Last updated on April 23, 2014 at 1:22 EDT

New Gold Announces Preliminary Economic Assessment at Blackwater

September 20, 2012

Annual Gold Production Over 500,000 Ounces at Well Below Industry
Average Cash Costs

(All figures are in US dollars unless otherwise indicated)

VANCOUVER, Sept. 20, 2012 /PRNewswire/ – New Gold Inc. (“New Gold”) (TSX and
NYSE MKT:NGD) today announces a positive Preliminary Economic
Assessment (“PEA”) for its Blackwater Gold Project (“Blackwater” or the
“Project”) in British Columbia, Canada. Over the initial 15 years of
its mine life, Blackwater is estimated to produce an annual average of
507,000 ounces of gold and 2,039,000 ounces of silver at total cash
costs((1)) per ounce sold, net of by-product sales, of $536 per ounce. At assumed
gold and silver prices of $1,275 and $22.50 per ounce and a 0.94
US$/CDN$ foreign exchange rate, the Project is expected to yield a base
case after-tax, 5% net present value (“NPV”) of $1.1 billion and an
after-tax internal rate of return (“IRR”) of 14.0%. At spot commodity prices of $1,775 per ounce gold and $34.50 per ounce
silver and a parity exchange rate, the after-tax, 5% NPV and IRR move
to $2.8 billion and 25.8%, respectively. All NPV calculations are calculated to the beginning of the
construction period in 2015. The PEA was completed on a pre-tax basis
by AMEC Americas Limited (“AMEC”), an independent and
internationally-recognized engineering firm. All after-tax calculations
were completed by New Gold.

Preliminary Economic Assessment Highlights

        --  Conventional truck and shovel open pit mine with 60,000 tonne
            per day ("tpd") whole ore leach process plant
        --  Start of production targeted for 2017
        --  Initial 15-year mine life with additional 1.4 years of
            processing low grade stockpile at end of pit life
        --  Life-of-mine strip ratio of 2.36 to 1.00 of waste to
            mineralized material
        --  Life-of-mine gold and silver recoveries of 87% and 53%,
        --  Life-of-mine gold and silver production, inclusive of low grade
            stockpile, of 6.2 and 18.6 million ounces from the Indicated
            category and 1.8 and 13.5 million ounces from the Inferred
            category, respectively
        --  Development capital costs of $1.8 billion inclusive of 24
            percent, or $346 million, contingency
        --  Higher grade initial five years resulting in accelerated
            payback of capital costs
      o First five years - average annual gold production of 569,000 ounces
        at total cash costs(1) per ounce sold, net of by-product sales, of
        $467 per ounce
        --  Base Case - After-tax 5% NPV, IRR and payback at $1,275 per
            ounce gold, $22.50 per ounce silver and a 0.94 US$/CDN$ foreign
            exchange rate of $1.1 billion, 14.0% and 4.8 years,
        --  Spot Case - After-tax 5% NPV, IRR and payback at spot prices of
            $1,775 per ounce gold, $34.50 per ounce silver and a parity
            US$/CDN$ foreign exchange rate of $2.8 billion, 25.8 percent
            and 2.7 years, respectively

The PEA is preliminary in nature and includes Inferred mineral resources
that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized
as mineral reserves, and there is no certainty that the PEA based on
these mineral resources will be realized. Mineral resources that are
not mineral reserves do not have demonstrated economic viability.

“We are very pleased to have delivered this important project milestone
at Blackwater just 15 months after acquiring the property,” stated
Randall Oliphant, Executive Chairman. “We feel fortunate to have
Blackwater in our portfolio. Our flagship property is expected to
produce over half a million ounces of gold per year at low cash costs
in a great jurisdiction. Blackwater should generate robust economic
returns even at a gold price that is $500 per ounce below where it
trades today.”

“The completion of the PEA and upcoming filing of our Project
Description allow us to formally begin the permitting process for
Blackwater,” added Robert Gallagher, President and Chief Executive
Officer. “With the benefit of our permitting and development track
record and strong stakeholder relationships at New Afton and in the
Blackwater area, we look forward to advancing Blackwater with similar

The PEA resource is based on drill results up to mid-May 2012. Since
then, New Gold’s exploration program has continued apace and the
company looks forward to incorporating these additional results in the
Project’s Feasibility Study scheduled for completion in 2013. Beyond
the primary Blackwater deposit that forms the basis of this PEA,  the
company’s total land package is now over 1,000 square kilometres. New
Gold looks forward to continuing its exploration efforts within and
around the Capoose gold-silver deposit, located approximately 25
kilometres from Blackwater, as well as the multiple exploration targets
that have been identified through New Gold’s 2012 property-wide
reconnaissance program.

Mineral Resource Estimate

The Blackwater mineral resource was tabulated within a conceptual open
pit at 0.25, 0.30 and 0.40 gram per tonne gold equivalent cut-off
values using $1,300 per ounce gold and $24 per ounce silver as shown
below. At a base case lower cut-off of 0.30 gram per tonne gold
equivalent, the deposit contains an Indicated mineral resource of 267
Mt at 0.88 g/t gold and 4.3 g/t silver and an Inferred mineral resource
of 121 Mt at 0.69 g/t gold and 7.3 g/t silver. The mineral resource
estimate is CIM 2010 compliant and prepared under Canadian National
Instrument 43-101 and is based on a block model estimate that
incorporates over 147,282 individual assays from 168,709 metres of
diamond drill core in 449 drill holes. Average drill hole spacing of
approximately 50 metres is sufficient to support mineral resource
estimation up to the Indicated category. The drill hole database was
supported by approximately 40,000 quality assurance/quality control
(QA/QC) check assays, representing approximately 28% of the total
sample assay dataset. The mineral resource includes drill data received
through May 14, 2012 and thus excludes the potential success from
additional drilling during New Gold’s exploration program since that
time. The company has drilled an additional 100,363 metres in 377 drill
holes since the mid-May cut-off for the resource database. A portion of
this additional drilling was intended to support upgrades in resource
confidence categories as part of the company’s targeted completion of a
Feasibility Study next year.

    |                           Blackwater PEA Mineral Resource Estimate          |
    |         Indicated Mineral Resource   |         Inferred Mineral Resource    |
    | AuEq  |Tonnes| Au  | Ag  | Au  | Ag  | AuEq  |Tonnes| Au  | Ag  | Au  | Ag  |
    |Cut-off| (Mt) |(g/t)|(g/t)|(Moz)|(Moz)|Cut-off| (Mt) |(g/t)|(g/t)|(Moz)|(Moz)|
    | (g/t) |      |     |     |     |     | (g/t) |      |     |     |     |     |
    |  0.25 |280.4 |0.85 | 4.2 |7.64 |37.9 |  0.25 |128.6 |0.66 | 7.0 |2.72 |28.9 |
    |  0.30 |267.1 |0.88 | 4.3 |7.52 |36.9 |  0.30 |120.5 |0.69 | 7.3 |2.66 |28.3 |
    |  0.40 |230.6 |0.96 | 4.6 |7.14 |34.1 |  0.40 | 98.9 |0.77 | 7.8 |2.45 |24.8 |


      1. Mineral Resource Estimate has an effective date of July 27, 2012
         and was prepared by Ronald G. Simpson, P Geo.
      2. Mineral Resources that are not Mineral Reserves do not have
         demonstrated economic viability.
      3. Mineral Resources are amenable to open pit mining methods as
         defined by a Lerchs-Grossmann optimized pit simulation.
      4. The Lerchs-Grossmann optimized pit is based on assumptions that
         include US$/CDN$ parity foreign exchange rate, 83.6% gold
         recovery, 44.9% silver recovery, $1.52/tonne mining cost,
         $1.90/tonne waste mining cost, $10.52/tonne process and G&A cost.
         No allowances have been made for mining losses and dilution. The
         average pit slope angle is assumed to be 40°.
      5. The base case gold equivalent (AuEq) cut-off (bolded) is greater
         than the conceptual marginal cut-off of 0.23 g/t.
      6. AuEq = $24/oz Ag x 44.9% / $1,300/oz x 83.6%.
      7. Gold analyses are performed by fire assay/AA finish methods and
         silver analyses are performed by Induction Coupled
         Plasmaspectrometry (ICP). Silver ICP analyses are not known with
         the same precision and do not have the same quality control
         support as gold fire assay analyses.
      8. Rounding as required by reporting guidelines has been used, and
         totals may not sum.

Mining Operations and Metallurgy

A proposed mining production schedule was developed through the design
of an ultimate open pit within the mineral resource model. The mine
production schedule incorporates an elevated cut-off grade strategy
during the initial years of mining to raise the mill feed grade.
Material below the higher cut-off grade is stockpiled for processing at
the end of the pit life. Large-scale open pit mining will provide
process plant feed at a nominal rate of 60,000 tpd or 21.9 million
tonnes per year. Annual mine production will peak at 97 million tonnes
per year with a life-of-mine stripping ratio of 2.36:1.00. The
production schedule summarized below was developed through four mining
phases and allows for early delivery of higher grade material to the
process plant.

Mining operations will be carried out with an initial equipment fleet
comprising two 311 millimetre electric blast hole drills, two 56 cubic
metre electric cable shovels, one 18 cubic metre front-end loader and
sixteen 290 tonne trucks.  These will be supplemented with support
graders and track and rubber-tired dozers. A 10 metre bench height has
been selected for mining.

A metallurgical testwork program for the PEA was carried out on samples
of composited drill core selected to represent process plant feed in
the mine development plan. These samples were obtained from two primary
sources: a dedicated four-hole metallurgical drilling program and
composites of exploration drill core from 89 holes. Primary areas of
investigation for the whole ore leach program included primary grind
size and leach retention time. Estimated process plant feed grade,
recoveries and metal production are summarized below.

    |                           Blackwater PEA Production Schedule         |
    |            |      Indicated  |      Inferred   |         |  Average  |
    |            |      Resources  |      Resources  |         |  Annual   |
    |            |_________________|_________________|Recovery |Production |
    | Production |     |Head Grade |     |Head Grade |         |           |
    |   Years    |Mill |           |Mill |           |         |           |
    |            |Feed |           |Feed |           |         |           |
    |            |(Mt) |___________|(Mt) |___________|_________|___________|
    |            |     | Au  | Ag  |     | Au  | Ag  | Au | Ag | Au  | Ag  |
    |            |     |(g/t)|(g/t)|     |(g/t)|(g/t)|(%) |(%) |(koz)|(koz)|
    |1 through 5 |86.2 |1.00 | 5.4 |21.1 |0.75 | 4.7 |87.0|54.3| 569 |1,966|
    |1 through 15|236.5|0.90 | 4.4 |89.9 |0.66 | 8.5 |86.6|53.0| 507 |2,039|
    | 16 through |19.5 |0.49 | 3.3 |10.1 |0.54 | 3.1 |85.7|50.3| 296 |1,103|
    |     17     |     |     |     |     |     |     |    |    |     |     |
    |Life-of-mine|255.9|0.87 | 4.3 |100.0|0.65 | 7.9 |86.6|52.9| 489 |1,959|

Mineral Processing

The 60,000 tpd process plant will utilize conventional crushing,
grinding, leaching and carbon-in-pulp (“CIP”) to produce a gold-silver
doré. A gravity circuit consisting of centrifugal concentrators will
treat a portion of the primary cyclone underflow to recover coarse
metallic gold. The gravity concentrate will be directed to an intensive
cyanidation reactor for extraction of gold and silver. Ground material
will be directed to a leach feed thickener, then to a leaching and CIP
extraction circuit. Extracted gold and silver will be released from
carbon in the stripping columns and recovered by electrowinning before
being smelted into a gold-silver doré product. Stripped carbon will be
treated in a regeneration kiln.

Key process equipment will consist of:

        --  A 1,520 x 2,260 mm (60" x 89") gyratory crusher
        --  A SAG/ball mill/crusher grinding circuit:
      o Two 11.0 m diameter x 7.3 m (36' x 24') 16-MW SAG mills
      o Two 7.9 m diameter x 12.8 m (26' x 42') 16-MW Ball mills
      o Two 1,000 kW pebble crushers
        --  Whole ore leaching and CIP circuit:
      o 24 leach tanks of 18 m diameter
      o Six CIP tanks of 18 m diameter

Project Capital Costs

The Project is located approximately 112 kilometres southwest of
Vanderhoof and is close to existing infrastructure. Access to low cost
hydroelectric power is available and will require the construction of a
133 kilometre transmission line. The estimated development capital cost
is $1.8 billion inclusive of a 24%, or $346 million, contingency. The
capital estimate is based on the second quarter 2012 capital
environment, a period of very active project construction in British
Columbia, Alberta and globally. As the development capital was
estimated based on the current cost environment, a parity foreign
exchange rate was assumed and the capital estimate was held constant at
$1.8 billion in the economic analysis irrespective of which commodity
price and foreign exchange scenario was assumed upon the start of

    |         Breakdown of PEA Project Development Capital Costs    |
    |                             Description          |($ millions)|
    |Direct Costs                                      |            |
    |Mining and pre-production development             |      208   |
    |On site infrastructure                            |      181   |
    |Process                                           |      539   |
    |Tailing and water reclaim                         |       74   |
    |Power and water supply                            |       69   |
    |Access road                                       |       16   |
    |Total Direct Costs                                |     1,087  |
    |Owner's and Indirect Costs                        |            |
    |Owner's costs                                     |       54   |
    |Engineering, Procurement & Construction Management|      112   |
    |Other indirect costs                              |      215   |
    |Total Owner's and Indirect Costs                  |      381   |
    |Subtotal                                          |     1,468  |
    |Contingency (24%)                                 |      346   |
    |Total Project Development Costs                   |     1,814  |

The development capital cost is estimated to be $227 per recoverable
gold ounce over the current estimated life of the Project.

Sustaining capital of $537 million, reclamation and closure costs of $95
million and $72 million in equipment salvage value have also been
included in the financial analysis. Over the life-of-mine, estimated
sustaining capital at Blackwater is equivalent to $67 per recoverable
gold ounce. Through New Gold’s continued exploration efforts, the
company looks forward to the potential for further reductions in both
the development and sustaining capital cost per recoverable gold ounce.

Project Operating Costs

The combination of Blackwater’s location near infrastructure, low
stripping ratio, access to low cost hydroelectric power and silver
by-product revenue result in the Project’s estimated average total cash
costs((1)) being well below industry average. Over Blackwater’s life, the total
cash costs((1)) are estimated to be C$13.01 per tonne milled or $543 per ounce sold,
net of by-product sales. These life-of-mine average costs include the
negative impact of higher costs during the concluding years of the
Project’s currently estimated life where lower grade stockpiles are
scheduled to be processed.

    |                  Breakdown of Base Case PEA Operating Costs      |
    |           Description    |(C$ per tonne milled)|($ per gold ounce|
    |                          |                     |        produced)|
    |Mining                    |            6.21     |          259    |
    |Processing                |            7.59     |          317    |
    |General & Administrative  |            0.95     |           40    |
    |Royalty (0.6%)            |            0.18     |            8    |
    |Refining                  |            0.23     |            9    |
    |Silver by-product sales at|           (2.16)    |         (90)    |
    |$22.50 per ounce silver   |                     |                 |
    |Total cash costs(1) net of|            13.01    |          543    |
    |by-product sales          |                     |                 |

Every $1.00 per ounce change in the assumed silver price results in a
$32 million change in by-product sales over the currently estimated
life-of-mine, or an approximate $4 per ounce change in the life-of-mine
average total cash costs((1)).

Similar to the benefit realized in the gold production profile from the
processing of higher grade material in the early years of Blackwater’s
mine life, the Project’s total cash costs((1)) are also expected to be lower in the first five years, resulting in
stronger operating margins and cash flow generation.

    |Base Case PEA Total Cash Cost(1) Schedule      |
    |  Production Years |($ per gold ounce produced)|
    | Years 1 through 5 |                  467      |
    |Years 1 through 15 |                  536      |
    |Years 16 through 17|                  678      |
    |     Life-of-mine  |                  543      |

Economic Analysis and Sensitivities

The PEA indicates that Blackwater has the potential to generate solid
economic returns even when combining project development capital cost
estimates generated in the second quarter 2012 capital environment and
a long-term gold price assumption of $1,275 per ounce (approximately
$500 per ounce below today’s spot gold price). The summary below,
showing various commodity price and foreign exchange scenarios, holds
the following assumptions constant: development capital of $1.8
billion, a diesel cost of $0.98 per litre, based on an average oil
price of $90 per barrel, and an electricity rate of C$0.044 per
kilowatt hour. The NPV calculations shown below are calculated to the
beginning of the construction period in 2015.

    |                                  Summary of Project Economics(2)            |
    | Gold  |Silver|US$/CDN$|      5% NPV     |       IRR (%)   |  Payback Period |
    | Price |Price |foreign |   ($ billions)  |                 |      (Years)    |
    |($ per |($ per|exchange|_________________|_________________|_________________|
    |ounce) |ounce)|        |Pre-tax|After-tax|Pre-tax|After-tax|Pre-tax|After-tax|
    | 1,275 |22.50 |   0.94 |   1.7 |    1.1  |  16.4 |   14.0  |   4.7 |    4.8  |
    | 1,600 |30.00 |   0.97 |   3.3 |    2.2  |  25.9 |   22.0  |   3.0 |    3.1  |
    | Spot  |34.50 |   1.00 |   4.2 |    2.8  |  30.4 |   25.8  |   2.6 |    2.7  |
    |(1,775)|      |        |       |         |       |         |       |         |
    | 1,800 |35.00 |   1.00 |   4.3 |    2.9  |  31.1 |   26.4  |   2.5 |    2.6  |

As shown above, the Project has the potential to provide investors with
significant leverage to movements in the gold price. Beyond changes in
the gold price, Blackwater’s NPV is most sensitive to foreign exchange
rate movements while being less sensitive to changes in capital and
operating costs.

Environment, Permitting and Corporate Social Responsibility

The Project design includes a robust closure plan, with simplified water
management due to the compact project layout and integrated waste
management strategy. All Project components will be decommissioned and
reclaimed, according to best industry practices and provincial and
federal regulations. New Gold will operate the Project in accordance
with the International Cyanide Management Code, as it does for all its
other gold mines.

The company plans to submit the Project Description for Blackwater in
the coming weeks, which will initiate the federal and provincial
environmental assessment process. Draft Terms of Reference for the
provincial Environmental Assessment Certificate Application and federal
Environmental Impact Statement approvals are expected to be filed in
early 2013, for approval by the British Columbia Environmental
Assessment Office and Canadian Environmental Assessment Agency. The
company anticipates receiving the required Environmental Assessment
approval in the second half of 2014, after which additional permits,
licenses, authorizations and certificates will be obtained to proceed
to construction of the Project. These approvals are expected in the
first half of 2015.

Since acquiring the Project in mid-2011, New Gold has proactively
engaged in discussions with First Nations, government and stakeholders
in the area of the Project. Consultation has also commenced with
federal and provincial governments regarding permitting and with other
land users, such as forestry companies, regarding land use and road
access. The company opened an office and sample preparation facility in
Vanderhoof in June, further establishing New Gold’s commitment to the
local community. It is anticipated that on the start of production,
approximately 500 permanent jobs will be created at Blackwater. The
construction workforce is expected to be roughly 1,000 workers on
average, peaking at 1,500. New Gold is committed to maximizing local
employment and contracting opportunities in an area deeply affected by
the Mountain Pine Beetle epidemic. Similar to the practices put in
place at its New Afton mine, the company plans to work collaboratively
with community partners, making use of existing training programs to
prepare local workers and establish new programs for specific training
where necessary.

Project Timeline and Optimization Efforts

The completion of this positive PEA is an important milestone in the
continued development of Blackwater. As the Project continues to
advance, New Gold anticipates the following key milestones:

        --  Fourth quarter 2013 - Completion of Feasibility Study
        --  First quarter 2014 - Commence detailed engineering and
            procurement of long lead items
        --  Second half 2014 - Receipt of Provincial and Federal
            Environmental Assessment approvals
        --  First half 2015 - Receipt of construction-related approvals
        --  Early 2015 - Commence construction activities
        --  2017 - Begin production

As part of the company’s continued efforts to improve Blackwater’s
economics beyond those highlighted here, some of the enhancement
opportunities identified include:

        --  Resource potential - Post PEA resource drilling has already
            shown the potential for expansion of mineralization to the
            north and at depth. The company continues to actively drill the
            deposit to define the limits, and it is intended that an
            updated resource statement will be issued during the
            Feasibility Study. An increased mineral resource base has the
            potential to add project value by extending mine life and
            increasing mill throughput.
        --  Pit slopes - The current pit wall slopes are based on limited
            geotechnical data. If the pit slopes can be steepened, then
            additional mineralization may come within the boundary of the
            economic pit shell and possibly increase the amount of
            contained metal that could be mined. In addition, the stripping
            ratio could potentially decrease because of the lower volumes
            of waste that would need to be removed on the margins of the
            pit. Further geotechnical drilling and analyses are planned to
            confirm the possibility of steepening the pit slopes as part of
            the Feasibility Study.
        --  Mining - Mining costs may be reduced by mechanical waste
            conveyance and by optimizing mine plan, stockpile locations and
            mining equipment selection.
        --  Process Flowsheet - Reducing process costs and increasing gold
            and silver recoveries may be achieved by optimizing the process
            flowsheet, grind sizes, cyanide consumption and leach tank

These opportunities will be investigated during the Feasibility Study
test program.

Continued Exploration Program

Driven by the continued exploration success at Blackwater, during the
2012 summer, New Gold increased its 2012 exploration drilling target to
over 250,000 metres in the Blackwater area versus the previous target
of 210,000 metres. As the PEA mineral resource update incorporates 151
holes totaling 57,064 metres of the total 2012 target, the company
intends to provide further exploration updates on Blackwater through
the remainder of the year. Since the mid-May PEA mineral resource
cut-off, the company has drilled an additional 100,363 metres in 377
holes. Currently there are 13 drills active at the Blackwater site.

        --  10 drills focused on further resource delineation and infilling
            drilling at the primary Blackwater deposit
        --  Two drills focused on condemnation drilling of proposed
            infrastructure sites
        --  One drill completing geotechnical drilling

In addition, at the Capoose gold-silver deposit, where the company has
one drill active, New Gold has completed drilling of 10,894 metres in
22 holes. Assays continue to be processed with highlights of those
received to date including:

        --  Hole 169: 80 metres of 0.78 gram per tonne gold and 4.4 gram
            per tonne silver plus 25 metres of 0.24 gram per tonne gold and
            21.5 gram per tonne silver
        --  Hole 170: 78 metres of 0.77 gram per tonne gold and 7.2 gram
            per tonne silver plus 74 metres of 0.15 gram per tonne gold and
            24.4 gram per tonne silver

New Gold will provide a full list of assays received from Capoose
drilling on its website within 45 days.

Webcast Presentation

A webcast presentation to discuss the results of the PEA will be
provided on September 20th at 7:30 a.m. Eastern Time. Participants may
listen to the webcast by registering here or may access the webcast from www.newgold.com. You may also listen to the conference by calling 647-427-7450 or
toll-free 1-888-231-8191 in North America. To listen to a recorded
playback of the call after the event, please call 1-416-849-0833 or
toll-free 1-855-859-2056 in North America – Passcode 32355104.  An
archived webcast will also be available at www.newgold.com following the event.

About New Gold Inc.

New Gold is an intermediate gold mining company. The company has a
portfolio of four producing assets and two significant development
projects. New Gold’s New Afton project met its targeted June 2012
production start and began commercial production ahead of schedule in
July 2012. Together with the Mesquite Mine in the United States, the
Cerro San Pedro Mine in Mexico and Peak Gold Mines in Australia, the
company is forecasting between 405,000 and 445,000 ounces of gold
production in 2012. In addition, New Gold owns 30% of the world-class
El Morro project located in Chile and 100% of the exciting Blackwater
project in Canada. For further information on the company, please visit

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 use of forward-looking terminology such as “plans”,
“expects”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates”, “projects”, “potential”,
“believes” or variations of such words and phrases or statements that
certain actions, events or results “may”, “could”, “would”, “should”,
“might” or “will be taken”, “occur” or “be achieved” or the negative
connotation. 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 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
international, 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 the Cerro San Pedro mine has a history
of ongoing legal challenges related to our EIS and Chile where the
courts have temporarily suspended the approval of the environmental
permit for the El Morro project; the lack of certainty with respect to
foreign legal systems, which may not be immune from the influence of
political pressure, corruption or other factors that are inconsistent
with the rule of law; the uncertainties inherent to current and future
legal challenges the company is or may become a party to; 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
disclosure documents filed on and 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.

Cautionary Note to U.S. Readers Concerning Estimates of Measured,
Indicated and Inferred Mineral Resources

Information concerning the properties and operations discussed in this
news release 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.

Technical Information

Certain of the scientific and technical information in this news release
is derived from the NI 43-101 compliant technical report entitled
“Technical Report, Blackwater Gold Project, Omineca Mining Division,
British Columbia, Canada” dated March 23, 2012, which is filed on
SEDAR. Another NI 43-101 compliant technical report supporting the PEA
and updated mineral resource estimate (“PEA Report”) will be filed on
SEDAR within 45 days. The following qualified persons, as that term is
defined in NI 43-101, have prepared or supervised the preparation of
technical information relating to the PEA Report:

        --  Mark Petersen, P Geo (New Gold Inc.)
        --  Ronald G. Simpson, P Geo (GeoSim Services Inc.)
        --  Herbert E. Welhener, MMSA - QPM (Independent Mining Consultants
        --  Bruno Borntraeger, P. Eng (Knight Piesold Ltd.)
        --  Ignacy (Tony) Lipiec, P. Eng (AMEC)
        --  Ramon Mendoza Reyes, P. Eng (AMEC)

Mark Petersen, P Geo, is also responsible for approving the technical
information in this news release that is not related to the PEA
Report.  Other than Mark Petersen, who is an employee of New Gold, each
of the qualified persons listed above are independent of New Gold.


“Total cash costs” 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 costs 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 costs on a sales basis. Total cash costs 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 costs are 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-IFRS
measure. Total cash costs presented do not have a standardized meaning
prescribed by IFRS 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 IFRS and is not necessarily indicative of operating
costs presented under IFRS.


This note regarding the preliminary economic assessment (PEA) is in
addition to cautionary language already included within the news
release as required under NI 43-101. The PEA is preliminary in nature
and includes Inferred mineral resources that are considered too
speculative geologically to have the economic considerations applied to
them that would enable them to be categorized as mineral reserves, and
there is no certainty that the PEA based on these mineral resources
will be realized. Mineral resources that are not mineral reserves do
not have demonstrated economic viability.



SOURCE New Gold Inc.

Source: PR Newswire