building values1.q4cdn.com/.../2015/annual/new-gold-annual-report-2015.pdf2015 new gold annual...

2015 NEW GOLD ANNUAL REPORT 3

New

Gold 2015 A

nnual Report

BUILDING VALUE2015 ANNUAL REPORT

2015 HIGHLIGHTS

New Gold Inc. is an intermediate gold producer with operating mines in Canada, the United States, Australia and Mexico, development projects in Canada as well as a 4% gold stream on the El Morro project in Chile. For the full year ended December 31, 2015, the New Afton Mine in Canada, the Mesquite Mine in the United States, the Peak Mines in Australia and the Cerro San Pedro Mine in Mexico combined to produce 435,718 gold ounces, 100.0 million pounds of copper and 1.9 million silver ounces.

GOLD PRODUCTION(thousands of ounces)

SILVER PRODUCTION(millions of ounces)

COPPER PRODUCTION(millions of pounds)


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100

AVERAGEREALIZED PRICE

2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9

TOTAL CASH COSTS PER OUNCE OF GOLD

2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite

Peak Mines Cerro San Pedro

Cash and cash equivalents

Undrawn credit facility(2)

Second instalment of stream depositCash generated from operations

Adusted net cash from operations before working capital changes(1)

24%

24%

$595 MILLION 435,718OUNCES

$184

$336

21%

31%

$75


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75

In 2015, New Gold’s record full-year gold production of 435,718 ounces exceeded the high end of the guidance range of 390,000 to 430,000 ounces and delivered a 15 percent increase in production over 2014.

New Gold’s production costs remained competitive compared to the broader gold mining space as New Gold had total cash costs(1) of $443 per gold ounce sold and all-in sustaining costs(1) of $809 per gold ounce sold in 2015. We believe New Gold will continue to establish itself as one of the lowest-cost producers in the industry.

TABLE OF CONTENTS

FINANCIAL HIGHLIGHTS IFC

LETTER TO SHAREHOLDERS 2

LETTER FROM OUR CFO 6

LETTER FROM OUR COO 7

SCORECARD AND TARGETS 8

CORPORATE GOVERNANCE 9

OPERATIONS 10

PROJECTS 14

CORPORATE RESPONSIBILITY 18

RESERVES AND RESOURCES 20

FINANCIAL REVIEW 26

CORPORATE INFORMATION IBC

TOTAL CASH COSTS(1)

($ per gold ounce sold)

ALL-IN SUSTAINING COSTS(1)

($ per gold ounce sold)

GOLD PRODUCTION BY OPERATING MINE


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75

Note: All dollar figures are in U.S. dollars, unless otherwise noted.

This Annual Report contains information regarding New Gold’s 2015 guidance and other forward-looking information. Forward-looking information is based on various assumptions and is subject to risk. For further information, please refer to the inside back cover of this Annual Report.

On the cover: Grant Goddard, General Manager of New Gold’s Rainy River project, as cladding progresses on the grinding building. As of first quarter of 2016, construction at Rainy River is 30 percent complete.


(1) The company uses certain non- GAAP financial performance measures throughout this Annual Report. Average realized price, total cash costs and all-in sustaining costs per gold ounce sold, sustaining capital expenditures and adjusted net earnings are non-GAAP financial performance measures with no standard meaning under IFRS. For a description of each of the non-GAAP measures used in this Annual Report and a detailed reconciliation, please refer to the “Non- GAAP Financial Performance Measures” section of the Management’s Discussion and Analysis on pages 84–95.

(2) Of the $300 million credit facility, $115.9 million was utilized for letters of credit as at December 31, 2015.

New Gold maintains a strong liquidity position. The company’s December 31, 2015 cash balance of $336 million together with the receivable for Royal Gold’s second instalment under the stream agreement of $75 million (the receipt of which is subject to the satisfaction of certain conditions) and the $184 million available for drawdown under New Gold’s revolving credit facility provide approximately $595 million of liquidity in addition to the net cash the company’s operating mines are expecting to generate.


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75


($/ounce)

2013 2014 2015

500

450

400

350

300

398380

436

COPPER PRODUCTION

2013 2014 2015

125

100

75

50

25

0

85

102 100


2013 2014 2015

2,000

1,000

0

1,3371,256

1,149

2013 2014 2015

1,000

750

500

250

0

377312

443

SILVER PRODUCTION

2013 2014 2015

3

2

1

0

1.61.4

1.9


2013 2014 2015

1,000

750

500

250

0

899

779 809


CASH FLOW

2013 2014 2015

400

200

0

172

259 269

310

263 265

New Afton Mesquite






24%

24%


$184

$336

21%

31%

$75

AVERAGE REALIZED GOLD PRICE(1)

OPERATING CASH FLOW(1)

(in millions of U.S. dollars, except where noted)

2015 2014 2013OPERATING INFORMATION

Gold production (ounces) 435,718 380,136 397,688Gold sales (ounces) 428,852 371,179 391,823Average realized price ($/ounce)(1) 1,149 1,256 1,337Total cash costs per gold ounce sold ($/ounce)(1) 443 312 377All-in sustaining costs per gold ounce sold ($/ounce)(1) 809 779 899

FINANCIAL INFORMATION

Revenues 712.9 726.0 779.7Net loss (201.4) (477.1) (191.2)Adjusted net (loss) earnings(1) (10.9) 45.2 61.3Cash generated from operations 262.6 268.8 171.9

Adjusted cash generated from operations before changes in non-cash operating working capital(1) 265.0 310.4 258.6Cash and cash equivalents 335.5 370.5 414.4Capital expenditures (sustaining capital)(1) 121.5 129.8 159.5Capital expenditures (growth capital) 268.0 149.5 129.8

SHARE DATA

Loss per basic share ($) (0.40) (0.95) (0.39)Adjusted net (loss) earnings per basic share(1) ($) (0.02) 0.09 0.13


2 2015 NEW GOLD ANNUAL REPORT

Randall OliphantExecutive Chairman

The strong performance of gold prices in early 2016 is welcome news for the industry. If the trend continues, investors will be pleased to see 2015’s weak metal prices behind us. But in a sense, it’s what companies do in the tough times that positions them to prosper when times are better. At New Gold, we responded to the challenges of 2015 and, more importantly, focused on the opportunities that lie before us.

By way of an overview, New Gold emerged from 2015 with record gold production at low costs, increased our financial flexibility and maintained our strong balance sheet – all with the exciting potential of our Rainy River project drawing closer.

WHAT WE ACHIEVED

We had three key achievements in 2015:

1. We exceeded production guidance with record gold production at low costs. We were well-positioned with low-cost operations that continued to deliver healthy margins and robust cash flows. Together, our four operating mines increased gold production by 15 percent over the previous year. Our costs remain among the lowest of our peers, despite the impact of lower copper by-product revenues resulting from lower prices.

2. At our New Afton Mine, we completed the mill expansion ahead of schedule and under budget. We also completed a feasibility study for the exciting C-zone on the property, which presents an opportunity to extend the mine life of what is currently New Gold’s most significant cash flow generator.

3. We further strengthened our financial flexibility through two transactions: in July, we completed the sale of a $175 million Rainy River stream to Royal Gold, with $100 million paid on signing and the remaining $75 million to be paid when 60 percent of the project is complete. In November, we completed the sale of our 30 percent interest in the El Morro project to a subsidiary of Goldcorp in exchange for $62 million in net cash, a 4 percent stream on gold production from the property, and the cancellation of New Gold’s $94 million carried funding loan.

These two transactions collectively increased our liquidity position by approximately $235 million and eliminated $94 million in debt. They achieved an improvement of approximately $330 million in our financial position without issuing equity.

Throughout the year, while implementing cost-containment and continuous improvement measures, we remained focused on our growth strategy. We are investing in longer-lived, larger-scale, lower cost assets.

FELLOW INVESTORS,


CREATING VALUE AT RAINY RIVER

First up is the Rainy River project, which has the potential to increase New Gold’s current production substantially at lower all-in sustaining costs. The project is proceeding on schedule, with overall construction now 30 percent complete and initial equipment commissioned.

As construction is advanced, we see potential for continued value creation at Rainy River. Our experience at New Afton, for example, shows that significant value creation was realized during the 12 to 18 months prior to start-up as the mine moved closer to production and generating cash flow. Importantly, this trend of value creation has continued. At New Afton, we have now recouped well over half the initial development capital investment of $790 million and the mine continues to have a street consensus net asset value of $1.1 billion.

Next, we can assess the timing of development of our Blackwater project with a view to adding another large-scale, long-lived, low-cost producer to our portfolio. The Blackwater project has the potential to increase New Gold’s current production by over 450,000 ounces at lower all-in sustaining costs.

For 2016, we should continue to benefit from our low-cost profile and value-creating exploration programs. Production is scheduled to decrease as our Cerro San Pedro Mine transitions to residual leaching. Our total cash costs are expected to remain consistent despite lower by-product metal prices. After exploration successes at the Peak Mines last year, our 2016 program will focus on the delineation of new discoveries at Peak Mines, extension of the C-zone at New Afton and district reconnaissance at Rainy River. Throughout the year, we plan to move our exciting Rainy River project steadily forward to production.

GOLD PRICE RESILIENCE

Of course, the price of gold is a key driver of our planning and performance. Several factors are worth considering when reflecting on the path of the price of gold. As slow growth persists in Western economies and interest rates remain relatively low, with some now moving into negative territory, the fundamentals that support gold remain in place. Gold’s strong start to 2016 demonstrates the resilience of the commodity markets.

On the supply side, new discoveries have plummeted in recent years, as have exploration budgets. On the demand side, central bank buying has increased over the past decade and remains strong. While many investors remain focused on U.S. interest rates and the dollar, gold demand in the growing economies of China and India must be taken into consideration as well. The two countries now account for over 50 percent of the world gold market compared to about 6 percent for North America. In 2013, China became the world’s number one market for gold, reflecting 10 years of rapid growth and rising middle class affluence. For its part, India holds 15 percent of the world’s gold stock and accounts for 25 percent of annual global demand. In both these countries, there is a traditional affinity for gold as jewellery and as an investment. Continued economic growth in China and India holds potential upside for gold demand.

Whatever the path of the gold price, we believe New Gold, as a low-cost producer, is in a strong position to operate in a low gold price environment and well poised to benefit from rising gold prices through our existing operations and growth projects.

FELLOW INVESTORS,


GEARING UP FOR THE FUTURE

As we gear up for the future, we have made some important management changes. Robert Gallagher, our President and CEO, is retiring in June of this year. Bob has been a remarkable leader over the past eight years in the position. He has combined dynamism with a personal touch that has motivated employees and gained the trust of the First Nations groups near our sites, paving the way for respectful relationships. We will miss Bob, but are pleased that he will remain on our Board, offering his sage advice.

With Bob’s imminent departure we have drawn on our deep talent pool to put a new reporting structure in place. As Executive Chairman, I now have three direct reports: Brian Penny, Executive Vice President and Chief Financial Officer; Hannes Portmann, Executive Vice President, Business Development; and David Schummer, Executive Vice President and Chief Operating Officer.

We will also continue to be guided by an engaged Board of Directors. New Gold is fortunate to have an exceptionally talented Board, whose depth and breadth of experience and knowledge of the business we think is unmatched in the industry. For 2016, we are very pleased to welcome Ian Pearce, a new independent director. Mr. Pearce has over 25 years of experience in the mining industry, and his operational and management experience will further strengthen our team. One of our long-serving directors, Pierre Lassonde, decided not to stand for re-election to the Board. We owe a debt of gratitude to Pierre for the tremendous knowledge and insights he has provided. We are delighted that Pierre will remain a friend of New Gold and continue to be a shareholder of our company.

Our plans for profitable growth can only come to fruition with dedicated employees. They get full credit for our strong record of production, environmental protection and a safety record that is among the best in the industry.

New Gold is positioned with assets in politically stable regions, an experienced executive team who are shareholders themselves, low costs relative to our peers, strong cash flows and what we believe is the leading growth pipeline in the industry.

As our record shows, we have a history of value creation for the benefit of shareholders through ups and downs in the market. And I think that we are just getting started.

I thank our shareholders for their continued support.

Yours truly,

Randall Oliphant

“ Our solid operating performance in 2015, and particularly our record-setting fourth quarter, enabled us to generate cash flow similar to last year, despite the decrease in metal prices.”

Randall Oliphant Executive Chairman


“ In 2015, New Gold achieved the best safety results in its history and, we believe, the best in the industry – as measured by our Lost-Time Injury Frequency Rate and our Total Reportable Injury Frequency Rate.”

Robert Gallagher President and Chief Executive Officer



During 2015, New Gold continued its steady, disciplined approach to managing the company’s financial resources. We took steps during the year to increase our financial flexibility and further strengthen our balance sheet. Coupled with the free cash flow generation from our operations that we expect in 2016, these factors provide us with the opportunity to invest in the future of our business.

During a year of low metal prices, our team performed well, better positioning us to benefit from rising gold prices and realize our goals.

2015 highlights included:

• Our operations delivered record gold production.

• 2015 revenues of $713 million remained in line with the prior year as increased gold and silver sales volumes largely offset the combination of lower copper sales volumes and lower realized metal prices.

• Full-year cash generated from operations was $263 million, remaining in line with the prior year despite lower metal prices.

• Our balance sheet grew stronger.

• At year end, our total liquidity position was $595 million.

Overall, we buttressed our financial resources in support of the continued development of our Rainy River project. The size of the prize justifies our focus: we expect this mine to be a game-changer for the company, with the potential to nearly double New Gold’s cash flow.

A vital part of preparing for the future is sound financial stewardship. This means continually monitoring the landscape to ensure we are well positioned to handle lower metal prices as well as benefit from higher ones.

In order to provide additional financial flexibility and strengthen the balance sheet, we completed two transactions, which are discussed in the letter to shareholders. First, our streaming agreement with Royal Gold, and second, the sale of our 30 percent interest in El Morro.

The combination of our year end cash, the remaining stream deposit and the amount available on our credit facility provides New Gold with total liquidity of $595 million. When you combine these transactions with our strong cash generating potential at current metal prices, we are well positioned to fund the development of Rainy River.

This is good news for investors who share our vision that investing in larger, longer-lived, lower-cost assets should position us for a bright future.

As we plan for exciting growth, we appreciate the continued support of our investors. From your perspective, the future is fast approaching as Rainy River moves closer to start-up. We have the financial resources in place, strong expected cash flows, an experienced development team and a management team with a track record of creating value for shareholders.

Yours truly,

Brian Penny

Brian PennyExecutive Vice President and Chief Financial Officer

LETTER FROM OUR CFO


When I review our operating performance for the year, I am impressed by what our employees achieved across the board, from record-high production, to an industry-leading safety record, to impressive results for value creation through business improvements. They can be deservedly proud of their achievements.

We coupled record-high gold production with a safety record that we believe is among the best in the industry. We can also be proud of our strong environmental record. Our best-practices approach, combined with our commitment to good, mutually beneficial relations with local communities and First Nations, reinforces public confidence in our operations.

Our efforts to create value through business improvements are also paying off. At the corporate level, we set up a cost-optimization initiative that has already resulted in the identification of millions of dollars in savings from such measures as better management of our supply chain. We’ve also identified opportunities for additional savings over the next few years through better mine sequencing and throughput optimization.

At the same time, our employees are taking a lot of ownership over business improvement. They are communicating its importance and getting people energized about it. For my part, I bring a passion to business improvement that I learned working as a youth at my grandfather’s construction business in the gold district of California. The company was quite small, and failing to capitalize on every opportunity to ensure and improve the operational execution of any contract could result in little or no profit being realized.

At New Gold, we are already a lean company, with very hard-working employees. But frequent, holistic examinations of the way we do things enables significant improvements. It’s simple: if you see a bottleneck or problem with something, take it apart and put it back together in order to make it work better, eliminating any identified constraints to the value chain in the process of

doing so. My aim is to encourage every employee to continue to come to work every day looking for better ways to do things.

Our efforts are bearing fruit. In 2015, our New Afton team completed a mill expansion ahead of schedule and under budget. All sites made very significant improvements to operational efficiency in general and did an excellent job managing costs. Congratulations to everyone involved.

2016 promises to be another exciting year for New Gold. We expect another strong production performance with continued low costs, healthy operating margins and strong cash flow generation. Personally, I will continue to benefit from the guidance of our President and CEO, Bob Gallagher, before and after his retirement in June, particularly with regard to further building our good relations with First Nations near our Rainy River and Blackwater projects.

Across our sites, we will continue to focus on delivering against guidance, generating strong cash flows and looking for operating efficiencies and cost savings. Together, these efforts help position New Gold to create value for shareholders through developing our growth pipeline.

Yours truly,

David Schummer

David SchummerExecutive Vice President and Chief Operating Officer

LETTER FROM OUR COO

2016 TARGETS

360,000–400,000 oz

Gold production will decrease as Cerro San Pedro transitions to residual leaching

$825–$865 per oz

targeted all-in sustaining costs among the lowest in the industry, with total cash costs of $435–$475 per ounce

81– 93 million pounds

of copper production, and 1.6–1.8 million ounces of silver production

New AftonFurther drill test the C-zone ore body with the objective of adding additional mine life

Rainy RiverThe 2016 development program is expected to advance overall construction to 75%

$355 per oz

estimated all-in sustaining cost margin for 2016

435,718 oz

Record gold production exceeded high end of guidance range

$809 per oz

All-in sustaining costs are among the lowest in the industry, with total cash costs of $443 per ounce

New AftonMill expansion completed ahead of schedule and under budget. Completed C-zone feasibility study

Rainy RiverOverall construction progress is over 30% complete as of first quarter 2016

100of copper production with 1.9 million ounces of silver production

million pounds

$340 per oz

all-in sustaining cost margin for 2015

2015 SCORECARD



Good corporate governance and the integrity it entails are a strength of New Gold. We believe values in a company start at the top among the executive team and the Board of Directors, and flow through the organization. In this regard, we are fortunate to have a management team and Directors who place the highest priority on integrity. Our Board is made up of exceptional, well-respected individuals who differentiate us based on their extensive, multi-disciplinary experience and outstanding track records in the resource sector and related disciplines. At New Gold, we believe the company should be managed in an ethical manner and in keeping with the highest standards of social and environmental responsibility. This commitment is reflected in our Code of Business Conduct and Ethics, and our Health, Safety, Environment and Corporate Social Responsibility Policy. We also subscribe to the principles, including governance standards, set out by major domestic and international bodies such as the UN Global Compact on Human Rights.

More broadly, the Board’s objectives are to enhance and preserve long-term shareholder value and to ensure the company meets its obligations on an ongoing basis and operates in a safe and reliable manner. In performing its functions, the Board also considers the legitimate interests that our other stakeholders such as employees, customers and communities may have in the company. In overseeing the conduct of business, the Board, through the Executive Chairman and Chief Executive Officer, sets the standards of conduct for the company.

Images from left to right

1. RANDALL OLIPHANTRandall Oliphant is Executive Chairman of New Gold and is also Chairman of the World Gold Council. He is on the board of directors of Franco-Nevada Corporation, WesternZagros Resources Ltd. and Newmarket Gold Inc. Since 2003, Mr. Oliphant has served on the boards of a number of public companies and not-for-profit organizations. Mr. Oliphant was the Chairman of Western Goldfields Inc. until its business combination with New Gold in 2009.

2. DAVID EMERSONDavid Emerson is a Director and Public Policy Advisor. He has served as a minister in the Government of Canada, including Minister of Foreign Affairs, Minister of International Trade and Minister of Industry, and has also held a number of senior positions in the public service in British Columbia. Mr. Emerson serves on the board of Stantec Inc., and is Chairman of Maple Leaf Foods Inc.

3. JAMES ESTEY James Estey is the retired Chairman of UBS Securities Canada Inc. and has over 30 years of experience in the financial markets. In 2002, he was appointed President and Chief Executive Officer of UBS Securities Canada, and in January 2008, Mr. Estey assumed the role of Chairman. He serves on the board of Gibson Energy Inc. and is Chairman of PrairieSky Royalty Ltd.

4. ROBERT GALLAGHERRobert Gallagher is the President and Chief Executive Officer of New Gold. Mr. Gallagher has worked in the mining industry for over 40 years, including executive positions with Placer Dome Inc. and Newmont Mining Corporation. Before the June 2008 business combination of Peak Gold Ltd., Metallica Resources Inc. and New Gold, Mr. Gallagher was the President and Chief Executive Officer of Peak Gold Ltd.

5. VAHAN KOLOLIANVahan Kololian is the founder and Managing Partner of TerraNova Partners LP, which invests in the industrial, services and resource sectors. He was co-founder and President of Polar Capital Corporation. Within his activities in TerraNova Partners, he serves as Chairman of one of TerraNova’s investees, Compact Power Equipment Centers LLC. Mr. Kololian also serves on the board of Lydian International Limited.

6. MARTYN KONIG Martyn Konig has over 35 years of experience in investment banking and the commodity markets as well as extensive experience in the natural resource sector. He is the Chief Investment Officer for T Wealth Management SA, and has been the Chairman of Euromax Resources Ltd. since May 2012. Mr. Konig was Executive Chairman and President of European Goldfields Limited until its acquisition by Eldorado Gold Corp. in February 2012.

7. PIERRE LASSONDEPierre Lassonde is the Chairman of Franco-Nevada Corporation. He formerly served as President of Newmont Mining Corporation from 2002 to 2006 and was Director and Vice Chairman of Newmont until 2007. Mr. Lassonde also serves on the board of directors of Enghouse Systems Limited. Mr. Lassonde is a Member of the Order of Canada and was inducted into the Canadian Mining Hall of Fame in 2013.

8. KAY PRIESTLY Kay Priestly joined the Board in June 2015, having spent 24 years with Arthur Andersen LLP, ultimately serving as Managing Partner. From 2006 to 2014, Ms. Priestly held various executive positions with Rio Tinto, and from 2012 to 2014 she was CEO of Turquoise Hill Resources Ltd. Ms. Priestly currently serves on the boards of Stone Energy Corporation and FMC Technologies, Inc.

9. RAYMOND THRELKELDRaymond Threlkeld is a Director and consultant on natural resource development, and has over 30 years of mineral industry experience. He was President and Chief Executive Officer of Rainy River Resources Ltd. until its acquisition by New Gold in 2013. From 2006 to 2009, he was the President and Chief Executive Officer of Western Goldfields Inc., until its business combination with New Gold. In March 2014, Mr. Threlkeld was appointed Chairman of Newmarket Gold Inc.

CORPORATE GOVERNANCE


Located 10 kilometres from Kamloops, British Columbia, the New Afton Mine is a low-cost gold and copper producer with significant upside potential. In 2015, its third year of full production, New Afton continued its track record of value creation through operating improvements and exploration.

Among its value-enhancing achievements, New Afton:

• Completed a mill expansion below budget and ahead of schedule in the second quarter, significantly adding to its cash flow generation potential.

• Completed a feasibility study for the site’s C-zone, which has the potential to extend the mine life at this valuable asset.

New Afton’s 2015 gold production of 105,487 ounces was within guidance and remained consistent with 2014, as a planned 6 percent increase in mill throughput offset an expected decrease in gold grade.

Copper production of 86 million pounds was also consistent with the prior year. In line with gold production, the higher mill throughput offset an expected decrease in copper grade, while copper recovery remained consistent with the prior year. New Afton’s full-year copper production was within its guidance range of 85 to 95 million pounds.

Costs were impacted by lower copper by-product prices. New Afton’s 2015 full-year all-in sustaining costs of negative $242 per ounce, including total cash costs of negative $724 per ounce, increased relative to the prior year primarily due to lower copper by-product revenues resulting from lower copper prices.

For 2016, gold production at New Afton is expected to decrease by approximately 10 percent relative to 2015 as a decrease in gold grade is only partially offset by the benefit of the mine operating at the higher throughput rate for the full year. Similarly, 2016 copper production is scheduled to decrease by approximately 7 percent, due to the mining and processing of lower-copper-grade ore.

New Afton’s all-in sustaining costs and total cash costs, whether measured on a by-product or co-product basis, are expected to remain among the lowest in the industry.

In terms of value creation at New Afton, nothing is more exciting than the potential of the C-zone. Beyond the seven years of mine life in the B-zone, the C-zone has the potential to add five and half years of additional mine life to New Afton. The C-zone is a continuation of the main New Afton deposit that lies down and along strike of the reserve that is currently being mined. During 2015, New Afton completed a feasibility study for the C-zone to confirm design parameters and project economics, which includes optimization of the underground mine and infrastructure designs, the production schedule, project costs, tailings and stabilization test work, tailings designs and continued baseline environmental work. Work expected to be completed in 2016 includes additional exploration drilling, permit-amendment preparation and submission, mine optimization and planning reviews.

2015 PRODUCTION

105,487Gold (ounces)

86 million

Copper (pounds)

$(724)Total cash costs per ounce (net of by-product sales)

$(242)All-in sustaining costs per ounce (net of by-product sales)

2016 GUIDANCE

90,000– 100,000Gold (ounces)

75–85 million

Copper (pounds)

$(335)–$(295)Total cash costs per ounce (net of by-product sales)

$95–$135All-in sustaining costs per ounce (net of by-product sales)

NEW AFTON MINE

New Afton continued to be the company’s most significant cash flow generator in 2015 thanks to strong, steady gold and copper production that results in all-in sustaining costs that remain among the lowest in the industry.

OPERATIONS


Mesquite Mine is located in Imperial County, California, approximately 70 kilometres northwest of Yuma, Arizona and 230 kilometres east of San Diego, California. It is an open pit, run-of-mine heap leach operation, which New Gold acquired in mid-2009 as part of a business combination with Western Goldfields.

Mesquite’s 2015 production increased by 26 percent to 134,868 ounces over 2014, as the operation benefitted from a successful leach pad expansion coupled with a large increase in ore tonnes placed on the pad. Mesquite achieved a 48 percent increase in ore tonnes placed on the leach pad, the benefit of which was only partially offset by lower gold grade. The combination of record ore tonnes placed and accelerated recoveries from the successful leach pad expansion resulted in Mesquite’s full-year production significantly exceeding its guidance range of 110,000 to 120,000 ounces.

Costs were lower than 2015 and below guidance. Mesquite’s 2015 total cash costs decreased by $166 per ounce to $743 per ounce relative to the prior year. This decrease reflected higher gold sales volumes and lower diesel prices. Mesquite’s all-in sustaining costs decreased by $110 per ounce to $1,156 per ounce when compared to 2014.

Reducing costs further is a constant focus at Mesquite, in particular through a continuous improvement strategy that is beginning to bear fruit. For 2016, Mesquite’s gold production is expected to remain in line with 2015, but with a decrease in costs attributable to continued operational efficiencies as well as lower diesel prices.

Expenditures in 2016 are expected to include $45 million for capitalized stripping, $12 million for plant and equipment, and $8 million to complete the leach pad expansion.

For 2017, production is expected to increase to over 150,000 ounces as gold grade should continue to increase. Higher production is scheduled to be coupled with lower costs.

2015 PRODUCTION


$743Total cash costs per ounce

$1,156All-in sustaining costs per ounce

2016 GUIDANCE

130,000– 140,000Gold (ounces)

$590–$630Total cash costs per ounce

$1,015– $1,055All-in sustaining costs per ounce

MESQUITEMINE

Mesquite was once again a solid performer in New Gold’s suite of assets in 2015. Production increased by 26 percent at lower costs compared to 2014, significantly beating guidance on both counts.


2015 PRODUCTION

89,852Gold (ounces)

14.0 million

Copper (pounds)

$791Total cash costs per ounce (net of by-product sales)

$1,071All-in sustaining costs per ounce (net of by-product sales)

2016 GUIDANCE

80,000– 90,000Gold (ounces)

6–8 million

Copper (pounds)

$800–$840Total cash costs per ounce (net of by-product sales)

$1,020– $1,060All-in sustaining costs per ounce (net of by-product sales)

Peak Mines is a gold and copper underground mining operation located in the Cobar Mineral Field, near Cobar, in New South Wales, Australia. Peak Mines comprises four mines and a gold-copper processing plant. The deposits include Perseverance, Peak, Chesney and New Cobar.

The Peak Mines’ 2015 gold production was within its guidance range for the full year, but it was below prior-year production, as expected, primarily due to a 6 percent decrease in tonnes milled.

After the mine experienced geotechnical challenges in the first quarter, the team continued to deliver steady quarter-over-quarter production increases, with fourth quarter production the highest of the year.

2015 copper production of 14 million pounds was also below the prior year due to the combined impact of lower ore tonnes, copper grade and recovery. Full-year copper production was slightly below the mine’s guidance range of 15 to 17 million pounds.

For 2015, total cash costs, net of by-product sales, were $791 per ounce of gold, compared to $658 per ounce in the prior year. All-in sustaining costs were $1,071 per ounce, compared to $1,025 for the prior year. Cash costs and all-in sustaining costs were impacted by lower copper by-product revenue and lower gold sales volumes, partially offset by the depreciation of the Australian dollar relative to the U.S. dollar.

For 2016, gold production is expected to remain in line with 2015. Copper production is expected to decrease since the mine plan intentionally focuses on mining more gold-rich ore bodies. Our strategy is to optimize the gold-copper production mix to maximize cash flow for 2017. Total cash costs are expected to be $800 to $840 per ounce and all-in sustaining costs $1,020 to $1,060 per ounce of gold.

Exploration crews continued their long track record of success in 2015. Discoveries included: the Chronos discovery, a system of high-grade gold-copper and lead-zinc-silver lenses extending above the top of the Perseverance ore body; and the Anjea discovery, a system of copper-gold and lead-zinc-silver lenses located immediately south of the historic Great Cobar mine. Reconnaissance drilling also identified several early-stage targets along the mine corridor. The 2016 exploration program involves delineating resource status to inferred status at Chronos and Anjea and drilling to test the newly identified targets along the mine corridor.

Since Peak Mines began production in 1992, it has had a remarkable record of exploration success that has continually extended its mine life.

Peak Mines achieved gold production guidance and confirmed two new discoveries in 2015, continuing a long history of strong production and exploration success.

PEAK MINES


As planned, Cerro San Pedro’s 2015 production increased by 51 percent to 105,512 ounces when compared to 2014. The increase in annual production was due to a 66 percent increase in ore tonnes placed on the leach pad as mining activity in 2014 was primarily focused on waste stripping.

As a result of the mine’s strong operating performance, Cerro San Pedro’s 2015 gold production exceeded its guidance range of 90,000 to 100,000 ounces. At the same time, Cerro San Pedro’s full-year silver production of 1.5 million ounces increased by 37 percent relative to the prior year and was the key contributor to New Gold’s consolidated silver production being within the company’s guidance range of 1.8 to 2.0 million ounces.

Cerro San Pedro’s 2015 costs were well below guidance. All-in sustaining costs of $879 per ounce of gold, including total cash costs of $865 per ounce, decreased by $475 per ounce relative to 2014. The significant decrease in costs relative to 2014 was attributable to the combination of higher gold sales volumes, the depreciation of the Mexican peso relative to the U.S. dollar and lower sustaining costs.

As expected, Cerro San Pedro completed its final full year of active mining in 2015. Gold production in 2016 is scheduled to decline to a range of 60,000 to 70,000 ounces as the mine transitions to residual leaching. Ore is scheduled to be mined and placed on the leach pad during the

majority of the first half of 2016, after which Cerro San Pedro will begin residual leaching. Cerro San Pedro’s 2016 silver production is expected to remain in line with prior-year production since silver leaches over a longer time period, driving a slower decline rate in annual silver production during the residual leach phase.

2016 all-in sustaining costs and total cash costs are expected to remain in line with, or below, those achieved in 2015 despite the mine’s lower gold production base and the expected decrease in by-product revenues from the lower silver price. As the mine transitions to residual leaching, Cerro San Pedro’s operating costs are scheduled to decrease meaningfully as a result of reduced mining activity and lower general and administrative expenses.

Gold production from residual leaching in 2017 is expected to be approximately 40 percent of the targeted 2016 production, while silver production is expected to be approximately 1 million ounces.

The Cerro San Pedro team can be extremely proud of the mine’s record as an outstanding contributor.

2015 PRODUCTION


1.5 million

Silver (ounces)

$865Total cash costs per ounce (net of by-product sales)

$879All-in sustaining costs per ounce (net of by-product sales)

2016 GUIDANCE

60,000– 70,000Gold (ounces)

1.3–1.5 million

Silver (ounces)

$755–$795Total cash costs per ounce (net of by-product sales)

$765–$805All-in sustaining costs per ounce (net of by-product sales)

Cerro San Pedro had a stellar year in 2015, with a 51 percent increase in production at lower costs, capping multiple years of strong performance before it transitions to residual leaching in 2016.

CERRO SAN PEDRO MINE


New Gold’s Rainy River project in northwestern Ontario is located in a politically secure, mining-friendly jurisdiction – it offers tax synergies with New Gold’s other Canadian assets, and has compelling economics. The project sits within a broader land package of approximately 192 square kilometres. Ideally located, it benefits from its proximity to existing infrastructure, including hydroelectric power, a railway line and a network of all-weather roads that branch off from the well-maintained Trans-Canada Highway.

Development highlights for 2015 include:

• The federal and provincial governments approved the project’s Environmental Assessment in January, enabling the processing of construction-related permits.

• Also in January, New Gold completed the acquisition of Bayfield Ventures Corp. (“Bayfield”), further consolidating its holdings in the district.

• New Gold successfully concluded a Participation Agreement with Big Grassy First Nation during the first quarter of 2015. This agreement is in addition to agreements that have already been signed with Rainy River First Nations, Naicatchewenin First Nation, the Métis Nation of Ontario and four communities of the Fort Frances Chiefs Secretariat.

• Assembly of initial mine fleet substantially completed.

• Detailed engineering completed.

During the year, our exploration team completed the integration of mineral resources on the property’s Burns Block, which was acquired as part of the Bayfield acquisition, into underground reserves and drill tested two early-stage targets north and south of the central mine development area. For 2016, the team will continue to advance district reconnaissance and target identification.

2015 capital expenditures totalled $246 million, which includes $241 million for development capital costs and the remainder primarily for exploration. This compares to $81 million in the prior year. Total project development capital spending through December 31, 2015 was $312 million.

In 2016, New Gold plans to spend approximately $500 million at Rainy River, with the balance to be spent in the first half of 2017. By the end of 2016, the company is expected to advance overall construction to 75 percent completion.

Over its first nine years of full production, the 21,000-tonnes-per-day, combined open pit–underground operation is scheduled to produce an average of 325,000 ounces of gold per year at well below industry average costs.

The Rainy River project enhances New Gold’s growth pipeline through its manageable capital costs, significant production scale at below-current-industry average costs and exciting regional exploration potential in a great mining jurisdiction.

The Rainy River project is an example of New Gold’s strategy of investing in longer-lived, larger-scale, lower-cost assets. When it comes on stream next year, Rainy River has the potential to boost our company’s annual gold production by 75 percent from current levels at lower all-in sustaining costs.

PROVEN AND PROBABLE RESERVES

3.8 million

Gold (ounces)

9.4 million Silver (ounces)

MEASURED AND INDICATED RESOURCES

2.6 million

Gold (ounces)


RAINY RIVER PROJECT

PROJECTS


PROVEN AND PROBABLE RESERVES

8.2 million

Gold (ounces)


MEASURED AND INDICATED RESOURCES

1.3 million

Gold (ounces)


Located in the politically secure jurisdiction of south-central British Columbia, Blackwater is planned as a conventional truck and shovel open pit mine. The project benefits from our great relationships with Indigenous communities, other stakeholders and regulators – building on the excellent relations established at our New Afton mining operation.

Blackwater lies in a highly prospective land package of over 1,000 square kilometres. During 2015, Blackwater continued with environmental and permitting activities as well as exploration efforts.

2015 environmental and permitting activities included:

• Comments from key regulatory agencies and First Nations on the Environmental Assessment report were addressed.

• The federal and provincial governments accepted the Environmental Assessment report into the technical review process in the fourth quarter of 2015.

• The technical review process and a public review of the Environmental Assessment report began in January 2016, with receipt of provincial and federal Environmental Assessment approvals expected in late 2016 or early 2017.

• Continued key engineering studies for advancement of post-Environmental Assessment approval permits.

• Continued discussions with key First Nations on Participation Agreements.

Exploration crews were also busy. During the year, they confirmed the Blackwater mineralization signature extends several kilometres west and south of the main deposit, which is more widespread than previously known. The results provide further confirmation of the area’s strong potential for the discovery of additional gold and silver resources.

In the current commodity price environment, New Gold plans to sequence the development of its projects with the near-term focus on the advancement of the lower-capital-cost Rainy River project. Thereafter, the timing of Blackwater’s development will be driven by prevailing market conditions.

The Blackwater project is expected to produce an average of 485,000 ounces of gold per year at below industry average costs.

BLACKWATER PROJECT


RAINY RIVER GOLD PROJECT

South end of grinding building – preparing to hoist the 60-tonne overhead crane into position.

Early development of the Rainy River project.



East side of grinding building –cladding and roofing being installed.

Beginning of the grinding building steel erection.Members of the environment team in the field.

Installation of a multi-plate tunnel at the primary crusher.Komatsu 830E haul truck working at the site.


CORPORATE RESPONSIBILITYNew Gold is committed to operating in an economically, socially and environmentally sustainable way. Our success in doing so is equally instrumental to our long-term success as is our strong, low-cost production and industry-leading growth pipeline. We are creating value that is reflected in the well-being of our employees, the communities where we operate and the environment where we all live.

The company is proud to have been listed in the Maclean’s/Sustainalytics – Top 50 Socially Responsible Corporations in Canada and in the Future 40 Most Responsible Corporate Leaders in Canada by Corporate Knights for the second consecutive year.

HEALTH AND SAFETY

The starting point for all our achievements, including in the areas of social responsibility, is the health and safety of our employees. We seek to ensure that they are safe in their workplaces and empowered in their career aspirations.

New Gold had an outstanding safety performance record in 2015, with among the lowest lost-time injury frequency and severity rates within the gold mining sector. Credit goes to our employees for this achievement. Across our sites, our approach is to conduct field-risk assessments that identify risks before they become accidents. This involves one-on-one coaching and individual risk assessments in which employees describe how they would perform a task with a view to making sure they do it the safe way. Combined with standard safety inspections, this qualitative approach has helped drive our safety incidents to record lows for the company.

ENVIRONMENT

Wherever New Gold operates – in all stages of mining activity, from early exploration and planning, to commercial mining operations through to eventual closure – the company is committed to excellence in environmental management. From the earliest site investigations, New Gold carries out comprehensive environmental studies to establish baseline measurements for flora, fauna, earth, air and water. During operations, the company promotes the efficient use of raw materials and resources and works to minimize environmental impacts and maintain robust monitoring programs. After mining activities are complete, New Gold’s objective is to restore the land to a level of productivity equivalent to its pre-mining capacity, wherever possible, or to an alternative land use determined through consultation with local stakeholders.

OUR STANDARDS

New Gold’s commitment to responsible mining is part of our corporate vision and is set out in our Health, Safety, Environment and Corporate Social Responsibility (HSE & CSR) Policy. The HSE & CSR Committee of our Board of Directors provides oversight of our progress and adherence to the principles of our policy.

We are signatories of the United Nations Global Compact and our policies and practices are guided by its principles with reference to human rights, labour, environmental stewardship and anti-corruption. Our standards are based on best practices and international guidance such as ISO 14001 (Environmental), OHSAS 18001 (Occupational Health and Safety), ISO 26000 (Social Responsibility) and the International Cyanide Management Code. As a member of the Mining Association of Canada (“MAC”), New Gold’s operations adopt the MAC’s Towards Sustainable Mining protocols.


Highlights in 2015 included:

• Our New Afton Mine remains the only mine in North America with ISO 50001 Energy Management certification.

• We implemented our Independent Tailings Review Board for our Canadian operations, as part of our assurance program, and showed continued improvement of our systems against the Towards Sustainable Mining Tailings Management Protocol. One of the challenges faced by our industry is ensuring the confidence of our stakeholders in our tailings facilities. We believe that through constant communication, we can answer the questions that our host communities have every right to ask.

• Cerro San Pedro completed its reforestation program in the community of Monte Caldera.

COMMUNITY

Our track record of contributing to the lasting economic dynamism of local communities and creating trusting, mutually beneficial relations with First Nations and other community groups is a legacy we intend to build on. With our successful efforts at New Afton as our calling card, we are continuing to develop strong relationships with First Nations at our Rainy River and Blackwater projects. Our good relationships are based on trust and personal associations, and we are committed to respect local cultures and traditions as well as to understand their concerns and expectations.

Highlights in 2015 included:

• We reached agreements with principal First Nations at the Rainy River project and are working toward agreements with other important groups. We are seeking to ensure we make the most of opportunities for our partners in the areas of business opportunities and employment. These efforts are already bearing fruit through employment and contracts for First Nations community members as construction proceeds.

• Cerro San Pedro continued to work with communities as we move toward closure by continuing to support an entrepreneurship program and a local fair to encourage small business. We expect great results from our entrepreneurial program such that the local communities are left with a diverse and vibrant economy.

New Gold’s approach is to foster open communication with local residents and community leaders. We aim to partner in the long-term sustainability of those communities. The company believes that by thoroughly understanding the people, their histories, and their needs and aspirations, we can engage in a meaningful and sustainable development process.

KEY OBJECTIVES FOR 2016

• Continue to achieve a “safety-first” culture with industry-leading results.

• Complete mutually beneficial agreements with First Nations around the Rainy River project.

• Conduct Independent Tailings Review Board meetings for Canadian operations and projects.

• Review the Environmental and Social Responsibility (”ESR”) material risk management process.

• Develop a corporate strategy for maximizing local procurement and employment.



SUMMARY OF MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES On February 17, 2016, the company reported consolidated Mineral Reserve and Mineral Resource estimates for its mines and development projects as at December 31, 2015. A consolidated summary of total gold, copper and silver contained within New Gold’s global Mineral Reserves and Mineral Resources is set out in the table below. Measured and Indicated Mineral Resources are reported exclusive of Mineral Reserves.

New Gold’s Mineral Reserve and Mineral Resource estimates have been reviewed and approved by Mr. Mark A. Petersen, a Qualified Person as defined under NI 43-101.

MINERAL RESERVES AND MINERAL RESOURCES SUMMARY TABLE

GOLD Koz

SILVER Moz

COPPER Mlbs

Proven and Probable Reserves 14,985 76 1,194

New Afton 1,228 4 1,112

Mesquite 1,492 – –

Peak Mines 267 1 82

Cerro San Pedro 13 – –

Rainy River 3,814 9 –

Blackwater 8,170 61 –

Measured and Indicated Resources (exclusive of Reserves) 6,659 34 1,065

Inferred Resources 1,844 24 194

MINERAL RESERVE ESTIMATES

METAL GRADE CONTAINED METAL

Tonnes 000s

Gold g/t

Silver g/t

Copper %

Gold Koz

Silver Koz

Copper Mlbs

NEW AFTON A&B-zonesProven – – – – – – – Probable 36,510 0.55 2.4 0.85 646 2,765 681 C-zoneProven – – – – – – –Probable 25,040 0.72 1.8 0.78 583 1,447 430 Total New Afton P&P 61,550 0.62 2.1 0.82 1,228 4,212 1,112

MESQUITE Proven 8,473 0.51 – – 139 – – Probable 75,807 0.56 – – 1,353 – –Total Mesquite P&P 84,280 0.55 – – 1,492 – –

Notes to the Mineral Reserve and Mineral Resource Estimates are provided on page 25 of this Annual Report.

MINERAL RESERVESMineral Reserve estimates as at December 31, 2015 are presented in the following table:


MINERAL RESERVE ESTIMATES (CONTINUED)


Tonnes 000s

Gold g/t

Silver g/t

Copper %

Gold Koz

Silver Koz

Copper Mlbs

PEAK MINES Proven 1,520 3.31 7.2 1.30 162 349 44 Probable 1,360 2.42 6.7 1.29 105 291 38 Total Peak Mines P&P 2,870 2.89 6.9 1.29 267 640 82

CERRO SAN PEDRO Proven 289 0.35 9.7 – 3 90 – Probable 748 0.41 13.7 – 10 329 –Total Cerro San Pedro P&P 1,038 0.40 12.6 – 13 419 –

RAINY RIVER Direct processing material Open pit Proven 17,001 1.40 2.0 – 763 1,075 – Probable 52,950 1.18 2.8 – 2,003 4,690 – Open pit P&P (direct processing) 69,952 1.23 2.6 – 2,766 5,765 – Underground Proven – – – – – – – Probable 4,499 5.00 11.8 – 723 1,709 – Underground P&P (direct processing) 4,499 5.00 11.8 – 723 1,709 – Stockpile material Open pit Proven 5,496 0.37 1.5 – 65 259 – Probable 23,302 0.35 2.3 – 261 1,701 – Open pit P&P (stockpile) 28,798 0.35 2.1 – 325 1,959 – Total P&P Proven 22,498 1.14 1.8 – 828 1,333 – Probable 80,752 1.15 3.1 – 2,987 8,100 – Total Rainy River P&P 103,250 1.15 2.8 – 3,814 9,433 –

BLACKWATER Direct processing material Proven 124,500 0.95 5.5 – 3,790 22,100 –Probable 169,700 0.68 4.1 – 3,730 22,300 – P&P (direct processing) 294,200 0.79 4.7 – 7,520 44,400 – Stockpile material Proven 20,100 0.50 3.6 – 325 2,300 – Probable 30,100 0.34 14.6 – 325 14,100 – P&P (stockpile) 50,200 0.40 10.2 – 650 16,400 – Total Blackwater P&P 344,400 0.74 5.5 – 8,170 60,800 – Total P&P 14,985 75,504 1,194

Notes to the Mineral Reserve estimates are provided on page 25 of this Annual Report.


MEASURED AND INDICATED MINERAL RESOURCE ESTIMATES (EXCLUSIVE OF MINERAL RESERVES)


Tonnes 000s

Gold g/t

Silver g/t

Copper %

Gold Koz

Silver Koz

Copper Mlbs

NEW AFTON A&B-zones Measured 16,940 0.69 2.1 0.87 377 1,134 325 Indicated 10,512 0.46 2.2 0.68 156 749 157 A&B-zones M&I 27,451 0.60 2.1 0.80 534 1,878 482 C-zone Measured 2,230 1.05 2.2 1.21 75 161 59 Indicated 15,462 0.79 2.2 0.96 392 1,075 326 C-zone M&I 17,693 0.82 2.2 0.99 467 1,226 386 HW lens Measured – – – – – – – Indicated 10,560 0.51 2.1 0.44 174 703 102 HW lens M&I 10,560 0.51 2.1 0.44 174 703 102 Total New Afton M&I 55,704 0.66 2.1 0.79 1,175 3,809 971

MESQUITE Measured 4,595 0.40 – – 60 – – Indicated 50,524 0.47 – – 771 – – Total Mesquite M&I 55,119 0.47 – – 831 – –

PEAK MINES Measured 2,000 3.56 5.9 0.94 220 370 41 Indicated 2,100 3.20 8.9 1.14 220 610 53 Total Peak Mines M&I 4,100 3.37 7.5 1.04 440 980 94

CERRO SAN PEDRO Measured – – – – – – – Indicated – – – – – – – Total Cerro San Pedro M&I – – – – – – –

RAINY RIVER Direct processing material Open pit Measured 3,294 1.19 1.8 – 127 185 – Indicated 37,530 1.15 3.5 – 1,391 4,189 – Open pit M&I (direct processing) 40,824 1.15 3.3 – 1,518 4,374 – Underground Measured – – – – – – – Indicated 4,834 3.74 12.6 – 581 1,952 – Underground M&I (direct processing) 4,834 3.74 12.6 – 581 1,952 –

MINERAL RESOURCESMineral Resource estimates as at December 31, 2015, exclusive of Mineral Reserves, are presented in the following tables:


MEASURED AND INDICATED MINERAL RESOURCE ESTIMATES (EXCLUSIVE OF MINERAL RESERVES) (CONTINUED)


Tonnes 000s

Gold g/t

Silver g/t

Copper %

Gold Koz

Silver Koz

Copper Mlbs

RAINY RIVER (continued)

Stockpile material Open pit Measured 1,244 0.35 1.3 – 14 51 – Indicated 36,360 0.43 2.5 – 500 2,942 – Open pit M&I (stockpile) 37,604 0.43 2.5 – 514 2,993 – Total M&I Measured 4,538 0.97 1.6 – 141 236 – Indicated 78,724 0.98 3.6 – 2,472 9,083 – Total Rainy River M&I 83,262 0.98 3.5 – 2,613 9,319 –

BLACKWATER Direct processing material Measured 289 1.39 6.6 – 13 61 – Indicated 41,128 0.86 4.5 – 1,135 5,950 – M&I (direct processing) 41,417 0.86 4.5 – 1,147 6,012 – Stockpile material Measured – – – – – – – Indicated 14,070 0.32 4.0 – 144 1,809 – M&I (stockpile) 14,070 0.32 4.0 – 144 1,809 – Total Blackwater M&I 55,487 0.72 4.4 – 1,292 7,821 –

CAPOOSE Indicated 17,671 0.54 22.1 – 308 12,562 – Total M&I 6,659 34,491 1,065

Notes to the Mineral Resource estimates (exclusive of Mineral Reserves) are provided on page 25 of this Annual Report.


INFERRED MINERAL RESOURCE ESTIMATES


Tonnes 000s

Gold g/t

Silver g/t

Copper %

Gold Koz

Silver Koz

Copper Mlbs

NEW AFTON A&B-zones 6,875 0.35 1.3 0.36 77 296 55 C-zone 6,856 0.48 1.5 0.54 106 328 87 HW lens 969 0.69 1.5 0.46 21 45 10 New Afton Inferred 14,702 0.43 1.4 0.45 205 672 145 MESQUITE 4,858 0.37 – – 59 – –

PEAK MINES 2,000 3.14 10.9 1.13 200 690 49

CERRO SAN PEDRO – – – – – – –

RAINY RIVER Direct processing Open pit 10,699 0.84 1.8 – 289 621 – Underground 2,591 4.21 7.8 – 351 646 –Total direct processing 13,290 1.50 3.0 – 640 1,267 – Stockpile Open pit 9,876 0.36 1.1 – 113 339 – Rainy River Inferred 23,166 1.01 2.2 – 753 1,606 –

BLACKWATER Direct processing 10,378 0.80 3.7 – 266 1,235 – Stockpile 2,493 0.33 3.1 – 27 248 – Blackwater Inferred 12,871 0.71 3.6 – 293 1,483 – CAPOOSE 23,591 0.44 26.3 – 334 19,948 – Total Inferred 1,844 24,399 194

Notes to the Inferred Mineral Resource estimates are provided on page 25 of this Annual Report.

Notes to the Inferred Mineral Resource estimates are provided on page 25 of this Annual Report.

EL MORRO PROPERTY MINERAL RESERVES & RESOURCES AS AT DECEMBER 31, 2015

(GOLDCORP 50% – TECK 50% JOINT VENTURE)

METAL GRADE CONTAINED METAL NEW GOLD 4% STREAM INTEREST

Tonnes 000s

Gold g/t

Copper %

Gold Koz

Copper Mlbs

Gold Koz

Mineral ReservesProven 321,814 0.56 0.55 5,820 3,877 233 Probable 277,240 0.35 0.43 3,097 2,626 124 Total P&P 599,054 0.46 0.49 8,917 6,503 357

Mineral Resources

Measured 19,790 0.53 0.51 340 223 14

Indicated 72,563 0.38 0.39 880 630 35

Total M&I 92,353 0.41 0.42 1,220 853 49 Inferred – – – – – –Total Inferred 678,066 0.30 0.35 6,453 5,190 258

EL MORRO MINERAL RESERVES AND RESOURCESThe table below sets out the Mineral Reserve and Mineral Resource estimates, on a 100 percent basis, for the El Morro project, as well as New Gold’s 4 percent stream interest. The El Morro project, together with the Relincho project in Chile, is now held by a 50/50 joint venture between Goldcorp and Teck Resources Limited. The following information is based on information available to the company as of March 28, 2016. See the “General Development of the Business – Developments – Projects and Mines – El Morro Project” section for more information.


MINERAL PROPERTY MINERAL RESERVES

LOWER CUT-OFFMINERAL RESOURCESLOWER CUT-OFF

New Afton Main Zone – B1 Block: C$ 21.00/tMain Zone – B2 Block: C$ 33.00/t All Resources: 0.40% CuEqB3 Block & C-Zone: C$ 24.00/t

Mesquite Oxide & Transitional:

Sulphide:

0.21 g/t Au (0.006 oz/t Au)

0.41 g/t Au (0.012 oz/t Au)

0.12 g/t Au (0.0035 oz/t Au)

0.24 g/t Au (0.007 oz/t Au)

Peak Mines All ore types: A$ 110/t to A$ 156/t A$ 113/t to A$ 150/t

Cerro San Pedro All ore types: US$ 6.00/t n/a

Rainy River O/P direct processing:

O/P stockpile:

U/G direct processing:

0.30–0.60 g/t AuEq

0.30 g/t AuEq

3.50 g/t AuEg

0.30–0.45 g/t AuEq

0.30 g/t AuEq

2.50 g/t AuEg

Blackwater O/P direct processing:

Stockpile:

0.26–0.38 g/t AuEq

0.32 g/t AuEqAll Resources: 0.40 g/t AuEq

NOTES TO MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES1. New Gold’s Mineral Reserves and Resources and the El Morro Mineral Reserves and Resources have been estimated in accordance with the CIM Standards, which are

incorporated by reference in NI 43-101.

2. New Gold’s year end 2015 Mineral Reserves and Mineral Resources have been estimated based on the following metal prices and foreign exchange rate criteria:

3. Year End 2015 El Morro Mineral Reserves and Mineral Resources have been estimated using $1,200/oz gold, $2.75/lb copper and 550 Chilean pesos to one United States dollar, and a lower cut-off of 0.20% CuEq.

4. New Gold reports its Measured and Indicated Mineral Resources exclusive of Mineral Reserves. Measured and Indicated Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Mineral Resources have a greater amount of uncertainty as to their existence, economic and legal feasibility, do not have demonstrated economic viability and are likewise exclusive of Mineral Reserves. Numbers may not add due to rounding.

5. Mineral Resources are classified as Measured, Indicated and Inferred based on relative levels of confidence in their estimation and on technical and economic parameters consistent with the methods most suitable for their potential commercial exploitation. Where different mining and/or processing methods might be applied to different portions of a Mineral Resource, the designators “open pit” and “underground” have been applied to indicate the envisioned mining method. Likewise the designators “oxide”, “non-oxide” and “sulphide” have been applied to indicate the type of mineralization as it relates to the appropriate mineral processing method and expected payable metal recoveries, and the designators “direct processing” and “stockpile” have been applied to differentiate between material envisioned to be mined and processed directly and material to be mined and stored in a stockpile for future processing. Mineral Reserves and Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, and other risks and relevant issues. Additional details regarding Mineral Reserve and Mineral Resource estimation, classification, reporting parameters, key assumptions and associated risks for each of New Gold’s material properties are provided in the respective NI 43-101 Technical Reports, which are available at www.sedar.com.

6. Rainy River project: In addition to the criteria described above, Mineral Reserves and Mineral Resources for the Rainy River project are reported according to the following additional criteria: Underground Mineral Reserves are reported peripheral to and/or below the open pit Mineral Reserve pit shell, which has been designed and optimized based on an $800/oz gold price. Underground Mineral Resources are reported below a larger Mineral Resource pit shell, which has been defined based on a $1,300/oz gold price. Approximately 44 percent (44%) of the gold metal content defined as underground Mineral Reserves is derived from material located between the Mineral Reserve pit shell and the Mineral Resource pit shell; the remaining 56 percent (56%) of the metal content defined as underground Mineral Reserves is derived from material located below the Mineral Resource pit shell. Open pit Mineral Resources exclude material reported as underground Mineral Reserves.

7. All Mineral Resource and Mineral Reserve estimates for New Gold’s properties and projects and for the El Morro project are effective December 31, 2015.

GOLD $/OUNCE

SILVER $/OUNCE

COPPER $/POUND

CAD

AUD

MXN

Mineral Reserves $1,200 $15.00 $2.75 1.25 1.35 17.00Mineral Resources $1,300 $17.00 $3.00 1.25 1.35 17.00

DIRECTORS


David Emerson (1), (3) Corporate Director, Public Policy Advisor

James Estey (1), (2) Corporate Director


Vahan Kololian (3), (4) Managing Partner, TerraNova Partners LP

Martyn Konig (1), (2), (4) Chief Investment Officer, T Wealth Management SA

Pierre Lassonde (2), (3) Chairman, Franco-Nevada Corporation

Kay Priestly (1) Corporate Director

Raymond Threlkeld (4) Corporate Director and Consultant

Board Committees(1) Audit Committee(2) Compensation Committee(3) Corporate Governance and Nominating Committee(4) Health, Safety, Environment and Corporate Social Responsibility Committee

OFFICERS



Brian Penny Executive Vice President and Chief Financial Officer

David Schummer Executive Vice President and Chief Operating Officer

Hannes Portmann Executive Vice President, Business Development

Lisa Damiani Vice President, General Counsel and Corporate Secretary

Brett Gagnon Vice President, Information Technology

John Marshall Vice President, Human Resources

Peter Marshall Vice President, Project Development

Armando Ortega Vice President, Latin America

Barry O’Shea Vice President, Corporate Controller

Mark Petersen Vice President, Exploration

Martin Wallace Vice President, Treasurer

COMPANY INFORMATION

Head Office

Royal Bank Plaza, South Tower

200 Bay Street, Suite 3120, Toronto, ON M5J 2J4

t: +1.416.324.6000 • f: +1.416.324.9494 • tf: +1.888.315.9715

ANNUAL AND SPECIAL MEETING

April 27, 2016 at 4:00 PM (Eastern Time)

St. Andrew’s Club & Conference Centre

150 King Street West, 27th Floor

Toronto, Ontario, Canada

Investor Relations

tf: +1.888.315.9715 • f: +1.416.324.9494 • e: [email protected]

Media Inquiries

t: +1.416.324.6015 • f: +1.416.324.9494 • e: [email protected]

Transfer Agent

Computershare Investor Services Inc.

tf: +1.800.564.6253 (North America)

t: +1.514.982.7555 (International)

f: +1.604.661.9401

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This document contains statements about expected future events and financial and operating performance that are forward looking. 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. Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. Please refer to the Cautionary Notes regarding forward-looking statements on pages 119 to 121 of this Annual Report. All of the forward-looking statements contained in this document are qualified by such 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.

All dollar amounts are expressed in U.S. dollars except where otherwise indicated.

CORPORATE INFORMATIONAs of December 31, 2015

Con

cept

and

Des

ign:

TH

E W

OR

KS

DES

IGN

CO

MM

UN

ICA

TIO

NS

ww

w.w

orks

des

ign.

com


New

Gold 2015 A

nnual Report

HEAD OFFICE

Royal Bank Plaza South Tower200 Bay Street, Suite 3120Toronto, ON M5J 2J4t: +1.416.324.6000f: +1.416.324.9494

INVESTOR RELATIONS

tf: +1.888.315.9715f: +1.416.324.9494e: [email protected]

www.newgold.com

TSX/NYSE MKT:NGD

WHY INVEST IN NEW GOLD?PORTFOLIO OF ASSETS IN TOP-RATED JURISDICTIONS

INVESTED AND EXPERIENCED TEAM

AMONG LOWEST-COST PRODUCERS WITH ESTABLISHED TRACK RECORD

PEER-LEADING GROWTH PIPELINE

A HISTORY OF VALUE CREATION

building values1.q4cdn.com/.../2015/annual/new-gold-annual-report-2015.pdf2015 new gold annual...

Documents