blackwater project update investor/analyst breakfast · blackwater pea investor/analyst breakfast |...

Blackwater Project Update

Investor/Analyst Breakfast September 20, 2012

2 Blackwater PEA Investor/Analyst Breakfast | September 2012 2

Cautionary statement

All monetary amounts in U.S. dollars unless otherwise stated

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information contained in this presentation, including any information relating to New Gold's future financial or operating performance may be deemed "forward looking". All statements

in this presentation, 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 presentation 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 statement (cont’d)

CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES

Information concerning the properties and operations discussed in this presentation 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 presentation 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 presentation 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 presentation 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, C.P.G. (New Gold Inc.)

• Ronald G. Simpson, P Geo (GeoSim Services Inc.)

• Herbert E. Welhener, MMSA – QPM (Independent Mining Consultants Inc.)

• Bruno Borntraeger, P. Eng (Knight Piesold Ltd.)

• Ignacy (Tony) Lipiec, P. Eng (AMEC)

• Ramon Mendoza Reyes, P. Eng (AMEC)

Mark Petersen, C.P.G., is also responsible for approving the technical information in this presentation 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.


Cautionary statement (cont’d)

(1) TOTAL CASH COSTS

“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 is reduced by any by-product revenue and is then divided by ounces sold to arrive at the total by-product cash costs 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 does 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.

(2) PEA – ADDITIONAL CAUTIONARY NOTE

This note regarding the preliminary economic assessment (PEA) is in addition to cautionary language already included within the presentation 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.


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.

Preliminary Economic Assessment Cautionary Language


Discussion topics

Introduction Randall Oliphant

PEA Review Paul Hosford

Next Steps Bob Gallagher

Continued Exploration Mark Petersen

Conclusion Randall Oliphant


Introduction


BLACKWATER ENHANCES NEW GOLD’S PORTFOLIO IN MULTIPLE WAYS

Blackwater overview

Asset of world-class scale

Excellent jurisdiction

Excitement of new discoveries/continued exploration upside

Potential to increase value – from exploration through production

Robust project economics


Experienced project team

Project Director

Peter Marshall

Feasibility Study Director

Paul Hosford

VP Exploration

Mark Petersen

Environmental Director

Tim Bekhuys

• 28 years in minerals exploration in roles ranging from corporate management, project

evaluations and acquisitions, generative exploration and project management

• Over 30 years in the mining industry primarily with Placer Dome and Terrane Metals

• Civil engineer with experience in feasibility management and project development

• 30 years mining industry experience in operations and engineering, primarily with Barrick,

Hatch and Terrane Metals

• Metallurgical engineer with experience in project management of feasibility studies and EPCM

• Led successful permitting and environmental construction aspects of Mt. Milligan Copper-

Gold Mine in British Columbia

• Experienced in community and First Nations engagement

Chief Executive Officer

Robert Gallagher

• Over 32 years in the mining industry in leadership roles with Placer Dome, Newmont Mining

and New Gold

VP Operations

Ernie Mast

• Over 25 years in the mining industry in leadership roles with Inmet, Xstrata, Noranda and

Falconbridge

Chief Financial Officer

Brian Penny

• Over 23 years of experience in mine finance and accounting in leadership roles with

Kinross, Western Goldfields and Silver Bear Resources


Preliminary Economic Assessment (“PEA”) in review(1)

Gold Price (US$/oz) $1,275 $1,600 $1,775 $1,800

Silver Price (US$/oz) $22.50 $30.00 $34.50 $35.00

US$/CDN$ Foreign Exchange 0.94 0.97 1.00 1.00

5% NPV ($ billions) (2015)

Pre-tax NPV 1.7 3.3 4.2 4.3

After-tax NPV 1.1 2.2 2.8 2.9

IRR (%)

Pre-tax IRR 16.4 25.9 30.4 31.1

After-tax IRR 14.0 22.0 25.8 26.4

Payback period (years)

Pre-tax payback period 4.7 3.0 2.6 2.5

After-tax payback Period 4.8 3.1 2.7 2.6

Highlights

• Initial gold production targeted for 2017

• 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

• 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

– $1.00 per ounce change in silver price assumption equates to ~$4 per ounce change in total cash costs(1)

Note: 1. Refer to Cautionary Statement and note on Total cash costs and PEA additional cautionary note.

Blackwater expected to generate solid economic returns in current capital cost environment, even when

using a long-term gold price assumption of US$1,275 per ounce

Base Case Spot Case


$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

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100

200

300

400

500

600

700

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

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(th

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Gold production Base Case cash costs

Production and total cash costs(1)

Average First 5 Years

569,000 ounces gold at

$467 per ounce(1)


Average First 15 Years

507,000 ounces gold at

$536 per ounce(1)


• Blackwater development capital

cost of $1.8 billion inclusive of 24%,

or $346 million, contingency

– $227 per recoverable ounce

• Costed in mid-2012 capital

environment assuming parity

foreign exchange rate

• Capital intensity may be abating

• Large diversified companies,

accounting for ~55% of global

capital, delaying certain projects

• Oil sands project expansions also

being delayed

Perspectives on capital costs

After-tax IRR (%)(1)(2)

$1.8

$1.7

$1.6

$1.5

$1,275 $1,600 $1,775

18.1% 27.5% 31.8%

16.6% 25.4% 29.6%

15.2% 23.6% 27.6%

14.0% 22.0% 25.8%

Gold price ($/oz)

Dev

elo

pm

en

t cap

ital ($

billio

ns)

New Gold could benefit from announced delays in capital projects of major companies

$1,800

32.5%

30.2%

28.2%

26.4%


2. IRR calculated to beginning of construction period in 2015.

• Each $100 million change in development capital equates

to a ~$100 million change in NPV


Total

($mm)$ Per Ounce(2)

Total Acquisition costs to date $602 $75

Development capital $1,814 $227

Life-of-mine sustaining capital $537 $67

Life-of-mine average cash costs ($/oz)(3) $543

Total acquisition cost ($/oz) $912

Spot gold price ($/oz) $1,775

(Discount)/Premium to spot gold (49%)

Break-even gold price $912

Total acquisition cost (“TAC”)

• Acquisition costs of $602(1) million

based on:

– Richfield - $470 million

– Silver Quest - $114 million

– Geo Minerals - $18 million

• Total acquisition cost of $912 per

ounce below recent industry

comparable transactions

– Further potential to decrease

break-even gold price with

continued resource expansion

Total Acquisition Cost per Ounce

Notes: 1. Per 2011 Annual financial statements.

2. Per ounce calculations based on 6.2 million ounces from the Indicated category and 1.8 million ounces from the Inferred category.

3. Refer to Cautionary Statement and note on Total cash costs and PEA additional cautionary note.


PEA Review


Blackwater Project – South Central British Columbia

British Columbia, Canada

New Afton

Blackwater



Power Line

Power Line

Railway


Blackwater – South Central British Columbia

~160km to

Prince George

~112km to

Vanderhoof

Blackwater

Project

50km

80km

Capoose

Resource

Current

resource grid



Summer 2012


• Start of production in 2017

• Conventional truck and shovel open pit mine with 60,000 tonnes per day processing plant

• Life-of-mine strip ratio of 2.36 to 1

• Low grade stockpiling strategy

• Simple, conventional flowsheet using whole ore leach process

• Life-of-mine gold and silver recoveries of 87% and 53%, respectively

• Conventional waste rock and Tailings Storage Facility

• Power supply from the hydroelectric power grid, via 133 kilometre transmission line

• Minimal off-site infrastructure required

– Good existing access road; water supply within 15 kilometres

• Low environmental risk and facility designed for closure

Blackwater Project overview


Site overview


PEA resource summary

• The deposit contains an Indicated mineral resource of 267 Mt at 0.88 g/t Au and 4.3 g/t Ag and an Inferred

mineral resource of 121 Mt at 0.69 g/t Au and 7.3 g/t Ag at a base case lower cut-off of 0.30 gram per tonne

gold equivalent

• Mineral estimate is CIM 2010 compliant and prepared under Canadian National Instrument 43-101

– Based upon geologic block model that incorporated 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

• Mineral resource includes drill data received through May 14, 2012

Notes:

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% Au recovery, 44.9% Ag 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.

AuEq

Cut-off

(g/t)

Tonnes

(Mt)

Au

(g/t)

Ag

(g/t)

Au

(Moz)

Ag

(Moz)

AuEq

Cut-off

(g/t)

Tonnes

(Mt)

Au

(g/t)

Ag

(g/t)

Au

(Moz)

Ag

(Moz)

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

Blackwater Project PEA Mineral Resource Estimate

Indicated Mineral Resource Inferred Mineral Resource


• Mineral resources have been constrained using a Lerchs-Grossman optimized pit using ordinary kriging

– Pit slope – 40 degrees

• Mineral resource is grade shell contained estimate

– Resource samples were capped at 40 g/t gold and 150 g/t silver

• Mine production schedule incorporates an elevated cut-off grade strategy during the first five years to raise

the mill feed grade

• Block model was created in Gemcom-Surpac Vision software using a block size with dimensions of 10m x

10m x 10m

PEA base case assumptions

Gold price (US$/oz) $1,275

Silver price (US$/oz) $22.50

Foreign exchange rate CAD$1.00 = US$0.94

Diesel price ($/L) $0.98

Average electricity rate (kWh) C$0.044

Capital contingency 24% or $346 million

NPV calculation Calculated to 2015 (construction start)

• PEA commodity prices represent a

significant discount to current spot prices:

– Gold: ~$500 per ounce (~28%)

below current gold price

– Silver: ~$12 per ounce (~35%)

below current silver price


Project Development Capital Costs

Description Cost ($ million)

Direct Costs

Mining & Pre-production Development $208

On Site Infrastructure $181

Process $539

Tailing and Water Reclaim $74

Infrastructure (Power, Water, Road) $85

Total Direct Costs $1,087

Owner's and Indirect Costs

Owner's Costs $54

EPCM $112

Other Indirects $215

Total Owner's and Indirect Costs $381

Subtotal $1,468

Contingency (24%) $346

Total Project $1,814

• Project is located 112 kilometres southwest

from Vanderhoof and has access to low cost

hydroelectric power

• Development capital estimate of $1.8 billion is

inclusive of a 24% or $346 million

contingency

• Development capital estimated based on the

current cost environment

– A parity foreign exchange rate was

assumed and the capital estimate was

held constant in the economic analysis

• Sustaining capital of $537 million, reclamation

and closure costs of $95 million and $72 million

in equipment salvage value

Blackwater PEA costs - Capital

Total development and sustaining

capital estimated at $294 per

recoverable gold ounce


Project Operating Costs

Area Unit Cost (C$/t milled) $ per gold ounce produced

Mining $6.21 $259

Processing $7.59 $317

General and Administrative $0.95 $40

Royalty (0.6%) $0.18 $8

Refining $0.23 $9

Silver by-product sales at $22.50 per ounce silver ($2.16) ($90)

Total cash costs(1) net of by-product sales $13.01 $543

44%

24%

17%

8%6%

1% Reagents

GrindingMedia/linersElectricity

Labour

Maint materials

Water Supply

59%

11%

9%

6%

4%

4% 4%2%Hauling

Auxiliary

Blasting

G&A

Drilling

Loading

General Maint.

General Mine

Blackwater PEA costs - Operating

Processing Costs

Mining Costs

Blackwater’s location near infrastructure, low stripping ratio, access to low cost power and silver

by-product revenue expected to result in the Project having well below industry average cash costs


Total Cash Costs(1) Schedule

Production Years $ per gold ounce produced

Years 1 through 5 $467



Life-of-mine $543


Production and cash costs profile

Years 1 through 5

Gold production – 569koz

Total cash costs - $467/oz

Years 1 through 15



Years 16 through 17



Life-of-mine



(1)


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Gold production Base Case cash costs


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$900

2017 2018 2019 2020 2021

Op

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ash

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Base Case Spot Case

PEA highlights(1)

Operating cash flow ($ millions)

• Average spot case

cash flow during first

five years of ~$655

million

• Cumulative spot case

cash flow during first

five years of ~$3.3

billion


PEA Results Base Case Spot Case

Gold Price (US$/oz) $1,275 $1,775

Silver Price (US$/oz) $22.50 $34.50

US$/CDN$ Foreign Exchange 0.94 1.00

After-tax NPV(5%) ($ billions) $1.1 $2.8

After-tax IRR 14.0% 25.8%

After-tax payback period (years) 4.8 2.7


Areas of optimization

Potential for expansion of the resource to the north and to depth

Further geotechnical drilling to assess the possibility of steepening pit slopes

Potential to reduce mining costs through mine plan optimization

Optimizing process flowsheet


Next Steps


Environment and permitting

Preparations have started for environmental

assessment and permitting approval process

Agreements are in place with key First Nations

Environmental assessment approval anticipated for

second half of 2014

The site has no significant environmental constraints

Building on strong community and First Nations

relations as demonstrated at New Afton


Development activity

First Nations & Public Consultation

Preliminary Economic Assessment

Base Line Environmental Studies

Feasibility Study

Engineering Procurement

Production Target

Drilling

Project Description/Terms of Reference

Environmental Assessment Reports

Provincial Approval

Federal Approval

Construction

H1 H2 H1 H2 H1 H2H1 H2 H1 H2 H1 H2

2012 2013 2014 2015 2016 2017

• Remains unchanged from mid-2011

Project timeline

Note: 1. Indicative timeline is dependent on continued exploration success, permit approvals and the determination that the deposit is economically viable. There is no assurance this timeline will be achieved nor that

the deposit will ever reach the production stage.

Reflects critical path in timeline


Continued exploration


July 2012 – Updated mineral resource

Inferred Resource

121Mt at 0.69 g/t for

2.7 Moz

Indicated Resource

267Mt at 0.88 g/t for

7.5 Moz

• Based on 449 core holes totaling 147,282 meters drilled

from 2009 through May 14, 2012

• ~30% step-out holes and ~70% infill holes

• Majority of holes drilled to 400 meter depth

– Mineralization open at depth in some areas

– System also remains open to north

• Drilled an additional 100,363 metres in 377 holes since

mid-May cut-off

Notes:

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% Au recovery, 44.9% Ag 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.

AuEq

Cut-off

(g/t)

Tonnes

(Mt)

Au

(g/t)

Ag

(g/t)

Au

(Moz)

Ag

(Moz)

AuEq

Cut-off

(g/t)

Tonnes

(Mt)

Au

(g/t)

Ag

(g/t)

Au

(Moz)

Ag

(Moz)

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

Blackwater Project PEA Mineral Resource Estimate

Indicated Mineral Resource Inferred Mineral Resource


Sxn 5893,500N

Sxn 375,000E

Blackwater PEA mineral resource

NW Silver Zone

SW

Breccia

Pipe


Blackwater exploration upside opportunities

Section 5893,500N Section 375,000E Gold

NW ‘Silver Zone’

SW Breccia Pipe


Blackwater exploration upside opportunities (cont’d)

Section 5893,500N Section 375,000E Silver

SW Breccia Pipe

NW ‘Silver Zone’


Blackwater feasibility study drilling program

SW

Breccia

Pipe

NW Silver Zone


Blackwater land position

Project Area – June to December 2011 Project Area – September 2012

Auro

Property

Capoose

property Blackwater

property

Blackwater

Capoose


2012 exploration program

Delineate Blackwater resource to M&I level

BW area – Exploration / Condemnation drilling

Capoose area – Test potential to expand resource

Reconnaissance mapping and sampling – Planned on all

properties

Blackwater

Capoose

Auro

Property

Capoose

property

Blackwater

property

MYAB

Area


2012 exploration/condemnation program

2012 Progress

• 58 holes totaling 23,639

metres YTD

• Program ~50% complete

• Favorable volcanics, alteration

and mineralization being

intercepted northwest of

Blackwater

• Drilling northeast of

Blackwater pending

2013 Program

• Complete remaining ~15,000

meters by end Q1’13

• Follow up on areas of interest

• Freeze and/or modify project

siting and infrastructure

footprint by end Q3’13


Capoose exploration

Explored potential to expand resource laterally and at depth

Completed 22 holes totaling 10,894 metres

Significant mineralization intercepted south and below known resource

Known resource sits within larger footprint of favorable volcanic stratigraphy,

alteration and mineralization extending 1.5-2 kilometre north and south

1,800m

1,600m

1,400m

0.78 g/t Au, 4.4 g/t Ag

80m

0.24 g/t Au, 21.5 g/t Ag

25 m

Assays pending

1,800m

1,600m

1,400m

0.77 g/t Au, 7.2 g/t Ag

78m

0.15 g/t Au, 24.4 g/t Ag

74m

Assays pending

Assays pending

Sxn 5905,700N

Sxn 5905,650N

Capoose

Resource

GradeShell


2012 property wide reconnaissance

>1000 ppb Au

500-1000 ppb Au

250-500 ppb Au

50-250 ppb Au

Blackwater

Capoose

Gold-in-till sampling over ~750 km2 area

Soil geochem sampling over ~237 line-km

Geologic reconnaissance mapping over 125 km2


Conclusion


What Blackwater means to New Gold

World class asset in South Central BC Robust Project

Experienced Management Team New Afton

Blackwater

8 million recoverable gold ounces today

Well below industry average cash costs

Solid economics even with conservative

gold price assumptions

• Very few new discoveries of Blackwater’s

scale in North America/Mexico in last five

years

• Blackwater a new discovery in an

underexplored district with excellent

infrastructure

• New Gold teams who successfully delivered

Cerro San Pedro, Mesquite and New Afton

further supplemented by former Mount

Milligan permitting team

Continued Exploration Upside

• Blackwater remains open, plus Capoose

and regional targets


Accretive resource growth

$602

million

Acquisition Cost

7.5Moz

GOLD

&

36.9Moz

Silver

Blackwater accounts for 36% and 29% of New Gold’s consolidated gold and silver

Measured & Indicated resources, respectively

~11% of current

market capitalization


$0

$50

$100

$150

$200

$250

-

100

200

300

400

500

600

700

800

2017 2018 2019 2020 2021

Blackwater and New Afton Combined cash costs

Building presence in British Columbia

British Columbia Measured & Indicated Resources

Gold

9.3Moz

Silver

42.4Moz

Copper

1.6Blbs

British Columbia Gold Production and Total Cash Costs(1)(2)

Note: 1. Blackwater production and cash costs based on PEA and New Afton production and cash costs based on latest Technical Report and New Gold assumptions.

2. Refer to Cautionary Statement and note on Total cash costs and PEA additional cautionary note.

Go

ld p

rod

uc

tio

n (

tho

us

an

d o

un

ce

s)

Co

mb

ine

d c

as

h c

os

ts ($

/oz)


Solid production profile

• El Morro and Blackwater expected to more than double New Gold’s gold production by 2017

at low cost

387405 - 445

~450 - 500

200

400

600

800

1,000

2011A 2012E 2013E 2017E

Go

ld p

rod

ucti

on

(th

ou

san

d o

un

ces)


-

$300

$600

$900

$1,200

2011A 2013E 2015E 2017E

Cash flow generation potential

Note: 1. 2013E, 2015E and 2017E at spot commodity prices of $1,775/oz gold, $34.50/oz silver, $3.75/lb copper.

Operating Cash Flow ($ millions)


2012 – A year of catalysts

Blackwater resource update

New Afton production start

El Morro litigation decision

Further Blackwater PEA resource update

New Afton commercial production

Blackwater PEA

New Afton mill achieving design capacity

El Morro engineering/development planning

Blackwater/New Afton exploration


The New Gold investment thesis

EXPERIENCED BOARD AND MANAGEMENT

FULLY FUNDED COMPANY WITH STRONG BALANCE SHEET

DIVERSIFIED ASSET BASE IN MINING FRIENDLY JURISDICTIONS

ORGANIC GROWTH OPPORTUNITIES/METAL OPTIONALITY

PRODUCTION GROWTH/MARGIN EXPANSION

INCREASING UNDERLYING ASSET VALUE

MULTIPLE CATALYSTS

COMPELLING INVESTMENT PROPOSITION

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