Corporate Governance and Nominating Committee Charter

1. Purpose

   The overall purpose of the Corporate Governance and Nominating Committee (the “Committee”) of the Board of Directors (“Board”) of New Gold Inc. (the “Company”) is to:

   1. provide a focus on corporate governance that will enhance corporate performance,
   2. assist that Company in its corporate governance responsibilities under applicable law; and
   3. to establish criteria for Board and committee membership; to recommend composition of the Board and its committees; and, as circumstances arise, to assess directors’ performance.

2. Composition, Procedures and Organization

   The Committee shall consist of at least three members of the Board, all of whom shall be non management directors, and “independent” as that term is defined in National Instrument 58-101 “Disclosure of Corporate Governance Practices” and under the rules of the applicable exchanges.

   The Board, at its organizational meeting held in conjunction with each annual general meeting of the shareholders, shall appoint the members of the Committee for the ensuing year. The Board may at any time remove or replace any member of the Committee and may fill any vacancy in the Committee.

   Unless the Board shall have appointed a chair (“Chair”) of the Committee, the members of the Committee shall elect a chair from among their number.

   The secretary of the Committee shall be designated from time to time from one of the members of the Committee or, failing that, shall be the Company’s corporate secretary, unless otherwise determined by the Committee.

   The quorum for meetings shall be a majority of the members of the Committee, present in person or by telephone or other telecommunication device that permits all persons participating in the meeting to speak and hear each other.

   The Committee shall have access to such officers and employees of the Company, its external auditors and legal counsel, and to such information respecting the Company, and may engage separate independent counsel and advisors at the expense of the Company, all as it considers to be necessary or advisable in order to perform its duties and responsibilities.

3. Meetings

   The Committee shall meet no less than twice per year and otherwise as necessary. Any member of the Committee may call a meeting of the Committee. The Committee shall hold in camera sessions without the presence of management at each meeting.

4. Duties and Responsibilities

   The duties and responsibilities of the Committee shall be as follows:

   1. to develop and monitor the Company’s overall approach to corporate governance issues and, subject to approval by the Board, to implement and administer a system of corporate governance which reflects superior standards of corporate governance practices;
   2. to periodically review and assess the adequacy of the Company’s corporate governance principles and develop and recommend to the Board for adoption additional or revised principles as appropriate;
   3. to report annually to the Company’s shareholders, through the Company’s annual management proxy circular or annual report to shareholders, on the Company’s system of corporate governance and the operation of its system of governance, having reference to the Corporate Governance Guidelines of the applicable exchanges;
   4. to analyze and report to the Board the relationship of each director to the Company and significant shareholders as to whether such director is an independent director or a non-independent director;
   5. to determine the appropriate committee structure of the Board and, in fulfilling the Committee’s responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee;
   6. to advise the Board or any of the committees of the Board of any corporate governance issues which the Committee determines ought to be considered by the Board or any such committee;
   7. to review with the Board, on a regular basis but not less than annually, the role of the Board, the terms of reference of each of the committees of the Board and the methods and processes by which the Board fulfills its duties and responsibilities, including without limitation:
      1. the number and content of meetings;
      2. the annual schedule of issues to be presented to the Board at its meetings or those of its committees;
      3. material which is to be provided to the directors generally and with respect to meetings of the Board or its committees;
      4. resources available to directors; and
      5. the communication process between the Board and management;
   8. to establish and administer a process (including a review by the full Board and discussion with management) for assessing the effectiveness of the Board as a whole and the committees of the Board (including this Committee) and making recommendations for improving effectiveness;
   9. to propose to the Board, annually, the assignment of members to the committees of the Board and the chair for each committee;
   10. from time to time, as the Committee deems appropriate, to evaluate the size, composition, membership qualifications, scope of authority, responsibilities, reporting obligations and charters of each committee of the Board;
   11. to oversee the evaluation of Board members;
   12. to recommend to the Board a system which enables a committee or an individual director to engage separate independent counsel and advisors at the expense of the Company in appropriate circumstances and, upon the approval by the Board of such a process, to be responsible for the management and administration thereof;
   13. if the Chair of the Board or Vice-Chair is also the Chief Executive Officer of the Company, to establish practices and procedures to permit the Board to act independently, including to approve all agendas for meetings of the Board of Directors and to act as a forum for, together with the Management Committee, concerns of individual directors regarding matters not readily or easily brought to a full Board meeting for discussion,
   14. in consultation with the Board to establish criteria for Board membership and recommend Board composition;
   15. as circumstances require, to assess the performance and contribution of individual directors; and
   16. to propose to the Board, annually, the members proposed for re-election to the Board and identify and recommend new nominees for the Board.

5. Chair of the Committee

   The Chair of the Committee:

   1. provides leadership to the Committee with respect to its functions as described in this Charter and as otherwise may be appropriate, including overseeing the logistics of the operations of the Committee;
   2. chairs meetings of the Committee, unless not present, including in camera sessions, and reports to the Board of Directors following each meeting of the Committee on the findings, activities and any recommendations of the Committee;
   3. ensures that the Committee meets on a regular basis and at least twice per year;
   4. in consultation with the Chair of the Board and the Committee members, establishes a calendar for holding meetings of the Committee;
   5. establishes the agenda for each meeting of the Committee, with input from other Committee members, the Chair of the Board, and any other parties as applicable;
   6. acts as liaison and maintains communication with the Chair of the Board and the Board to optimize and co-ordinate input from Board members, and to optimize the effectiveness of the Committee. This includes reporting to the full Board on all proceedings and deliberations of the Committee at the first meeting of the Board after each Committee meeting and at such other times and in such manner as the Committee considers advisable;
   7. reports annually to the Board on the role of the Committee and the effectiveness of the Committee role in contributing to the objectives and responsibilities of the Board as a whole;
   8. ensures that the members of the Committee understand and discharge their duties and obligations;
   9. fosters ethical and responsible decision making by the Committee and its individual members;
   10. ensures that resources and expertise are available to the Committee so that it may conduct its work effectively and efficiently and pre-approves work to be done for the Committee by consultants;
   11. facilitates effective communication between members of the Committee and management; and
   12. performs such other duties and responsibilities as may be delegated to the Chair by the Board of Directors from time to time.

The Committee will periodically (at least annually) review this policy and the Company’s Articles in light of existing corporate governance trends, and recommend any proposed changes for adoption by the Board or submission by the Board to the Company’s shareholders.

Adopted by the Board on July 8, 2008.