New Gold Reports 2023 Third Quarter Results

Press Release

TORONTO, Oct. 25, 2023- New Gold Inc. (“New Gold” or the “Company”) (TSX: NGD) (NYSE American: NGD) reports third quarter results for the Company as of September 30, 2023. Production totaled 111,204 gold equivalent¹ (“gold eq.”) ounces at all-in sustaining costs² of $1,477 per gold eq. ounce. Due to the strong operational performance over the first nine months of the year, consolidated 2023 production is tracking to the top end of guidance and all-in sustaining costs are tracking to the low end of the guidance range. Solid production and low costs in the third quarter resulted in strong cash flow from operations of $100 million and free cash flow² of $22 million, highlighting the cash generation profile as growth projects are completed in the coming years, which is expected to lead to production growth and tapering capital costs.

Strong Operational Performance Positions New Gold to Achieve Top End of 2023 Production Guidance and Low End of Cost Guidance

• Third quarter consolidated gold eq.¹ production of 111,204 ounces (82,986 ounces of gold, 13.2 million pounds of copper and 145,452 ounces of silver), the highest quarterly production since 2021 and a 22% increase over the prior-year period
• All-in sustaining costs² of $1,477 per gold eq. ounce, including total cash costs² of $1,044 per gold eq. ounce
• Standout quarter from New Afton, exceeding planned copper and gold production, mostly as a result of higher tonnes processed. B3 extraction rates continue to exceed plan. Production is tracking to the top end of 2023 guidance
• Rainy River continues to deliver stable production quarter-over-quarter. Both the open pit and underground mines are well positioned to deliver fourth quarter mill feed and the processing plant is running well. Production is tracking to the top end of 2023 guidance
• The Company is currently tracking to the top end of consolidated production guidance for gold, copper, and gold eq.¹ production and all-in sustaining costs² are tracking to the low end of the guidance range

Positive Free Cash Flow Achieved in the Quarter, Underscoring the Near-term Cash Generation Profile as Both Operations Execute on Growth Projects

• Cash and cash equivalents of $179 million as at September 30, 2023, an increase of $5 million from the second quarter driven by free cash flow² generated at both Rainy River and New Afton
• Cash generated from operations of $100 million, or $0.15 per share, in the third quarter and cash generated from operations, before changes in non-cash operating working capital², of $88 million, or $0.13 per share
• Free cash flow² of $22 million despite the Company currently being in an intensive capital spending period, including the New Afton C-Zone project and establishment of the Rainy River underground mine
• Net loss of $3 million, or $0.00 per share and adjusted net earnings² of $23 million, or $0.03 per share
• Capital spending is expected to taper off significantly over the next few years upon completion of growth projects and a significant reduction in open pit waste stripping at Rainy River after 2024. Together with increasing production profiles at both operations and decreasing unit operating costs per tonne at New Afton with the return to higher throughput rates, free cash flow is expected to increase significantly
• Subsequent to quarter end, the Company announced the achievement of two key milestones with the completion of the first draw bell at New Afton’s C-Zone and the commissioning of the final two of 29 dewatering wells at the New Afton Tailings Storage Facility (NATSF), as planned (refer to the Company’s October 2, 2023 news release for further information). Commercial production from C-Zone is on track for the second half of 2024. At Rainy River, development of the connection ramp from Intrepid to underground Main Zone is on track for first ore production from underground Main Zone in the second half of 2024

Strategic Pipeline to Extend New Afton Mine Life Beyond 2030 with Minimal Capital Investment

• Subsequent to quarter end, the Company provided an update on promising opportunities to extend the mine life at New Afton beyond 2030, and reported encouraging drill results and future exploration plans at the New Afton Mine (refer to the Company’s October 10, 2023 news release for further information)
• As a priority, New Gold is looking to convert a portion of the existing underground mineral resource base to mineral reserves, including C-Zone Extension, East Extension, and D-Zone. Additionally, initial drilling results from K-Zone and AI-Southeast are encouraging
• The Company will continue to employ a disciplined approach to capital allocation to sustain New Afton’s significant cash flow profile throughout the C-Zone period, from the second half of 2024 to 2030, by leveraging existing underground infrastructure and New Afton’s mill and tailings facilities

“The third quarter was an impressive one for New Gold,” stated Patrick Godin, President & CEO. “We delivered a 22% increase in gold equivalent production over the prior-year period with a meaningful decrease in all-in sustaining costs, leading to positive free cash flow during the quarter for the Company while continuing to invest in our growth projects. We have performed well through 2023 with a continued focus on operational discipline and safety, and I am pleased that we are tracking to the top end of our production guidance, and the low end of our all-in sustaining cost guidance.”

“We are entering a growth period and the third quarter saw our Company make big strides towards derisking and securing the future production at our operations. I want to reemphasize the two key milestones achieved at New Afton with the completion of the first draw bell at C-Zone and the final commissioning of all 29 dewatering wells at the NATSF. This is a pivotal moment for the New Afton mine with production growth and declining costs expected in the near term, and all major capital expenditures for the tailings stabilization completed. Rainy River continued to advance the connection ramp towards the underground Main Zone from Intrepid, allowing us to continue to take advantage of a number of efficiencies both underground and in the open pit,” added Mr. Godin.

2023 Operational Outlook Update

Through the first nine months of the year, both operations delivered solid production and cost performance. The Company is currently tracking to the top end of consolidated production guidance for gold, copper, and gold eq.¹ production and all-in sustaining costs are tracking to the lower end of the guidance range.

Rainy River is tracking towards the top end of the gold eq.¹ production range. Sustaining capital is expected to be at the low end of the guidance range primarily due to lower waste stripping year-to-date, resulting in lower capitalized mining costs, with those costs remaining in operating expenses. As a result of the lower capitalization of mining costs, operating expenses per gold eq. ounce are now tracking above the top end of the guidance range. All-in sustaining costs are tracking to the midpoint of the guidance range. Growth capital is expected to be within its guidance range.

At New Afton, copper, gold, and gold eq.¹ production are tracking towards the top end of their respective production guidance ranges, with operating expenses per gold eq. ounce and all-in sustaining costs now tracking towards the low end of their respective cost guidance ranges. Sustaining and growth capital are both expected to be within their respective guidance ranges.

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