NewGold Press Releases

New Gold Announces 62% Increase in Gold Production in Second Quarter of 2010

Tue, 20 Jul 2010 08:00:00 -0400

(All figures are in US dollars unless otherwise indicated)

VANCOUVER, July 20 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX:NGD) today announces an update on the second quarter performance of the company's three operating assets with 2010 second quarter gold sales of 82,402 ounces at a total cash cost(1) of $490 per ounce, net of by-product sales. The preliminary production, sales and total cash cost(1) information provided are approximate figures and may differ slightly from the second quarter earnings results.

Second Quarter Highlights

Results presented below are for the period of ownership of the Mesquite Mine (June 1, 2009).

    <<
    -   Gold production increased 62% to 89,919 ounces from 55,633 ounces in
        the same period in 2009
    -   Gold sales increased by 56% to 82,402 ounces from 52,890 ounces in
        the same period in 2009
    -   Cash balance increased by $32 million from the end of the first
        quarter to $376 million at June 30, 2010
    >>

All three of the company's operating mines, Mesquite, Cerro San Pedro and Peak, had strong production quarters with gold, silver and copper production all contributing meaningfully to the company's cash flow. Cerro San Pedro's results continue to demonstrate the flexibility of the operation and the ability of the mine to ramp-up production quickly and efficiently. The Cerro San Pedro mine is currently fully operational and New Gold will continue to pursue all avenues necessary such that the mine remains in continuous operation for the benefit of our shareholders, the mine's local employees and surrounding communities.

"We are very pleased with the operating performance at all of our mines during the first half of 2010," stated Robert Gallagher, President and Chief Executive Officer. "With further increases in gold production and decreases in cash cost anticipated, we expect the second half of 2010 to be an exciting one for New Gold."

Operations Overview

Historical figures presented below include gold production, sales and total cash cost(1) for the first six months of 2009 which includes results prior to the closure of the acquisition of Western Goldfields Inc. and the Mesquite Mine on June 1, 2009.

Mesquite Mine Continues Strong Quarterly Production Growth

Gold sales in the second quarter at Mesquite increased by 42% to 38,786 ounces from 27,338 ounces sold in the second quarter of 2009. Gold production was 38,849 ounces compared to 26,085 ounces. The increased gold sales and production at Mesquite during the second quarter were primarily driven by a lower waste mining requirement resulting in higher ore tonnes mined when compared to the second quarter of 2009, as well as continued improvement in gold recoveries. These benefits were partially offset by mining of ore below reserve grade, as planned, in the second quarter of 2010.

Total cash cost(1) per ounce of gold sold for the second quarter of 2010 was $634 compared to $647 in the same quarter of 2009. The total cash cost(1) decrease is attributable to certain costs incurred in the second quarter of 2009, including those related to the change-over of tires and other one-time maintenance costs, which did not occur in the second quarter of 2010. This benefit was partially offset by higher consumables cost in the second quarter of 2010, primarily related to the increased price and consumption of diesel, when compared to the same period in the prior year.

For the six months ended June 30, 2010, gold sales increased by 47% to 88,288 ounces from 60,053 ounces sold in the same period in 2009. Gold production was 82,883 ounces compared to 59,745 ounces. The increased gold sales and production were attributable to higher ore tonnes mined, increased recoveries and higher average grades mined in the first six months of 2010 versus the same period in 2009.

Total cash cost(1) per ounce of gold sold for the six months ended June 30, 2010 was $587 compared to $607 per ounce in the same period last year. The drivers of the total cash cost(1) decrease during the first six months of 2010 were consistent with those noted above regarding the second quarter.

Cerro San Pedro Mine Demonstrates Operational Flexibility

After receiving the explosives permit in March 2010, the mining rate at the Cerro San Pedro mine was quickly accelerated and, as a result, gold sales in the second quarter increased by 6% to 24,833 ounces from 23,350 ounces in the same period in 2009. Gold production was 29,424 ounces compared to 24,210 ounces. The increased gold sales and production were a result of higher ore tonnes mined and higher grades during the second quarter of 2010. These benefits were partially offset by lower recoveries as ore has not yet had sufficient time under leach to reach expected recoveries after the delayed receipt of the explosives permit in the first quarter of 2010. Silver sales in the second quarter were 505,350 ounces compared to 422,713 ounces in the second quarter of 2009.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the second quarter was $288 compared to $429 in the second quarter of 2009. The decrease in total cash cost(1) is due to optimized mine planning, coupled with the benefit of higher by-product revenues driven by higher silver volumes and higher realized silver prices during the second quarter of 2010 when compared to the same period in the prior year. The average realized silver price in the second quarter was $18.38 per ounce compared to $13.84 per ounce in the prior year. These benefits were partially offset by the appreciation of the Mexican Peso as well as higher consumables costs, incurred in an effort to maximize production after delayed receipt of the explosives permit, during the second quarter of 2010 when compared to the same period in 2009.

For the six months ended June 30, 2010, gold sales were 37,957 ounces compared to 41,664 ounces sold in the same period in 2009. Gold production was 42,362 ounces compared to 44,793 ounces. The decreased gold sales and production in the first half of 2010 were attributable to the delayed receipt of the explosives permit in the first quarter of 2010. Silver sales for the six months ended June 30, 2010 were 698,856 ounces compared to 794,932 ounces sold in the same period in 2009.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the six months ended June 30, 2010 was $403 compared to $483 in the same period last year. The decrease in total cash cost(1) is driven by a combination of improved mine planning and higher by-product revenues in the first six months of 2010, with the higher by-product sales resulting from higher realized silver prices, partially offset by lower silver sales volumes. The average realized silver price in the first six months of 2010 was $18.02 per ounce compared to $13.23 per ounce in the prior year. These benefits were partially offset by: the fixed operating costs being distributed over lower ore tonnes in the first quarter of 2010, the appreciation of the Mexican Peso and higher consumables costs during the first half of 2010 when compared to the same period in 2009.

Cerro San Pedro Mine - Update on Recent Court Decision

As disclosed on July 7th, the Fifth Auxiliary District Court in Mexico City denied the company's appeal against the September 2009 ruling by the Federal Court of Fiscal and Administrative Justice that ordered SEMARNAT, the Mexican government's environmental regulatory agency, to cancel the company's Environmental Impact Statement ("EIS") in November 2009.

The company has now submitted its appeal against the District Court's recent decision to the Collegiate Appeals Court in Mexico City. It is anticipated that the Collegiate Appeals Court's evaluation of the appeal could take between four and six months. Further avenues remain for the matter to be advanced to the Supreme Court at a later date.

The Cerro San Pedro Mine is currently fully operational and New Gold intends to pursue all available avenues to ensure the mine continues to operate. Should a shutdown order be requested while the appeal is pending, the company will immediately seek an injunction against such an order. New Gold was previously successful in obtaining such an injunction in late 2009.

The company remains steadfast in its view that the mine should continue to be operated based on its enviable record of compliance with Mexican and international environmental standards, as well as the significant financial and socio-economic benefits it provides to the city of San Luis Potosi, the town of Cerro de San Pedro and the surrounding villages.

New Gold continues to work with local and federal government authorities in an effort to put in place an EIS that addresses the ongoing challenges against the validity of the mine's previously approved EIS.

Peak Mines Continues to Deliver with Strong Second Half Expected

Gold sales in the second quarter at Peak Mines increased by 5% to 18,783 ounces from 17,939 ounces sold in the second quarter of 2009. Gold production was 21,646 ounces compared to 22,382 ounces. Gold production quarter-over-quarter remained relatively consistent as ore milled, grade and recoveries were all comparable. Copper sales increased in the second quarter to 3.0 million pounds from 2.6 million pounds in the same quarter of 2009. The increase in copper sales over the same quarter in 2009 was primarily related to timing of concentrate shipments.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the second quarter was $459 compared to $364 in the second quarter of 2009. The increase in total cash cost(1) is attributable to the timing of concentrate shipments and related inventory charges, an increase in salary related costs and the appreciation of the Australian dollar in the second quarter of 2010 when compared to the same period in the prior year. These cost increases were partially offset by higher by-product revenues from higher copper sales volumes and higher realized copper prices in the second quarter of 2010 when compared to the same period in the prior year. The average realized copper price in the second quarter was $3.09 per pound compared to $2.07 per pound in the prior year.

For the six months ended June 30, 2010, gold sales were 36,176 ounces compared to 38,795 ounces sold in the same period in 2009. Gold production was 41,889 ounces compared to 43,011 ounces. Gold production year to date was relatively consistent to that of the prior year as ore milled, grade and recoveries were all comparable. Copper sales for the six months ended June 30, 2010 were 7.1 million pounds compared to 5.3 million pounds sold in the same period in 2009.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the six months ended June 30, 2010 was $304 compared to $349 in the same period last year. The decrease in total cash cost(1) is driven by higher by-product revenues from higher copper sales volumes and higher realized copper prices in the first six months of 2010 when compared to the same period in the prior year. The average realized copper price in the first six months of 2010 was $3.24 per pound compared to $1.88 per pound in the prior year. This benefit was partially offset by an increase in salary related costs and the appreciation of the Australian dollar in the first half of 2010 when compared to the same period in the prior year.

Second Quarter and Year to Date Production and Cash Cost(1) Overview

Results presented below are for the period of ownership for the Mesquite Mine (June 1, 2009).

    <<
    -------------------------------------------------------------------------
                                       Q2 2010   Q2 2009  YTD 2010  YTD 2009
    -------------------------------------------------------------------------
    Production
    -------------------------------------------------------------------------
      Mesquite Gold (ounces)            38,849     9,041    82,883     9,041
    -------------------------------------------------------------------------
      Cerro San Pedro
        Gold (ounces)                   29,424    24,210    42,362    44,793
        Silver (ounces)                547,084   414,038   753,784   841,477
    -------------------------------------------------------------------------
      Peak Mines
    Gold (ounces)                       21,646    22,382    41,889    43,011
    Copper (million pounds)                4.0       4.3       8.0       8.1
    -------------------------------------------------------------------------
      Amapari Gold (ounces)                  -         -         -    13,726
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total Production
    -------------------------------------------------------------------------
      Gold (ounces)                     89,919    55,633   167,134   110,571
    -------------------------------------------------------------------------
      Silver (ounces)                  547,084   414,038   753,784   841,477
    -------------------------------------------------------------------------
      Copper (million pounds)              4.0       4.3       8.0       8.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gold sales (ounces)                 82,402    52,890   162,422   108,287
    -------------------------------------------------------------------------
    Total cash cost(1) ($ per ounce)      $490      $468      $481      $491
    -------------------------------------------------------------------------
    Note:  As announced on April 13, 2010, the company has sold the Amapari
           asset.
    >>

2010 Outlook

During the second quarter of 2010, New Gold continued its focus on delivering operationally while also streamlining the asset portfolio and enhancing the financial flexibility of the company. Looking forward, production is anticipated to continue to grow in the second half of the year coupled with declining cash cost(1). Mesquite is expected to continue its strong production with a focus on reducing costs. Cerro San Pedro has now reached its steady-state mining rate and recoveries from the leach pad are expected to continue to improve over the second half of the year. Per the mine plan, Peak Mines should be entering higher gold grade zones which will positively impact production and costs in the second half of 2010. New Gold reiterates its 2010 full year guidance of 330,000 to 360,000 ounces of gold production at a total cash cost(1) of $445 to $465 per ounce sold, net of by-product sales.

Conference Call-in and Webcast

Please note that going forward, New Gold will no longer issue preliminary Production and Cash Cost(1) news releases after each quarter and will instead issue a Quarterly Results news release that incorporates all operational and financial results for the respective quarter.

New Gold will discuss second quarter earnings results during a conference call and webcast on Friday, August 6, 2010 at 10:00 am Eastern Time. Anyone may join the conference by calling 1-416-695-7806 or toll-free 1-888-789-9572 in North America, and 800-6578-9818 toll-free outside of North America. The Passcode is 6463541. To listen to a recorded playback of the call after the event, please call 1-416-695-5800 or toll-free in North America 1-800-408-3053 - Passcode 4104215.

A live and archived webcast will also be available at www.newgold.com.

About New Gold

New Gold is an intermediate gold mining company with the Mesquite Mine in the United States, the Cerro San Pedro Mine in Mexico and Peak Gold Mines in Australia. The company is expected to produce between 330,000 and 360,000 ounces of gold in 2010, growing to over 400,000 ounces in 2012. In addition, New Gold has a strong portfolio of development and exploration assets in North and South America. 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 may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Mexico and Chile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Mexico and Chile 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 that New Gold operates, including, but not limited to, Mexico, where New Gold is involved with ongoing challenges relating to its environmental impact statement for the Cerro San Pedro Mine; the lack of certainty with respect to the Mexican and other 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 the company is or may become a party to, including the third party claim related to the El Morro transaction with respect to New Gold's exercise of its right of first refusal on the El Morro copper-gold project in Chile and its partnership with Goldcorp Inc., which transaction and third party claim were announced by New Gold in January 2010; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; 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. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (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 filed on March 26, 2010 and Management's Discussion and Analysis for the year ended December 31, 2009, both available at www.sedar.com. 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.

(1) TOTAL CASH COST

"Total cash cost" per ounce figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is widely accepted as the standard of reporting cash cost of production in North America. 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 cost on a sales basis. Total cash cost includes mine site operating costs such as mining, processing, administration, royalties and production taxes, but is exclusive of amortization, reclamation, capital and exploration costs. Total cash cost is reduced by any by-product revenue and is then divided by ounces sold to arrive at the total by-product cash cost of sales. The measure, along with sales, is considered to be a key indicator of a company's ability to generate operating earnings and cash flow from its mining operations. This data is furnished to provide additional information and is a non-GAAP measure. Total cash cost presented do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation as a substitute for measures of performance prepared in accordance with GAAP and is not necessarily indicative of operating costs presented under GAAP. A reconciliation will be provided in the MD&A accompanying the quarterly financial statements.

New Gold Provides Update on Cerro San Pedro Hearings

Wed, 07 Jul 2010 08:00:00 -0400

VANCOUVER, July 7 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX:NGD) today provides an update on the hearings related to the nullification of the Environmental Impact Statement ("EIS") at the company's Cerro San Pedro Mine, located in San Luis Potosi, Mexico.

On July 7, the Fifth Auxiliary District Court in Mexico City denied the company's appeal against the September 2009 ruling by the Federal Court of Fiscal and Administrative Justice that ordered SEMARNAT, the Mexican government's environmental regulatory agency, to cancel the company's EIS in November 2009. Although New Gold has been informed by the court that the decision is negative, the company has not yet been provided the full decision including the written reasons for the denial. As a result, the company is not presently aware of the implications this could have on the Cerro San Pedro mine which is currently fully operational. New Gold expects to receive the detailed full decision in the coming weeks. After the company has had the opportunity to review the full decision, New Gold will file an appeal with a Collegiate Appeals Court in Mexico City. In addition, the company may file an application with the Mexican Supreme Court requesting it hear the case.

New Gold remains in continuous discussions with both SEMARNAT and PROFEPA, the Mexican government's environmental enforcement agency, to work towards the uninterrupted operation of the Cerro San Pedro mine. The company remains steadfast in its view that the Cerro San Pedro operation complies with the highest environmental standards and should remain operational for the benefit of its local employees and the surrounding communities.

"While we are disappointed by this most recent decision, we will continue to pursue all avenues to ensure the continuous operation of Cerro San Pedro," stated Robert Gallagher, President and Chief Executive Officer.

New Gold will continue to provide updates in this matter.

About New Gold

New Gold is an intermediate gold mining company with the Mesquite Mine in the United States, the Cerro San Pedro Mine in Mexico and the Peak Gold Mines in Australia. The company is expected to produce between 330,000 and 360,000 ounces of gold in 2010, growing to over 400,000 ounces in 2012. In addition, New Gold has a strong portfolio of development and exploration assets in North and South America. For further information on the company, please visit www.newgold.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

New Gold Announces Inclusion in FTSE Gold Mines Index

Thu, 03 Jun 2010 16:35:00 -0400

VANCOUVER, June 3 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX:NGD) today announces it has received notification that following the semi-annual review of the FTSE Gold Mines Index ("Index"), the FTSE Gold Mines Index Committee announced inclusion of New Gold in the Index, which will become effective on June 21, 2010.

"This is another important milestone in the advancement of New Gold and reflects our growing gold production, market capitalization and trading volumes," stated Randall Oliphant, Executive Chairman.

The FTSE Gold Mines Index is designed to reflect the performance of the world-wide market in the shares of companies whose principal activity is the mining of gold. Eligibility is based on the quantity of gold production. All Index values are denominated in US dollars.

FTSE is an independent company jointly owned by The Financial Times and the London Stock Exchange and is a world-leader in the creation and management of over 120,000 equity, bond and alternative asset class indices.

About New Gold

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

"FTSE(R)" and "Footsie(R)" are registered trademarks of the London Stock Exchange plc and The Financial Times Limited and are used by FTSE under licence. Neither FTSE nor its licensors accept any liability for any errors or omissions in FTSE indices.

New Gold Announces 2010 First Quarter Results with Increases in Gold Sales, Earnings and Cash Flow

Thu, 06 May 2010 16:00:00 -0400

(All figures are in US dollars unless otherwise indicated)

VANCOUVER, May 6 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX:NGD) today announces financial and operational results for the first quarter of 2010. The company had a strong operational quarter with gold sales of 80,020 ounces at a total cash cost(1) of $472 per ounce, net of by-product sales, resulting in $36.6 million of earnings from mine operations. New Gold is also pleased to reiterate its 2010 full year guidance of 330,000 to 360,000 ounces of gold production at total cash cost(1) of $445 to $465 per ounce sold, net of by-product sales.

First Quarter Highlights

Results presented below are for the period of ownership for the Mesquite Mine (June 1, 2009).

    <<
    -   Gold sales increased by 44% to 80,020 ounces from 55,397 ounces in
        the same period in 2009

    -   Total cash cost(1) decreased 8% to $472 per ounce sold, net of by-
        product sales, from $513 per ounce sold in the same period in 2009

    -   Earnings from mine operations increased by 202% to $36.6 million from
        $12.1 million in the same period in 2009

    -   Net earnings from continuing operations increased to $17.2 million
        from $12.1 million in the same period in 2009

    -   Cash flow from operations increased to $20.0 million from cash flow
        used by operations of $2.7 million in the same period in 2009

    -   Cash balance increased by $72.2 million from year-end 2009 to
        $343.7 million at March 31, 2010
    >>

"With continued strong operational results and a significantly improved balance sheet, the first quarter proved to be an outstanding start to 2010 for New Gold," stated Randall Oliphant, Executive Chairman. "Through the rest of 2010 and going forward, we will continue our focus on delivering increased production at lower costs and will strive to further increase the value of our portfolio of operating and development assets."

First Quarter Consolidated Financial Results

Consolidated revenue for the first quarter of 2010 was $101.6 million compared to $44.3 million for the same period in 2009. Revenue increased in 2010 as a result of additional gold sales from the Mesquite mine after the business combination with Western Goldfields Inc. as well as higher average realized gold prices in 2010.

Earnings from mine operations for the first quarter of 2010 were $36.6 million compared to $12.1 million for the same period in 2009. The increase in earnings from mine operations in 2010 was driven by increased gold sales, higher average realized gold prices and lower total cash cost(1) during the quarter.

Net earnings from continuing operations for the first quarter of 2010 were $17.2 million or $0.04 per share compared to net earnings of $12.1 million or $0.06 per share for the same period in 2009. The first quarter 2010 net earnings included a pre-tax gain of $3.9 million related to the sale of Asset Backed Notes which was offset by a pre-tax $4.8 million foreign exchange translation loss. Comparatively, the first quarter of 2009 net earnings included a pre-tax gain of $14.2 million related to the redemption of long-term debt which was partially offset by a pre-tax $2.0 million foreign exchange translation loss.

Cash flow from operations for the first quarter of 2010 was $20.0 million compared to cash flow used by operations of $2.7 million for the same period in 2009. The significant increase in quarterly cash flow is a direct result of the company's strong operating performance during the quarter.

New Gold's cash balance at the end of the quarter was $343.7 million representing a significant increase over the year-end 2009 cash balance of $271.5 million, including restricted cash. In addition, subsequent to quarter end, the company closed the sale of Amapari and as part of the consideration received $37 million in cash. During the quarter, New Gold fully pre-paid the remaining $27.2 million of the Mesquite term loan facility, leaving the company with $217.7 million in debt, which is due in 2014 and 2017.

First Quarter Operational Review

All three of New Gold's operating mines had strong operating quarters, with Mesquite and Peak producing gold at targeted rates at lower than forecasted costs. Despite the delay in receiving the explosives permit, Cerro San Pedro successfully optimized the processing of ore on the leach pad and maximized the gold production and related earnings contribution from the mine. New Afton also continued its strong progress with a fifth straight quarter of increased underground advance.

"We continue to be very proud of our operational teams at each of the sites," stated Robert Gallagher, President and Chief Executive Officer. "With the continued progress of Mesquite, the flexibility of Cerro San Pedro, the year-over-year consistency of Peak and the exciting future of New Afton and El Morro we are very pleased with the outlook of our properties."

Historical results presented below include gold production, sales and total cash cost(1) for the first quarter of 2009 which reflects a period prior to the acquisition of the Mesquite Mine (June 1, 2009).

Mesquite Mine Showing Continued Improvement

Gold sales in the first quarter at Mesquite increased by 51% to 49,502 ounces from 32,715 ounces sold in the first quarter 2009. The increase in gold sales, combined with a 4% decrease in total cash cost(1) per ounce sold to $550 from $573 in the first quarter of 2009, resulted in a significant increase in earnings from mine operations at Mesquite during the quarter. With these improved operating results and higher realized gold prices, earnings from mine operations in the first quarter were $17.4 million compared to $7.1 million in the same period in 2009.

The increased gold sales and production at Mesquite during the first quarter were primarily driven by mining at reserve grade when compared to the lower grade ore mined in the first quarter of 2009 as well as continued improvement in gold recoveries. Total cash cost(1) benefitted from higher gold sales in the quarter and were partially offset by higher consumable and labour costs when compared to the first quarter of 2009.

The Mesquite Mine is forecast to produce 145,000 to 155,000 ounces of gold in 2010 at total cash cost(1) of $540 to $560 per ounce sold.

Cerro San Pedro Mine Back Up and Running

Gold and silver sales in the first quarter at Cerro San Pedro were 13,124 and 193,506 ounces, respectively, compared to 18,314 and 372,219 ounces in the same period in 2009. The decline in sales of both gold and silver was directly attributable to limited delivery of ore to the leach pad. As a result of the fixed portion of operating costs at Cerro San Pedro being attributed to fewer gold ounces sold as well as lower by-product credits resulting from lower silver sales during the quarter, the total cash cost(1) per ounce of gold sold, net of by-product sales, for the first quarter was $622 compared to $551 in the first quarter of 2009. Despite the permitting delay, Cerro San Pedro's earnings from mine operations during the first quarter increased to $3.2 million from $2.6 million in the same period in 2009.

The company continues to work with federal and local levels of government in Mexico to resolve the ongoing legal challenges at Cerro San Pedro.

Since the receipt of the explosives permit the mine has been fully operational and the forecast for Cerro San Pedro remains unchanged with expected production of 95,000 to 105,000 ounces of gold and 1.4 to 1.6 million ounces of silver in 2010. Total cash cost(1) is forecast to be $390 to $410 per ounce sold, net of by-product sales. The full year total cash cost(1) assumption is based on a by-product silver price of $15 per ounce.

Peak Mines Makes Strong Earnings Contribution

Gold and copper sales in the first quarter at Peak Mines were 17,393 ounces and 4.1 million pounds, respectively, compared to 20,856 ounces and 2.8 million pounds sold in the first quarter of 2009. Total cash cost(1) per ounce of gold sold, net of by-product sales, for the first quarter was $136 compared to $337 in the first quarter of 2009. The combination of steady gold production, a higher realized gold price and lower total cash cost(1) resulted in first quarter 2010 earnings from mine operations increasing by 68% to $16.0 million from $9.5 million in the same period in 2009.

The decrease in gold sales was a result of timing of concentrate shipments while the increase in copper sales was attributable to higher copper grades and recoveries. The decrease in total cash cost(1) is due to higher by-product sales resulting from increased copper volumes and higher average copper prices during the first quarter of 2010 compared to 2009. The first quarter cash cost further benefited from copper sales of 4.1 million pounds being netted against 17,393 ounces of gold sales. As gold sales are expected to increase in subsequent quarters of 2010, with copper sales remaining consistent, the relative by-product benefit should be lower than that recorded in the first quarter. These cost reductions were partially offset by an increase in the Australian dollar exchange rate when compared to the first quarter of 2009.

Peak Mines remains on target to produce 90,000 to 100,000 ounces of gold and 15 to 17 million pounds of copper in 2010. Total cash cost(1) is forecast to be $360 to $380 per ounce sold, net of by-product sales. The full year total cash cost(1) assumption is based on a by-product copper price of $2.75 per pound.

New Afton Increases Advance Rate

New Gold's primary development project continued on schedule during the first quarter and is expected to commence production in the second half of 2012. The project will be an underground mine and concentrator which will produce an annual estimated average of 85,000 ounces of gold, and 75 million pounds of copper.

During the first quarter of 2010, the New Afton underground development crews continued their track record of continuous improvement advancing development 742 metres. This marks the fifth consecutive quarter of increased development and a significant improvement over the 195 metres of advance completed in the first quarter of 2009. Capital expenditures during the quarter were $15.9 million, including $5.1 million of capitalized interest, compared to $18.2 million in the same period in 2009.

As previously disclosed, due to the company's increased financial flexibility, $50 million of surface construction related capital has been moved into 2010 that was previously budgeted for 2011 and 2012. This will help more evenly spread the surface construction over the coming years helping to further optimize the development of New Afton which remains on time and on budget. Total capital expenditures for 2010 at New Afton are projected to be $133.5 million, including $21.5 million of capitalized interest.

The company looks forward to production commencing in just over two years, as New Afton is expected to contribute significantly to New Gold's current portfolio of operating assets. As a low-cost operation, New Afton should meaningfully expand the company's operating margin and cash flow generation. At current commodity prices, the mine is expected to double the company's cash flow.

El Morro Project Update

New Gold's 70% joint venture partner on the El Morro Project, Goldcorp Inc., continues to work through the permit review process for the project with a target to begin construction in early 2011. A project team has been assembled to advance exploration and development at the site during 2010 and plans to further optimize the existing feasibility study are underway. Goldcorp Inc. has stated that exploration expenditures at El Morro during 2010 are estimated to be approximately $10 million.

First Quarter Production and Total Cash Cost(1) Overview

Results presented below are for the period of ownership for the Mesquite Mine (June 1, 2009).

    <<
    -------------------------------------------------------------------------
                                                         Q1 2010     Q1 2009
    -------------------------------------------------------------------------
    Production
    -------------------------------------------------------------------------
      Mesquite Gold (ounces)                              44,034           -
    -------------------------------------------------------------------------
      Cerro San Pedro
        Gold (ounces)                                     12,938      20,583
        Silver (ounces)                                  206,700     427,439
    -------------------------------------------------------------------------
      Peak Mines
        Gold (ounces)                                     20,243      20,629
        Copper (million pounds)                              4.0         3.8
    -------------------------------------------------------------------------
      Amapari Gold (ounces)                                    -      13,726
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total Production
    -------------------------------------------------------------------------
      Gold (ounces)                                       77,215      54,938
    -------------------------------------------------------------------------
      Silver (ounces)                                    206,700     427,439
    -------------------------------------------------------------------------
      Copper (million pounds)                                4.0         3.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gold sales (ounces)                                   80,020      55,397
    -------------------------------------------------------------------------
    Total cash cost(1) ($ per ounce)                        $472        $513
    -------------------------------------------------------------------------

    Note: As announced on April 13, 2010, the company has sold the Amapari
    asset.
    >>

Key Financial Information

At March 31, 2010, New Gold had a cash balance of $343.7 million, an increase of $72.2 million when compared to the year-end 2009 balance. The net increase in the cash balance during the first quarter of 2010 is summarized below:

    <<
    -------------------------------------------------------------------------
                                                                Cash Balance
                                                                   (US$m)
    -------------------------------------------------------------------------
    December 31, 2009 (including restricted cash)                  $271.5
    -------------------------------------------------------------------------
      Cash flow from operations                                      20.0
    -------------------------------------------------------------------------
      January sale of asset backed notes                             48.1
    -------------------------------------------------------------------------
      Net cash consideration as part of El Morro transaction         46.3
    -------------------------------------------------------------------------
      Mesquite Term Loan Facility prepayment                        (27.2)
    -------------------------------------------------------------------------
      Capital expenditures                                          (19.0)
    -------------------------------------------------------------------------
      Other                                                           4.0
    -------------------------------------------------------------------------
    March 31, 2010                                                 $343.7
    -------------------------------------------------------------------------
    >>

During the quarter, the company's cash flow was in excess of the New Afton development costs and sustaining capital expenditures at New Gold's operations. Subsequent to the quarter end, the company received an additional $37 million in cash proceeds after the closing of the sale of the Amapari Mine. The consolidated debt position of the company is $217.7 million which includes: $174.5 million of 10% senior secured notes (C$187 million), $39.5 million of 5% convertible debentures (face value of C$55 million) and $3.7 million in El Morro funding loans. The senior secured notes are due in 2017 and the convertible debentures are due in 2014 and have a C$9.35 conversion price.

2010 Outlook

During the first quarter of 2010 New Gold continued to make significant progress both from an operational and financial perspective. With the Mesquite and Peak Mines performing well and Cerro San Pedro now back to full operations, the company's producing assets are well positioned to meet the 2010 guidance. Through various corporate development initiatives including the new El Morro partnership and sale of Amapari, New Gold has streamlined its portfolio of assets, while simultaneously strengthening the balance sheet and increasing the company's financial flexibility. From this position, the company looks forward to the continued development of its exciting New Afton project, which has the potential to significantly enhance the cash flow generation of the company, as well as the pursuit of other value enhancing opportunities.

Conference Call-in and Webcast

New Gold will discuss full first quarter earnings results as part of the company's Annual General Meeting of Shareholders ("AGM") on May 6, 2010 at 4:00pm Eastern Time. New Gold will hold a conference call and webcast of its AGM. Anyone may join the call by dialling toll free 1-866-696-5910 or 1-416-340-2217 to access the call from outside Canada or the U.S. - Passcode 1174247. You can listen to a recorded playback of the call after the event by dialling 1-800-408-3053 or 1-416-695-5800 for calls outside Canada and the U.S. - Passcode 7164763.

A live and archived webcast will also be available at www.newgold.com.

About New Gold

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 may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Brazil, Mexico and Chile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Brazil, Mexico and Chile 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 that New Gold operates, including, but not limited to, Mexico, where New Gold is involved with ongoing challenges relating to its environmental impact statement for the Cerro San Pedro Mine; the lack of certainty with respect to the Mexican and other 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 the company is or may become a party to, including the third party claim related to the El Morro transaction with respect to New Gold's exercise of its right of first refusal on the El Morro copper-gold project in Chile and its partnership with Goldcorp Inc., which transaction and third party claim were announced by New Gold in January 2010; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; 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. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (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 filed on March 26, 2010 and Management's Discussion and Analysis for the year ended December 31, 2009, both available at www.sedar.com. 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.

(1) TOTAL CASH COST

    <<
    New Gold Inc.
    Consolidated Statements of Operations
    Three month periods ended March 31

    (Expressed in thousands of U.S. dollars, except share and per share
     amounts)
    (Unaudited)
    -------------------------------------------------------------------------

                                                          2010          2009
    -------------------------------------------------------------------------
                                                             $             $

    Revenues                                           101,620        44,325
    Operating expenses                                 (52,256)      (23,773)
    Depreciation and depletion                         (12,741)       (8,479)
    -------------------------------------------------------------------------
    Earnings from mine operations                       36,623        12,073

    Corporate administration                            (7,989)       (4,860)
    Exploration                                         (1,794)       (1,067)
    -------------------------------------------------------------------------

    Income from operations                              26,840         6,146
    Other income (expense)
      Realized and unrealized gain on investments        3,944             -
      Unrealized gain on prepayment option               1,907             -
      Interest and other income                            616           246
      Gain on redemption of long-term debt                   -        14,236
      Interest and finance fees                           (232)          (84)
      Other expense                                     (2,082)            -
      Loss on foreign exchange                          (4,813)       (1,984)
    -------------------------------------------------------------------------

    Earnings before taxes                               26,180        18,560
    Income and mining taxes                             (8,992)       (6,491)
    -------------------------------------------------------------------------

    Net earnings from continuing operations             17,188        12,069
    Earnings from discontinued operations                  305            10
    -------------------------------------------------------------------------
    Net earnings                                        17,493        12,079
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share from continuing operations
      Basic                                               0.04          0.06
      Diluted                                             0.04          0.06
    -------------------------------------------------------------------------

    Earnings per share from discontinued operations
      Basic                                               0.00          0.00
      Diluted                                             0.00          0.00
    -------------------------------------------------------------------------

    Earnings per share
      Basic                                               0.04          0.06
      Diluted                                             0.04          0.06
    -------------------------------------------------------------------------

    Weighted average number of shares outstanding
    (in thousands)
      Basic                                            388,956       212,848
      Diluted                                          398,190       212,930


    (i) Stock option expense (a non-cash item
         included in corporate administration)           2,302         1,332



    New Gold Inc.
    Consolidated Balance Sheets

    (Expressed in thousands of U.S. dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                                                      March 31,  December 31,
                                                          2010          2009
    -------------------------------------------------------------------------
                                                             $             $

    Assets
    Current assets
      Cash and cash equivalents                        343,715       262,325
      Restricted cash                                        -         9,201
      Accounts receivable                               15,644        10,345
      Inventories                                       88,743        86,299
      Future income and mining taxes                     6,934         8,848
      Current portion of mark-to-market gain
       on fuel contracts                                   726           706
      Prepaid expenses and other                         6,539         6,933
      Current assets of operations held for sale        10,585        10,298
    -------------------------------------------------------------------------
    Total current assets                               472,886       394,955

    Investments                                          2,149        45,890
    Mining interests                                 2,012,749     2,000,438
    Future income tax asset                              2,028         2,250
    Reclamation deposits and other                      19,739        17,646
    Assets of operations held for sale                  27,009        27,080
    -------------------------------------------------------------------------
    Total assets                                     2,536,560     2,488,259
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities          40,610        36,033
      Current portion of long-term debt                      -        12,088
      Current portion of mark-to-market loss
       on gold contracts                                20,288        19,206
      Income and mining taxes payable                   15,067        15,677
      Current liabilities of operations
       held for sale                                     8,943        10,414
    -------------------------------------------------------------------------
    Total current liabilities                           84,908        93,418

    Reclamation and closure cost obligations            21,040        19,889
    Mark-to-market loss on gold contracts               76,782        76,780
    Future income and mining taxes                     314,606       316,426
    Long-term debt                                     217,704       225,456
    Deferred benefit                                    46,276             -
    Employee benefits and other                          5,618         5,355
    Liabilities of operations held for sale             19,272        19,890
    -------------------------------------------------------------------------
    Total liabilities                                  786,206       757,214
    -------------------------------------------------------------------------

    Shareholders' equity
    Common shares                                    1,812,625     1,810,865
    Contributed surplus                                 84,291        82,984
    Share purchase warrants                            150,656       150,656
    Equity component of convertible debentures          21,604        21,604
    Accumulated other comprehensive loss               (30,456)      (29,205)
    Deficit                                           (288,366)     (305,859)
    -------------------------------------------------------------------------
                                                      (318,822)     (335,064)
    -------------------------------------------------------------------------
    Total shareholders' equity                       1,750,354     1,731,045
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity       2,536,560     2,488,259
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    New Gold Inc.
    Consolidated Statements of Cash Flows
    Three month periods ended March 31

    (Expressed in thousands of U.S. dollars)
    (Unaudited)
    -------------------------------------------------------------------------
                                                          2010          2009
    -------------------------------------------------------------------------
                                                             $             $

    Operating activities
      Net earnings                                      17,493        12,079
      Earnings from discontinued operations               (305)          (10)
      Items not involving cash
        Unrealized and realized gain on gold
         contracts                                      (2,076)            -
        Unrealized gain on fuel contracts                   65             -
        Unrealized foreign exchange loss                 4,812         2,719
        Gain on disposal of investments                 (3,944)            -
        Loss on disposal of assets                         398             -
        Depreciation and depletion                      12,522         8,480
        Stock option expense                             2,302         1,332
        Gain on embedded derivative contract            (1,907)            -
        Remediation costs incurred                         (16)            -
        Future income and mining taxes                  (1,067)        2,787
        Gain on redemption of long-term debt                 -       (14,236)
        Other                                                -           327
      Change in non-cash working capital                (8,331)      (16,209)
    -------------------------------------------------------------------------
    Cash provided by (used in) continuing
     operations                                         19,946        (2,731)
    Cash provided by (used in) discontinued
     operations                                         (1,696)       10,452
    -------------------------------------------------------------------------

    Investing activities
      Mining interests                                 (18,968)      (26,408)
      Reclamation deposits                                 (41)            -
      Receipt of accrued interest on investments             -         4,716
      Reduction of restricted cash                       9,201             -
      Proceeds from disposal of assets                      29             -
      Cash received in El Morro transaction             46,276             -
      Investment in El Morro                          (463,000)            -
      Proceeds from settlement of investments           48,112             -
    -------------------------------------------------------------------------
    Cash provided by (used in) continuing
     operations                                       (378,391)      (21,692)
    Cash used in discontinued operations                  (219)         (721)
    -------------------------------------------------------------------------

    Financing activities
      Common shares issued                                   -            46
      Exercise of options to purchase common stock         765             -
      El Morro loan                                    463,000             -
      Repayment of long-term debt                      (27,235)      (25,575)
    -------------------------------------------------------------------------
    Cash provided by (used in) continuing
     operations                                        436,530       (25,529)
    Cash provided by (used in) discontinued
     operations                                              -        (7,000)
    -------------------------------------------------------------------------

    Effect of exchange rate changes on cash and
     cash equivalents                                    5,295        (1,837)
    -------------------------------------------------------------------------

    Increase (decrease) in cash and cash equivalents    81,465       (49,058)
    Cash and cash equivalents, beginning of period     263,151       185,668
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period           344,616       136,610
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Comprised of
      Cash and cash equivalents of continuing
       operations                                      343,715       130,224
      Cash and cash equivalents of discontinued
       operations                                          901         6,386
    -------------------------------------------------------------------------
                                                       344,616       136,610
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash and cash equivalents are comprised of
      Cash                                             113,202        39,640
      Short-term money market instruments              231,414        96,970
    -------------------------------------------------------------------------
                                                       344,616       136,610
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    >>

New Gold Announces 44% Increase in Gold Sales, 8% Decrease in Cash Cost and $72 Million Increase in Cash in First Quarter of 2010

Wed, 21 Apr 2010 17:26:00 -0400

(All figures are in US dollars unless otherwise indicated)

VANCOUVER, April 21 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX:NGD) today announces 2010 first quarter gold sales of 80,020 ounces at a total cash cost(1) of $472 per ounce, net of by-product sales. The preliminary production, sales and total cash cost(1) information provided are approximate figures and may differ slightly from the first quarter earnings results. New Gold is also pleased to reiterate its 2010 full year guidance of 330,000 to 360,000 ounces of gold production at a total cash cost(1) of $445 to $465 per ounce sold, net of by-product sales.

    <<
    First Quarter Highlights

    Results presented below are for the period of ownership for the Mesquite
Mine (June 1, 2009).

    -   Gold sales increased by 44% to 80,020 ounces from 55,397 ounces in
        the same period in 2009

    -   Total cash cost(1) decreased 8% to $472 per ounce sold, net of by-
        product sales, from $513 per ounce sold in the same period in 2009

    -   Gold production increased 41% to 77,215 ounces from 54,938 ounces in
        the same period in 2009

    -   Cash balance increased by $72 million from year-end 2009 to $344
        million at March 31, 2010

    -   Fully repaid the remaining $27 million of the Mesquite Term Loan
        Facility
    >>

The Mesquite and Peak Mines had strong operating quarters achieving their targeted gold production levels at lower than forecasted total cash cost(1). In addition, in response to the delay in renewal of the explosives permit at Cerro San Pedro, operating parameters were adjusted to maximize the production of gold and silver and contribute meaningfully to the consolidated results in the first quarter of 2010. New Afton also continued its strong progress with a fifth straight quarter of increased underground advance since the beginning of 2009.

"We are very pleased with the operating performance and continued enhancements at all of our mines," stated Robert Gallagher, President and Chief Executive Officer. "Mesquite, Peak and New Afton all had an excellent start to 2010 and the team at Cerro San Pedro effectively maximized production from the heap leach pad despite the delayed receipt of our explosives permit."

Operations Overview

Mesquite Mine Successfully Increasing Production and Reducing Costs

Gold sales in the first quarter at Mesquite increased by 51% to 49,502 ounces from 32,715 ounces sold in the first quarter 2009. Gold production was 44,034 ounces compared to 33,660 ounces in the same period in 2009. The increased gold sales and production at Mesquite during the first quarter were primarily driven by mining at reserve grade when compared to the lower grade ore mined in the first quarter of 2009 as well as continued improvement in gold recoveries.

Total cash cost(1) per ounce of gold sold for the first quarter of 2010 was $550 compared to $573 in the same quarter of 2009. The total cash cost(1) decrease is a result of higher gold sales in the quarter partially offset by higher consumable and labour costs when compared to the first quarter of 2009.

The Mesquite Mine is forecast to produce 145,000 to 155,000 ounces of gold in 2010 at total cash cost(1) of $540 to $560 per ounce sold.

Cerro San Pedro Mine Maximizes Relative Contribution

As a result of a previously disclosed legal challenge that was subsequently dismissed in mid-March, the renewal of the Mine's explosives permit was delayed until March 18, 2010. Despite limited ore delivery in the first quarter, the team focused on optimizing the processing of heap leach ore to maximize the production of gold and silver during the quarter. Gold sales in the first quarter at Cerro San Pedro were 13,124 ounces compared to 18,314 ounces in the same period in 2009. Gold production was 12,938 ounces compared to 20,583 ounces in the same period in 2009. The decrease in production was a result of limited delivery of ore to the leach pad due to the delayed granting of the explosives permit. Silver sales in the first quarter were 193,506 ounces compared to 372,219 ounces in the first quarter of 2009.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the first quarter was $622 compared to $551 in the first quarter of 2009. The increase in total cash cost(1) is due to the fixed portion of operating costs at Cerro San Pedro being attributed to fewer gold ounces sold as well as lower by-product credits resulting from lower silver sales during the quarter. As the mine uses contracted equipment, variable mining costs were reduced, however, these were offset by increased processing costs to maximize production from the ore that was previously placed on the heap leach pad.

The company continues to work with federal and local levels of government in Mexico to resolve the ongoing legal challenges at Cerro San Pedro.

Peak Mines Continues to Deliver with Record Low Cash Cost(1)

Gold sales in the first quarter at Peak Mines were 17,394 ounces compared to 20,856 ounces sold in the first quarter of 2009. Gold production was 20,243 ounces compared to 20,629 ounces in the same period in 2009. Gold production quarter-over-quarter remained consistent, with gold sales decreasing slightly due to timing of concentrate shipments. Copper sales increased in the first quarter to 4.1 million pounds from 2.8 million pounds in the same quarter of 2009. The increase in copper production over the same quarter in 2009 was the result of higher copper grades and recoveries.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the first quarter was $136 compared to $337 in the first quarter of 2009. The decrease in total cash cost(1) is due to higher by-product sales resulting from increased copper volumes and higher average copper prices during the first quarter of 2010 compared to 2009. The first quarter cash cost further benefited from copper sales of 4.1 million pounds being netted against 17,394 ounces of gold sales. As gold sales are expected to increase in subsequent quarters of 2010, with copper sales remaining consistent, the relative by-product benefit should be lower than that recorded in the first quarter. These cost reductions were partially offset by an increase in the Australian dollar exchange rate when compared to the first quarter of 2009.

New Afton on Track to Contribute Significantly

Activities were initiated during the quarter in preparation for commencement of surface construction in May 2010, including: tendering of buried services contracts, geotechnical drilling and site grading.

El Morro Project Update

First Quarter Production and Cash Cost(1) Overview

Results presented below are for the period of ownership for the Mesquite Mine (June 1, 2009).

    <<
    -------------------------------------------------------------------------
                                                        Q1 2010      Q1 2009
    -------------------------------------------------------------------------
    Production
    -------------------------------------------------------------------------
      Mesquite Gold (ounces)                             44,034            -
    -------------------------------------------------------------------------
      Cerro San Pedro
        Gold (ounces)                                    12,938       20,583
        Silver (ounces)                                 206,700      427,439
    -------------------------------------------------------------------------
      Peak Mines
        Gold (ounces)                                    20,243       20,629
        Copper (million pounds)                             4.0          3.8
    -------------------------------------------------------------------------
      Amapari Gold (ounces)                                   -       13,726
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total Production
    -------------------------------------------------------------------------
      Gold (ounces)                                      77,215       54,938
    -------------------------------------------------------------------------
      Silver (ounces)                                   206,700      427,439
    -------------------------------------------------------------------------
      Copper (million pounds)                               4.0          3.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gold sales (ounces)                                  80,020       55,397
    -------------------------------------------------------------------------
    Total cash cost(1) ($ per ounce)                       $472         $513
    -------------------------------------------------------------------------
    >>

Note: As announced on April 13, 2010, the company has sold the Amapari asset.

Key Financial Information

At March 31, 2010, New Gold had a cash balance of $344 million, an increase of $72 million when compared to the year-end 2009 balance. The net increase in the cash balance during the first quarter of 2010 is summarized below:

    <<
    -------------------------------------------------------------------------
                                                                Cash Balance
                                                                    (US$m)
    -------------------------------------------------------------------------
    December 31, 2009 (including restricted cash)                    $272
    -------------------------------------------------------------------------
      January sale of asset backed notes                               47
    -------------------------------------------------------------------------
      Net cash consideration as part of El Morro transaction           46
    -------------------------------------------------------------------------
      Mesquite Term Loan Facility prepayment                          (27)
    -------------------------------------------------------------------------
      Other                                                             6
    -------------------------------------------------------------------------
    March 31, 2010                                                   $344
    -------------------------------------------------------------------------
    >>

2010 Outlook

Conference Call-in and Webcast

New Gold will discuss full first quarter earnings results as part of the company's Annual General Meeting of Shareholders ("AGM") on May 6, 2010 at 4:00 p.m. Eastern Time. New Gold will also hold a conference call and webcast of its AGM. Anyone may join the call by dialling toll free 1-866-696-5910 or 1-416-340-2217 to access the call from outside Canada or the U.S. (Passcode 1174247). You can listen to a recorded playback of the call after the event by dialling 1-800-408-3053 or 1-416-695-5800 for calls outside Canada and the U.S. (Passcode 7164763).

A live and archived webcast will also be available at www.newgold.com.

About New Gold

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 may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Brazil, Mexico and Chile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Brazil, Mexico and Chile 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 that New Gold operates, including, but not limited to, Mexico, where New Gold is involved with ongoing challenges relating to its environmental impact statement for the Cerro San Pedro Mine; the lack of certainty with respect to the Mexican and other 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 the company is or may become a party to, including the third party claim related to the El Morro transaction with respect to New Gold's exercise of its right of first refusal on the El Morro copper-gold project in Chile and its partnership with Goldcorp Inc., which transaction and third party claim were announced by New Gold in January 2010; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; 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. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as "Risks Factors" included in New Gold's Annual Information Form filed on March 26, 2010 and Management's Discussion and Analysis for the year ended December 31, 2009, both available at www.sedar.com. 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.

(1) TOTAL CASH COST

New Gold Announces Closing of Sale of Amapari Mine

Tue, 13 Apr 2010 08:08:00 -0400

(All figures are in US dollars unless otherwise stated)

VANCOUVER, April 13 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX: NGD) today announces the closing of the previously disclosed sale of its Brazilian subsidiary Mineraçao Pedra Branca do Amapari Ltda. ("MPBA"), which holds the Amapari mine and related assets, to Beadell Resources Limited ("Beadell"). New Gold received $37 million in cash and $16 million in Beadell shares for total consideration of $53 million from the sale of MPBA, resulting in New Gold holding approximately 19.5% of Beadell's shares outstanding.

"We are pleased to have completed the sale of Amapari as it represents another significant step in the surfacing of value from what we believed were previously underappreciated assets in our portfolio," stated Randall Oliphant, Executive Chairman. "This further solidifies our financial position and streamlines our asset base such that we can look to further build from this strong foundation."

With the completion of the transaction, New Gold has successfully monetized a non-core asset, further enhancing the company's financial resources while retaining participation in the upside of Beadell and its collection of assets. Beadell is an Australian listed gold-focused company with exploration and development assets in Western Australia and Brazil.

About New Gold

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 may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Brazil, Mexico and Chile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Brazil, Mexico and Chile 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 that New Gold operates, including, but not limited to, Mexico, where New Gold is involved with ongoing challenges relating to its environmental impact statement for the Cerro San Pedro Mine; the lack of certainty with respect to the Mexican and other 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 the company is or may become a party to, including the third party claim related to the El Morro transaction with respect to New Gold's exercise of its right of first refusal on the El Morro copper-gold project in Chile and its partnership with Goldcorp Inc., which transaction and third party claim were announced by New Gold in January 2010; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; 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. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as "Risks Factors" included in New Gold's Annual Information Form filed on March 26, 2010 and Management Information Circular filed on April 8, 2010, both available at www.sedar.com. 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.

New Gold Provides Notice of Annual General Meeting and Release of First Quarter 2010 Results

Wed, 07 Apr 2010 18:11:00 -0400

VANCOUVER, April 7 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX:NGD) announces that it will host its Annual General Meeting of Shareholders ("AGM") on Thursday, May 6, 2010. The company also plans to release its first quarter 2010 results at that time which will be addressed during the meeting.

The AGM will begin on Thursday, May 6, 2010 at 4:00 pm Eastern Time and will be held at the Toronto Board of Trade, West Ballroom, located at 1 First Canadian Place, Toronto, Canada (nearest entrance from Adelaide Street). During the meeting, New Gold will provide a general corporate update, including a review of first quarter 2010 results. For those unable to attend in person, please see below for various alternative methods of participation.

    <<
    Via Webcast:
    ------------
    >>

A live audio webcast of the meeting will be available on our homepage at www.newgold.com.

    <<
    Via Telephone:
    --------------

    For those preferring to listen by telephone, please dial:

    Local:                        (416) 340-2217
    North America toll-free:      1-866-696-5910
    Global toll-free:             800-8989-6336
    Participant Passcode:         1174247

    Instant replay Via Telephone: (416) 695-5800
    North America toll-free:      800-408-3053
    Participant Passcode:         7164763

    Replay Archive:
    ---------------
    >>

The audio and webcast presentation will be available after the AGM on our website.

About New Gold

New Gold is an intermediate gold mining company with the Mesquite Mine in the United States, Cerro San Pedro Mine in Mexico and Peak Gold Mines in Australia. The company is expected to produce between 330,000 and 360,000 ounces of gold in 2010, growing to over 400,000 ounces in 2012. In addition, New Gold has a strong portfolio of development and exploration assets in North and South America. 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 may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Brazil, Mexico and Chile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Brazil, Mexico and Chile 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 that New Gold operates, including, but not limited to, Mexico, where New Gold is involved with ongoing challenges relating to its environmental impact statement for the Cerro San Pedro Mine; the lack of certainty with respect to the Mexican and other 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 the company is or may become a party to, including the third party claim related to the El Morro transaction with respect to New Gold's exercise of its right of first refusal on the El Morro copper-gold project in Chile and its partnership with Goldcorp Inc., which transaction and third party claim were announced by New Gold in January 2010; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; 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. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as "Risks Factors" included in New Gold's Annual Information Form filed on March 26, 2010 and Management Information Circular filed on April 15, 2009, both available at www.sedar.com. 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.

New Gold Announces Update Related to Sale of Amapari Mine

Wed, 31 Mar 2010 08:24:00 -0400

(All figures are in US dollars unless otherwise stated)

VANCOUVER, March 31 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX: NGD) today announces that Beadell Resources Ltd. ("Beadell") has received bids from investors to subscribe for at least A$57 million of ordinary shares of Beadell in relation to the previously-disclosed sale of New Gold's Brazilian subsidiary Mineração Pedra Branca do Amapari Ltda. ("MPBA"), which holds the Amapari mine and other related assets. Due to increased volatility in the gold market since the initial transaction announcement in January 2010, certain terms of the transaction have been revised and New Gold expects to receive $37 million in cash and $16 million in Beadell shares as consideration for the sale of MPBA, versus $46 million in cash and $17 million in Beadell shares as previously disclosed. Under the revised terms, New Gold will hold approximately 19.9% of Beadell. New Gold's objective of receiving meaningful cash proceeds for the non-core Amapari asset is expected to be realized, subject to closing, and under the revised terms New Gold should have a greater share of Beadell equity and related participation in the future success of Amapari. Beadell is an Australian listed gold-focused company with exploration and development assets in Western Australia and Brazil.

"We are pleased that Beadell has completed the book build and, upon closing, the cash proceeds will only help to further enhance our financial flexibility," stated Randall Oliphant, Executive Chairman. "We have been successful in monetizing a non-core asset for meaningful cash proceeds and also remain keen to participate as shareholders of Beadell and look forward to the group's future success at Amapari as well as their other assets."

Beadell shareholders formally approved the equity offering and related transaction at a Shareholder Meeting held on March 12, 2010 and the transaction is expected to close by mid-April.

About New Gold

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 may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Brazil, Mexico and Chile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Brazil, Mexico and Chile 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 that New Gold operates, including, but not limited to, Mexico, where New Gold is involved with ongoing challenges relating to its environmental impact statement for the Cerro San Pedro Mine; the lack of certainty with respect to the Mexican and other 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 the company is or may become a party to, including the third party claim related to the El Morro transaction with respect to New Gold's exercise of its right of first refusal on the El Morro copper-gold project in Chile and its partnership with Goldcorp Inc., which transaction and third party claim were announced by New Gold in January 2010; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; 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. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as "Risks Factors" included in New Gold's Annual Information Form filed on March 26, 2010 and Management Information Circular filed on April 15, 2009, both available at www.sedar.com. 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.

New Gold's Cerro San Pedro Mine Receives Explosives Permit and Resumes Full Operations

Wed, 17 Mar 2010 16:30:00 -0400

VANCOUVER, March 17 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX: NGD) announces that the restrictions to the Cerro San Pedro mine's explosives permits have been removed which allows full operations to resume. The restrictions were lifted following a ruling by a Federal District Court in San Luis Potosi that overturns an earlier court order prohibiting the use of explosives at the mine. The renewal of the explosives permit was originally challenged by a group opposed to the mine.

"We are very pleased with the outcome of this hearing and the continued progress that is being made towards a long-term solution that should enable uninterrupted operations at Cerro San Pedro," stated New Gold's President and CEO, Robert Gallagher. "New Gold's Cerro San Pedro Mine has an enviable record of compliance with Mexican and international environmental standards and enjoys overwhelming local support as a valuable corporate citizen."

Hearings are ongoing in relation to appeals against the nullification of the Cerro San Pedro mine's 2006 Environmental Impact Statement and the related order suspending mining operations issued by PROFEPA, the Mexican environmental enforcement agency. The shutdown order was suspended, allowing operations to continue pending the outcome of the appeal cases. New Gold is working with local and federal government officials to establish a long-term solution that should result in uninterrupted operation of the Cerro San Pedro mine allowing for continued financial and socio-economic benefits to the city of San Luis Potosi, the town of Cerro San Pedro as well as the surrounding villages.

As the Cerro San Pedro mine is a heap leach operation with the ability to increase the use of leased mining equipment, New Gold expects to be able to offset the impact to production that resulted from the delayed granting of the blasting permit. The company maintains its gold production forecast at Cerro San Pedro for 2010 of 95,000 to 105,000 ounces at a total cash cost(1) of $390 to $410 per ounce sold, net of by-product sales.

About New Gold

New Gold is an intermediate gold mining company with the Mesquite Mine in the United States, Cerro San Pedro Mine in Mexico and Peak Mines in Australia. The company is expected to produce between 330,000 and 360,000 ounces of gold in 2010, growing to over 400,000 ounces in 2012. In addition, New Gold has a strong portfolio of development and exploration assets in North and South America. 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 may be deemed "forward-looking". All statements in this news release, other than statements of historical fact, that address events 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 words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements 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. 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 New Gold's 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; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Brazil, Mexico and Chile; price volatility in the spot and forward markets for commodities; impact of any hedging activities, including margin limits and margin calls; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Brazil, Mexico and Chile 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 that New Gold operates, including, but not limited to, Mexico, where New Gold is involved with ongoing challenges relating to its environmental impact statement for Cerro San Pedro Mine; the lack of certainty with respect to the Mexican and other 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 the company is or may become a party to, including the third party claim related to the El Morro transaction with respect to New Gold's exercise of its right of first refusal on the El Morro copper-gold project in Chile and its partnership with Goldcorp Inc.; diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; 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. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance, to cover these risks) as well as "Risks Factors" included in New Gold's Annual Information Form filed on March 31, 2009 and Management Information Circular filed on April 15, 2009, both available at www.sedar.com. 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.

(1) TOTAL CASH COSTS

New Gold Announces Record Gold Production and Cash Flow for Fourth Quarter and Year Ended 2009

Thu, 04 Mar 2010 13:03:00 -0500

(All figures are in U.S. dollars unless otherwise indicated)

VANCOUVER, March 4 /CNW/ - New Gold Inc. ("New Gold") (TSX and NYSE AMEX: NGD) today announces financial and operational results for the fourth quarter and year ended 2009. The company had its best operational year, exceeding gold production guidance at lower than forecasted total cash costs(1) resulting in record cash flow for New Gold. New Gold is also pleased to re-iterate its guidance for 2010 with forecast gold production expected to increase further to between 330,000 and 360,000 ounces at total cash cost(1) of $445 to $465 per ounce sold, net of by-product sales.

Fourth Quarter and Full Year 2009 Highlights

Results presented below are for the period of ownership for the Mesquite (June 1, 2009) and Cerro San Pedro mines (June 30, 2008).

    -   Highest quarterly gold production for the company in the fourth
        quarter with an increase of 41% to 111,672 ounces from 78,950 ounces
        in the same period in 2008

    -   Total cash cost(1) in the fourth quarter decreased 17% to $472 per
        ounce sold, net of by-product sales, from $567 per ounce sold in the
        same period in 2008

    -   Cash flow from operations of $54.4 million in the fourth quarter 2009
        versus $17.3 million in the same period in 2008

    -   Gold production in 2009 increased 29% to 301,773 ounces from 233,103
        ounces in 2008

    -   Total cash cost(1) in 2009 decreased 18% to $465 per ounce sold, net
        of by-product sales, from $566 per ounce sold in 2008

    -   Cash flow from operations of $79.0 million for 2009 versus $23.1
        million in the prior year

    -   2009 year-end cash balance of $271.5 million, including $9.2 million
        of restricted cash, versus $182.0 million in 2008

    -   Additional net cash of $70.1 million received after year end from
        sale of asset backed notes ($47.3 million) and payment from Goldcorp
        ($50.0 million) less Mesquite term loan pre-payment ($27.2 million)

"2009 was an exceptional year for New Gold on so many levels," stated Randall Oliphant, Executive Chairman. "Our operational performance beat guidance on both production and costs, leading to record cash flow for our company. Combining this cash flow with the cash received from our corporate development initiatives has significantly enhanced the company's financial flexibility and positions us extremely well as we look for opportunities to continue growing our business."

Fourth Quarter and Full Year 2009 Consolidated Financial Results

Consolidated revenue for the fourth quarter of 2009 was $131.8 million for a total of $323.8 million for the full year, compared to $36.7 million and $143.1 million for the same periods in 2008. Revenues increased in 2009 as a result of additional gold sales from the Mesquite mine after the business combination with Western Goldfields Inc. as well as higher average realized gold prices in 2009.

Earnings from mine operations for the fourth quarter of 2009 were $39.7 million for a total of $88.6 million for the full year compared to a loss from mine operations of $14.6 million and earnings from mine operations of $21.4 million for the same periods in 2008. The increase in earnings from mine operations in 2009 was driven by increased gold sales, higher average realized gold prices and lower total cash cost(1) during the year.

The net loss in the fourth quarter and full year 2009 was $7.7 million or $0.02 per share and $194.3 million or $0.64 per share, respectively. This compares to net income in the fourth quarter and a net loss for the full year 2008 of $41.1 million or $0.19 per share and $102.7 million or $0.69 per share, respectively. The full year 2009 net loss included a pre-tax $192.1 million goodwill impairment charge and a pre-tax $52.7 million foreign exchange translation loss while the full year 2008 net loss included a loss from discontinued operations (Amapari) of $173.6 million and a pre-tax $68.8 million foreign exchange translation gain.

Cash flow from operations for the fourth quarter of 2009 was $54.4 million for a total of $79.0 million for the full year, both over three times the $17.3 million and $23.1 million in cash flow from operations for the same periods in 2008. The cash flow generated was the highest in New Gold's history and was underpinned by the company's strong operating performance during the year.

New Gold's cash balance at the end of the year was $271.5 million, including $9.2 million of restricted cash, representing a significant increase over the year-end 2008 cash balance of $182.0 million. In addition, subsequent to year end, the company received $97.3 million in cash from the sale of asset backed notes ($47.3 million) and on completion of its transaction with Goldcorp related to the El Morro asset ($50.0 million). New Gold's debt balance at the end of 2009 was $237.5 million. The total debt balance was reduced by $27.2 million after the year end as the Mesquite term loan facility was fully re-paid leaving the company with $210.3 million in debt, the majority of which is due in 2017.

2009 Operational Review

All three of New Gold's operating mines had excellent gold production results with Cerro San Pedro and Peak Mines also producing silver and copper, respectively, above guidance. As anticipated, the Mesquite mine achieved its highest quarterly production since the mine was brought back into production in January 2008 with 61,245 ounces of gold produced during the fourth quarter. Across its operations, New Gold's total cash cost(1) for 2009 was $465 per ounce of gold sold, net of by-product sales, below the guidance range of $470 to $490 per ounce of gold sold and considerably below the $566 per ounce of gold sold in 2008.

Fourth quarter and full year results for 2009 are presented in the table below, for the period of ownership for the Mesquite (June 1, 2009) and Cerro San Pedro (June 30, 2008) mines.

    -------------------------------------------------------------------------
                                                      Full Year    Full Year
                               Q4-2008      Q4-2009      2008         2009
    -------------------------------------------------------------------------
    Production
    -------------------------------------------------------------------------
      Mesquite Gold oz              -       61,245            -       99,298
    -------------------------------------------------------------------------
      Cerro San Pedro
           Gold oz             21,231       25,781       45,618       95,502
           Silver oz          290,520      312,848      572,575    1,496,958
    -------------------------------------------------------------------------
      Peak Mines
           Gold oz             27,618       24,646      100,493       93,247
           Copper m lbs           2.5          3.9          8.2         15.6
    -------------------------------------------------------------------------
      Amapari Gold oz          30,101            -       86,992       13,726
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total Production
    -------------------------------------------------------------------------
      Gold oz                  78,950      111,672      233,103      301,773
    -------------------------------------------------------------------------
      Copper m lbs                2.5          3.9          8.2         15.6
    -------------------------------------------------------------------------
      Silver oz               290,520      312,848      572,575    1,496,958
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gold sales oz              78,194      106,475      237,590      292,407
    -------------------------------------------------------------------------
    Total cash cost/oz           $567         $472         $566         $465
    -------------------------------------------------------------------------

Historical results presented below include gold production, sales and total cash cost(1) for the full year of 2009 and 2008, and include periods prior to the acquisition of the Mesquite (June 1, 2009) and Cerro San Pedro Mines (June 30, 2008).

Mesquite Mine

Gold production in the fourth quarter at Mesquite increased by 116% to 61,245 ounces from 28,378 ounces produced in the fourth quarter 2008, resulting in 2009 full year production of 150,002 ounces versus 108,325 ounces in the prior year. Gold sales were 55,861 ounces in the fourth quarter and 143,509 ounces in full year 2009 compared to 30,625 and 110,880 ounces in the same periods of 2008. Both the fourth quarter and full year 2009 production and sales benefitted from higher tonnes placed on the leach pad and increased recoveries from secondary leaching.

Total cash cost(1) per ounce of gold sold for the fourth quarter of 2009 was $551 compared to $519 in the fourth quarter of 2008 and $596 per ounce of gold sold for full year 2009 compared to $508 in 2008. The total cash cost(1) increase is mainly attributable to increased diesel consumption from higher tonnes moved, increased usage of cyanide and lime to improve gold recoveries, use of a contractor to accelerate stripping and certain non-recurring maintenance costs.

As part of New Gold's 2009 update to mineral reserves and resources, Mesquite's proven and probable mineral reserves increased by 0.5 million ounces when compared to the end of 2008. These additional reserves should allow the team at Mesquite to extend the mine life and/or increase annual throughput going forward.

Further, during 2010, New Gold plans to evaluate various treatment alternatives for the sulphide resource that currently lies directly beneath the pits being mined at Mesquite. The deeper sulphide resource is not currently part of the mine plan due to the lower recovery rates achieved on sulphides via heap leaching. However, if a processing methodology can be established to bring the recoveries up and thus make the deeper sulphides economic this could, not only potentially increase the mineral reserves base, but New Gold also believes there may be potential to explore for additional sulphide resources as previous operators of the Mesquite mine largely stopped drilling when sulphides were reached below the base of the oxide mineralization. New Gold will provide further updates on this evaluation during the year.

Gold production for 2010 is forecast to be 145,000 to 155,000 ounces at a total cash cost(1) of $540 to $560 per ounce sold. Capital expenditures at Mesquite are forecast to be $14.6 million in 2010.

Cerro San Pedro Mine

Gold production in the fourth quarter at Cerro San Pedro increased by 21% to 25,781 ounces from 21,231 ounces produced in the fourth quarter of 2008, resulting in 2009 full year production of 95,502 ounces versus 84,561 ounces in the prior year. Gold sales were 24,455 ounces in the fourth quarter and 93,312 ounces in full year 2009 compared to 21,180 and 85,362 ounces in the same periods of 2008. The increase in gold production and sales was due to increased tonnes of ore mined and further improved leach pad recoveries, partially offset by lower gold grades.

Silver production increased in the fourth quarter to 312,848 ounces from 290,520 ounces in the fourth quarter of 2008, resulting in full year production of 1.5 million ounces compared to 1.1 million ounces in 2008. The increase in silver production is attributed to higher tonnes of ore mined and increased silver recoveries.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the fourth quarter of 2009 was $436 compared to $487 in the fourth quarter of 2008, and $407 per ounce of gold sold, net of by-product sales, for full year 2009 compared to $399 in 2008. The decrease in total cash cost(1) in the fourth quarter is due to the temporary shutdown of mining operations during the quarter and increased silver by-product credits from both higher silver production and higher realized silver prices.

During 2009, through the drilling of 29 core holes extending from the bottom of the Cerro San Pedro open pit, the company established a 3.5 million ounce inferred sulphide gold resource with an additional 76 million ounces of silver as well as lead and zinc. New Gold was very pleased with this initial resource and intends to further evaluate the results with a view to completing preliminary metallurgical testing, evaluating potential economics and completing additional drilling during 2010.

In respect of the opposition to mining operations at Cerro San Pedro, New Gold continues to work diligently with local and federal governmental groups in an effort to establish a long term solution that allows the company to continuously operate the Cerro San Pedro mine and thus provide ongoing economic benefits to the local people and community. New Gold's management believes the Cerro San Pedro Mine has been operating in full compliance with required permits and government authorizations.

Throughout the temporary suspensions, New Gold has been permitted to continue the leaching process and is producing gold and silver. Further, as the Cerro San Pedro Mine uses equipment leased from a large construction contractor, the Company should be able to increase the mining rate once current legal challenges are addressed.

The gold production forecast for 2010 remains 95,000 to 105,000 ounces at a total cash cost(1) of $390 to $410 per ounce sold, net of by-product sales. Capital expenditures at Cerro San Pedro are forecast to be $10.8 million in 2010.

Peak Mines

Gold production in the fourth quarter at Peak was 24,646 ounces versus 27,618 ounces produced in the fourth quarter of 2008, resulting in 2009 full year production of 93,247 ounces versus 100,493 ounces in the prior year. Gold sales were 26,159 ounces in the fourth quarter and 87,812 ounces in full year 2009 compared to 28,815 and 102,928 ounces in the same periods of 2008. The decrease in gold production and sales was primarily due to a lower average realized gold grade when compared to 2008.

Copper production increased in the fourth quarter to 3.9 million pounds from 2.5 million pounds in the fourth quarter of 2008, resulting in full year production of 15.6 million pounds compared to 8.2 million pounds in 2008. The increase in copper production year-over-year was attributable to mining of higher grade copper zones during the year.

Total cash cost(1) per ounce of gold sold, net of by-product sales, for the fourth quarter of 2009 was $339 compared to $624 in the fourth quarter of 2008 and $334 per ounce of gold sold, net of by-product sales, for full year 2009 compared to $477 in 2008. The decrease in total cash cost(1) is a result of increased copper sales from increased volumes.

During 2009, Peak Mines once again successfully replaced the mineral reserves that it mined during the year. Peak has a long history of such reserve replacement having started operations in 1992 with approximately one million ounces of total resources. Over its life, Peak has mined over two million ounces and today still has 0.8 million ounces of measured and indicated resources with an additional 0.4 million ounces of inferred resources. Through additional underground and surface drilling in 2010, the company plans to continue this history of reserve replacement.

Gold production for 2010 is forecast to be 90,000 to 100,000 ounces at a total cash cost(1) of $360 to $380 per ounce sold, net of by-product sales. Capital expenditures at Peak Mines are forecast to be $31.9 million in 2010.

New Afton Project

New Gold's primary development project continued on schedule during the fourth quarter and is expected to commence production in the second half of 2012. The project will be an underground mine and concentrator which is expected to produce an annual estimated average of 85,000 ounces of gold, and 75 million pounds of copper.

During the fourth quarter of 2009, the New Afton underground development crews achieved their highest quarterly advance for the year, completing 634 metres compared to 453 metres during the third quarter of 2009. For full year 2009, 1,708 metres of underground development were completed. Project spending for the fourth quarter was $26.1 million, including $5.0 million of capitalized interest, resulting in full-year 2009 capital spending of $76.1 million, including $21.1 million of capitalized interest.

As New Gold's financial position has significantly improved, the company has decided to move forward approximately $50 million of surface construction related capital into 2010 that was previously budgeted for 2011 and 2012. This will not impact the overall capital spend on the project, but will help de-risk both the overall capital cost and timeline to production as it helps spread out surface development activities over the next two and a half years. In conjunction with re-commencing some of this surface construction, New Afton will continue to focus on underground development in 2010 with projected capital expenditures for the year totalling $119.9 million, including capitalized interest.

El Morro Project

As announced on February 16, 2010, a New Gold subsidiary closed the acquisition of Xstrata's 70% interest in the El Morro project in Chile held by Xstrata Copper Chile S.A, a wholly-owned subsidiary of Xstrata Plc. The acquisition resulted from the exercise of a right of first refusal held by a New Gold subsidiary, as originally announced on January 7, 2010.

New Gold also announced the subsequent completion of the transactions under the Acquisition Funding Agreement with Goldcorp Inc. ("Goldcorp"), which resulted in a Goldcorp subsidiary holding the 70% interest in El Morro and New Gold indirectly retaining a 30% interest. Through the subsequent transaction with Goldcorp, New Gold received $50 million and the terms of the El Morro Shareholders Agreement were amended.

Transaction highlights for New Gold:

    -   $50 million received

    -   Goldcorp to fund 100% of New Gold's share of the development and
        construction capital for the project

    -   Lower interest rate on funding advance by Goldcorp - U.S. seven-year
        Treasury Rate plus 187 basis points (approx 4.99% as at February 16,
        2010)

    -   Penalty payment if construction does not commence within 60 days of
        receipt of required permits and approvals ($1.5 million per month up
        to a maximum of 24 months)

    -   Continued participation in world-class project

On January 13, 2010, Barrick Gold Corporation ("Barrick") commenced legal proceedings to attempt to challenge New Gold's exercise of its right of first refusal to acquire Xstrata's interest in the El Morro project.

New Gold believes that the claim is without merit. New Gold intends to respond to this action using all available legal avenues.

Amapari - Pending Sale

As announced on January 27, 2010, New Gold signed an agreement to sell its Brazilian subsidiary Mineracao Pedra Branca do Amapari Ltda. ("MPBA"), which holds the Amapari mine and other related assets, to Beadell Resources Ltd. ("Beadell") (ASX-BDR) for $63 million. Beadell is an Australian listed gold-focused company with exploration and development assets in Western Australia and Brazil.

Proceeds to New Gold of $46 million in cash and $17 million in Beadell shares are contingent on the successful completion of an A$75 million equity offering by Beadell and related shareholder approvals.

The transaction is expected to close in March 2010.

Key Financial Information

At December 31, 2009, New Gold had $271.5 million of cash, including $9.2 million in restricted cash. The consolidated debt position of the company was $237.5 million which includes $169.0 million of 10% senior secured notes (C$187.0 million), $37.6 million of 5% convertible debentures (face value of C$55.0 million), $27.2 million of the Mesquite project term loan and $3.7 million in El Morro funding loans. The senior secured notes are due in 2017 and the convertible debentures are due in 2014 and have a C$9.35 conversion price. The $27.2 million of Mesquite project term loan was repaid in February 2010, leaving the company with $210.3 million in debt.

Subsequent to the year end, New Gold received $47.3 million in cash proceeds from the sale of asset backed notes in January 2010 and $50.0 million upon closing of the Goldcorp transaction related to the El Morro asset. In February 2010, the company also pre-paid the total outstanding balance of $27.2 million related to the Mesquite project term loan. After adjusting for these items, when comparing New Gold's financial position to year-end 2008, the company has approximately doubled its cash position and lowered the overall debt outstanding. Importantly, New Gold now does not have any debt due until 2014, well after New Afton is in production and generating cash flow.

New Gold's cash balance, combined with the future cash flow generation of the company and the long-term nature of the majority of the debt, leaves the company in an excellent financial position.

2010 Guidance

As New Gold looks forward to 2010, the company expects to realize an increase in gold production primarily resulting from a full year of production from Mesquite. The company also expects increased production of silver and copper, helping to further reduce costs when compared to 2009.

    -------------------------------------------------------------------------
          Mine          Actual 2009      Forecast                  Forecast
                           Gold         2010 Gold    Actual 2009     2010
                        Production      Production   Total Cash   Total Cash
                           (oz.)          (oz.)        Cost(1)      Cost(1)
    -------------------------------------------------------------------------
    Mesquite               99,298    145,000-155,000    $596       $540-$560
    -------------------------------------------------------------------------
    Cerro San Pedro        95,502     95,000-105,000    $405       $390-$410
    -------------------------------------------------------------------------
    Peak Mines             93,247     90,000-100,000    $335       $360-$380
    -------------------------------------------------------------------------
    Amapari                13,726           --          $696           --
    -------------------------------------------------------------------------
    Total                 301,773    330,000-360,000    $462       $445-$465
    -------------------------------------------------------------------------
    Note:  Cerro San Pedro and Peak Mines total cash cost(1) are net of by-
           product sales. Amapari was put on Care and Maintenance on January
           2, 2009. 2009 Mesquite production represents partial year from
           June 1, 2009 forward.

Assumptions used in the 2010 forecast include silver and copper prices of $15.00 per ounce and $2.75 per pound, respectively, and Canadian dollar, Australian dollar and Mexican peso exchange rates of $1.11, $1.18 and $13.00 to the U.S. dollar, respectively.

Conference Call-in and Webcast

New Gold will hold a conference call and webcast on Friday, March 5th at 8:00 a.m. Eastern Standard Time to discuss the 2009 fourth quarter and year-end results. Anyone may join the call by dialling toll-free 1-866-696-5910 or 1-416-340-2217 to access the call from outside Canada or the U.S. (Passcode 1356226). You can listen to a recorded playback of the call after the event until April 16, 2010 by dialling 1-800-408-3053 or 1-416-695-5800 for calls outside Canada and the U.S. (Passcode 5620573).

A live and archived webcast will also be available at www.newgold.com.

About New Gold

Mark Petersen, qualified person under NI43-101 and employee of the company, has reviewed the technical information contained in this news release.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED 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 accordance with NI 43-101 under guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council on December 11, 2005. While the terms "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and "Inferred Mineral Resource" are recognized and required by Canadian regulations, they are not defined terms under standards of the United States Securities and Exchange Commission. 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 calculation is made. As such, certain information contained in this news release concerning descriptions of mineralization and 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. 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. Readers are cautioned not to assume that all or any part of Measured or Indicated 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. 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.

(1) TOTAL CASH COSTS

    New Gold Inc.
    Consolidated Statements of Operations
    Three and twelve month periods ended December 31
    (Expressed in thousands of U.S. dollars, except share and per share
     amounts) (unaudited)

                                  Three months ended     Twelve months ended
                                         December 31             December 31
    -------------------------------------------------------------------------
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
                                       $           $           $           $

    Revenues                     131,765      36,737     323,780     143,083
    Operating expenses           (67,369)    (44,171)   (176,491)   (103,130)
    Depreciation and depletion   (24,714)     (7,168)    (58,668)    (18,551)
    -------------------------------------------------------------------------
    Earnings from mine
     operations                   39,682     (14,602)     88,621      21,402

    Corporate administration      (9,390)     (7,400)    (24,689)    (22,446)
    Business combination
     transaction costs                 -           -      (6,583)          -
    Exploration                   (1,317)       (888)     (6,412)     (4,026)
    Goodwill impairment charge    (2,465)          -    (192,099)          -
    -------------------------------------------------------------------------

    Loss from operations          26,510     (22,890)   (141,162)     (5,070)
    Other income (expense)
      Realized and unrealized
       gain on gold contracts        905           -       8,161           -
      Realized and unrealized
       gain on fuel contracts          -           -         797           -
      Realized and unrealized
       loss on investments       (14,636)          -         351           -
      Interest and other income    1,363         288       4,896       5,374
      Gain on redemption of
       long-term debt                  -           -      14,236           -
      Interest and finance fees     (761)       (431)     (3,140)     (1,507)
      Gain (loss) on foreign
       exchange                  (11,181)     53,971     (52,667)     68,819
    -------------------------------------------------------------------------

    Earnings (loss) before taxes   2,200      30,938    (168,528)     67,616
    Income and mining taxes       (4,495)      8,473     (14,906)      3,268
    -------------------------------------------------------------------------

    Net earnings (loss) from
     continuing operations        (2,295)     39,411    (183,434)     70,884
    Loss from discontinued
     operations, net of taxes     (5,355)      1,724     (10,882)   (173,563)
    -------------------------------------------------------------------------
    Net earnings (loss)           (7,650)     41,135    (194,316)   (102,679)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss) per share
     from continuing operations
      Basic                        (0.01)       0.18       (0.60)       0.48
      Diluted                      (0.01)       0.18       (0.60)       0.48
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss) per share
     from discontinued
     operations, net of taxes
      Basic                        (0.01)       0.01       (0.04)      (1.17)
      Diluted                      (0.01)       0.01       (0.04)      (1.17)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss) per share
      Basic                        (0.02)       0.19       (0.64)      (0.69)
      Diluted                      (0.02)       0.19       (0.64)      (0.69)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number
     of shares outstanding
     (in thousands)
      Basic                      388,512     212,836     306,288     148,126
      Diluted                    388,512     212,848     306,228     148,616
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (i) Stock option expense
         (a non-cash item
         included in corporate
         administration)          (1,775)     (1,327)     (6,621)     (7,039)



    New Gold Inc.
    Consolidated Balance Sheets
    Year ended December 31, 2009
    (Expressed in thousands of U.S. dollars) (unaudited)
    -------------------------------------------------------------------------
                                                            2009        2008
    -------------------------------------------------------------------------
                                                               $           $

    Assets
    Current assets
      Cash and cash equivalents                          262,325     182,013
      Restricted cash                                      9,201           -
      Accounts receivable                                 10,345      11,232
      Inventories                                         86,299      23,265
      Future income and mining taxes                       8,848       2,690
      Current portion of mark-to-market gain
       on fuel contracts                                     706           -
      Prepaid expenses and other                           6,933       4,991
      Current assets of operations held for sale          10,298      18,746
    -------------------------------------------------------------------------
    Total current assets                                 394,955     242,937

    Investments                                           45,890      77,016
    Mining interests                                   2,000,438   1,609,224
    Future income tax asset                                2,250           -
    Reclamation deposits and other                        17,646       4,900
    Assets of operations held for sale                    27,080      23,624
    -------------------------------------------------------------------------
    Total assets                                       2,488,259   1,957,701
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities            36,033      28,759
      Current portion of long-term debt                   12,088           -
      Current portion of mark-to-market loss
       on gold contracts                                  19,206           -
      Income and mining taxes payable                     15,677       5,126
      Current liabilities of operations held for sale     10,414      20,120
    -------------------------------------------------------------------------
    Total current liabilities                             93,418      54,005

    Reclamation and closure cost obligations              19,889       8,701
    Mark-to-market loss on gold contracts                 76,780           -
    Future income and mining taxes                       316,426     224,068
    Long-term debt                                       225,456     212,387
    Employee benefits and other                            5,355       3,808
    Liabilities of operations held for sale               19,890      12,944
    -------------------------------------------------------------------------
    Total liabilities                                    757,214     515,913
    -------------------------------------------------------------------------

    Shareholders' equity
    Common shares                                      1,810,865   1,321,110
    Contributed surplus                                   82,984      65,409
    Share purchase warrants                              150,656     145,614
    Equity component of convertible debentures            21,604      21,604
    Accumulated other comprehensive loss                 (29,205)       (406)
    Deficit                                             (305,859)   (111,543)
    -------------------------------------------------------------------------
                                                        (335,064)   (111,949)
    -------------------------------------------------------------------------
    Total shareholders' equity                         1,731,045   1,441,788
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity         2,488,259   1,957,701
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    New Gold Inc.
    Consolidated Statements of Cash Flows
    Three and twelve month periods ended December 31
    (Expressed in thousands of U.S. dollars) (unaudited)

                                  Three months ended     Twelve months ended
                                         December 31             December 31
    -------------------------------------------------------------------------
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
                                       $           $           $           $

    Operating activities
      Net Earnings (Loss)         (7,650)     41,135    (194,316)   (102,679)
      Earnings (loss) from
       discontinued operations     5,355      (1,724)     10,882     173,563
      Items not involving cash
        Goodwill impairment
         charge                    2,465           -     192,099           -
        Unrealized and realized
         gain on gold contracts   (3,051)          -     (12,389)          -
        Unrealized loss (gain)
         on fuel contracts           156           -        (523)          -
        Unrealized foreign
         exchange loss (gain)      9,696     (55,609)     46,057     (66,677)
        Depreciation and
         depletion                25,266       7,273      59,473      18,866
        Stock option expense       1,775       1,327       6,621