Increased Production At New Gold's Mines 

VANCOUVER, BC - New Gold Inc. reported operational results for the first quarter of 2011, where the company combined increased gold production with the lowest total quarterly cash cost in New Gold's history. The company finished the first quarter with gold sales of 104,211 ounces at a total cash cost per ounce sold, net of by-product sales, of $352 per ounce. The combination of growing gold production, significantly lower total cash cost and continued strength in commodity prices resulted in solid financial results. During the quarter, earnings from mine operations increased by 119% to $80 million, net earnings increased by 85% to $25 million, or $0.06 per share, and cash flow from operations increased by 120% to $51 million.

New Gold also reported production guidance for 2011 with gold production of 380,000 to 400,000 ounces and lower its guidance for total cash cost(1) per ounce sold, net of by-product sales, to $390 to $410 per ounce.

All three of the company's operating mines, Mesquite, in California, Cerro San Pedro, in Mexico and Peak Mines, in Australia, had strong starts to 2011. Collectively, the gold production from the three operations during the quarter was 107,622 ounces at total cash cost per ounce sold, net of by-product sales, of $352 per ounce compared to gold production of 77,215 ounces at $467 per ounce in the first quarter of 2010. While gold production increased at each of the operations, the primary driver of the 39% consolidated quarterly production increase was Cerro San Pedro as the mine had a strong operational quarter compared to the first quarter of 2010 when the mine experienced a delay in the receipt of its annual explosives permit. The company is well positioned as the combination of growing gold production and increasing operating margins lead to further cash flow growth. In addition, New Afton in Canada, the company's most immediate development project, which has the potential to more than double the cash flow of the company, continues to move forward on budget and on schedule with production anticipated in mid-2012. The company's address is 3110-666 Burrard St., Vancouver, BC V6C 2X8, (604)696-4100, fax: (604)696-4110.