Zone 7,650 0.41 1.3 0.47 101 316 71
HW Lens 3 0.49 0.6 0.19 - - -
New Afton Inferred 14,022 0.38 1.3 0.42 172 589 121
TOTAL INFERRED 369 857 121
Notes to the Mineral Reserve andMineral Resource estimates are provided below.
29
Mineral Reserves Statement as at December 31, 2019
Notes to Mineral Reserve and Resource
EstimatesNotes to Mineral Reserve and Resource Estimates
1. New Gold’s Mineral Reserves and Mineral Resources have been estimated in accordance with the CIM standards (2014), which are incorporated by
reference in NI 43-101.
2. All Mineral Reserve and Mineral Resource estimates for New Gold’s properties and projects are effective December 31, 2019.
3. New Gold’s year-end 2019 Mineral Reserves and Mineral Resources have been estimated based on the following metal prices and foreign exchange
(FX) rate criteria:
4. Cut-offs for the Company’s Mineral Reserves and Mineral Resources are outlined in the following table:
Gold
$/ounce
Silver
$/ounce
Copper
$/pound
FX
CAD:USD
Mineral Reserves $1,275 $17.00 $3.00 1.30
Mineral Resources $1,375 $19.00 $3.25 1.30
Mineral PropertyMineral Reserves
Lower Cut-off
Mineral Resources
Lower Cut-off
Rainy River
O/P direct processing:
O/P low grade material:
U/G direct processing:
0.46 – 0.49 g/t AuEq
0.30 g/t AuEq
2.20 g/t AuEq
0.44 – 0.45 g/t AuEq
0.30 g/t AuEq
2.00 g/t AuEq
New AftonMain Zone – B1 & B2 Blocks:
B3 Block & C-Zone
USD$ 21.00/t
USD$ 24.00/tAll Resources 0.40% CuEq
5. New Gold reports its Measured and Indicated Mineral Resources exclusive of Mineral Reserves. Measured and Indicated Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability. Inferred Mineral Resources have a greater amount of uncertainty as to their existence
and technical feasibility, do not have demonstrated economic viability, and are likewise exclusive of Mineral Reserves. Numbers may not add due to
rounding.
30
Notes to Mineral Reserve and Resource
Estimates (cont’d)
6. Mineral Resources are classified as measured, indicated and inferred based on relative levels of confidence in their estimation and on technical and
economic parameters consistent with the methods considered to be most suitable to their potential commercial extraction. The designators ‘open pit’ and
‘underground’ may be used to indicate the envisioned mining method for different portions of a resource. Similarly, the designators ‘direct processing’ and
‘lower grade material’ may be applied to differentiate material envisioned to be mined and processed directly from material to be mined and stored
separately for future processing. Mineral Reserves and Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation,
sociopolitical, marketing and other risks and relevant issues. Additional details regarding Mineral Reserve and Mineral Resource estimation, classification,
reporting parameters, key assumptions and associated risks for each of New Gold’s material properties are provided in the respective NI 43-101 Technical
Reports, which are available at www.sedar.com.
7. The preparation of New Gold's consolidated statement and estimation of Mineral Reserves has been completed under the oversight and review of Mr.
Andrew Croal, Director of Technical Services for the Company. Mr. Croal is a Professional Engineer and member of the Association of Professional
Engineers Ontario. Preparation of New Gold’s consolidated statement and estimation of Mineral Resources has been completed under the oversight and
review of Mr. Michele Della Libera, Director, Exploration for the Company. Mr. Della Libera is a Professional Geoscientist and member of the Association of
Professional Geoscientists of Ontario and of the Engineers and Geoscientists of British Columbia. Mr. Croal and Mr. Della Libera are "Qualified Persons" as
defined by NI 43-101.
31
Endnotes
Information concerning the properties and operations of New Gold has been prepared with Canadian standards for reporting of mineral resource estimates, which differ in some respects
from United States standards. In particular, and without limiting the generality of the foregoing, the terms “inferred mineral resources,” “indicated mineral resources,” “measured mineral
resources” and “mineral resources” used or referenced in this presentation are Canadian mineral disclosure terms as defined in accordance with NI 43-101 under the guidelines set out in
the 2014 Canadian Institute of Mining, Metallurgy and Petroleum Standards for Mineral Resources and Mineral Reserves, Definitions and Guidelines, May 2014 (the “CIM Standards”). Until
recently, the CIM Standards differed significantly from standards in the United States. The U.S. Securities and Exchange Commission (the “SEC”) has adopted amendments to its disclosure
rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the U.S. Securities Exchange Act of 1934, as amended (the
“Exchange Act”). These amendments became effective February 25, 2019 (the “SEC Modernization Rules”) with compliance required for the first fiscal year beginning on or after January 1,
2021. The SEC Modernization Rules replace the historical property disclosure requirements for mining registrants that were included in SEC Industry Guide 7, which will be rescinded from
and after the required compliance date of the SEC Modernization Rules. As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of “measured
mineral resources”, “indicated mineral resources” and “inferred mineral resources”. In addition, the SEC has amended its definitions of “proven mineral reserves” and “probable mineral
reserves” to be “substantially similar” to the corresponding definitions under the CIM Standards, as required under NI 43-101. Accordingly, during this period leading up to the compliance
date of the SEC Modernization Rules, information regarding mineral resources or mineral reserves contained or referenced in this presentation may not be comparable to similar information
made public by United States companies.
Readers are cautioned that “inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the
basis of feasibility or other economic studies, except in limited circumstances. The term “resource” does not equate to the term “reserves”. Readers should not to assume that all or any part
of measured or indicated mineral resources will ever be converted into mineral reserves. Readers are also cautioned not to assume that all or any part of an inferred mineral resource exists,
or is economically or legally mineable.
TECHNICAL INFORMATION
The scientific and technical information relating to Mineral Reserves contained herein has been reviewed, verified and approved by Mr. Andrew Croal, Director, Technical Services of New
Gold. The scientific and technical information relating to Mineral Resources and exploration activities and results contained herein has been reviewed and approved by Mr. Michele Della
Libera Director, Exploration of New Gold. All other scientific and technical information contained herein has been reviewed and approved by the persons named under the heading
“Technical Information and Qualified Persons” with respect to the technical and scientific information noted for each name. Mr. Croal is a Professional Engineer and member of the
Association of Professional Engineers Ontario. Mr. Della Libera is a Professional Geoscientist and a member of Engineers & Geoscientists British Columbia and Professional Geoscientists
Ontario. Mr. Croal, Mr. Della Libera and the persons named under the heading “Technical Information and Qualified Persons” are "Qualified Persons" for the purposes of NI 43-101. No
limitations were imposed on these Qualified Persons with respect to the verification of the data contained herein. Further detail about the mineral resource and reserve estimates, including
assumptions, parameters, risks and data verification measures, are available in the technical reports filed by the Company on www.sedar.com.
32
CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MINERAL
RESERVES AND MINERAL RESOURCES
Non-GAAP Measures
(1) ALL-IN SUSTAINING COSTS
“"All-in sustaining costs” 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 eq. sold to
arrive at a per ounce figure. 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.
(2) SUSTAINING CAPITAL AND SUSTAINING LEASE
"Sustaining capital" is a non-GAAP financial measure as well as “sustaining lease”. New Gold defines sustaining capital as net capital expenditures that are intended to maintain operation of its gold
producing assets. A sustaining lease is similarly a capital lease payment that is sustaining in nature. To determine sustaining capital expenditures, New Gold uses cash flow related to mining interests from
its statement of cash flows and deducts any expenditures that are non-sustaining or growth capital. Management uses sustaining capital and other sustaining costs, to understand the aggregate net
result of the drivers of all-in sustaining costs other than total cash costs. Sustaining capital and sustaining lease are 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.
(3) TOTAL CASH COSTS
"Total cash costs per ounce” is a 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.
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.
(4) FREE CASH FLOW
“Free cash flow” is defined as operating cash flow less sustaining capital expenditures.
(5) GROWTHCAPITAL
"Growth capital" is a non-GAAP financial measure. New Gold terms non-sustaining capital costs to be “growth capital”, which are capital expenditures to develop new operations or capital expenditures
related to major projects at existing operations where these projects will materially increase production. To determine growth capital expenditures, New Gold uses cash flow related to mining interests
from its statement of cash flows and deducts any expenditures that are sustaining capital. Growth capital 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.
Further details regarding non-GAAP financial performance measures and a reconciliation to the nearest IFRS measures are provided in the MD&A accompanying New Gold’s financial statements
filed from time to time on www.sedar.com.
NON-GAAP FINANCIAL PERFORMANCE MEASURES
33