Gold Production At New Afton Increased By 83%

VANCOUVER - New Gold Inc. produced 91,317 ounces of gold at record-low all-in sustaining costs (1) of $674 per ounce, resulting in strong free cash flow generation.

"Our first quarter results provide us with solid momentum as we look ahead to the remainder of 2014, particularly as we continue to expect our strongest quarters to be in the second half of the year," stated Randall Oliphant, Executive Chairman. In addition to our outstanding operating performance, we made important strides in the advancement of our Rainy River project in Canada. During the quarter we successfully completed our Feasibility Study, advanced our permitting efforts and engaged our EPCM partner," added Oliphant.

Consolidated gold production during the quarter remained consistent with the first quarter of 2013. New Afton's continued strong performance offset the planned quarterly decreases in production at the Peak Mines in Australia, and Cerro San Pedro in Mexico. Consistent with the company's February 6, 2014 guidance, New Gold's consolidated gold production is scheduled to increase steadily through the second half of 2014, with the highest quarterly production of the year planned in the fourth quarter.

Gold production at New Afton increased by 83% when compared to the prior-year quarter. All of the key operational factors driving production, including throughput, grade and recovery, increased during the first quarter enabling New Afton to deliver its highest ever quarterly gold production. Average daily throughput was approximately 12,900 tones, the gold grade processed was 0.86 grams per tone and gold recoveries remained steady at 85%. In the prior-year quarter, New Afton was in the midst of its successful ramp up which saw the mill outperform expectations resulting in the need to process lower grade stockpile ore from the historical Afton open pit. For 2014, New Afton is off to a solid start and remains on track to have another strong year.

Production at Mesquite in Imperial County, California, remained consistent with the first quarter of 2013. The increase in the gold grade of ore placed on the leach pad during both the quarter and in late 2013 offset the planned decrease in ore tones placed in the period. Consistent with the company's 2014 guidance, Mesquite's mine plan early in the year focuses on additional waste stripping to open more ore faces in the pit in the second half of 2014 which, in turn, is expected to provide enhanced operational flexibility and drive higher production as the year progresses.

As anticipated, gold production at the Peak Mines in the first quarter was below that of the particularly strong prior-year quarter. Mill throughput and gold recoveries were both consistent with the prior year; however, gold grade in the first quarter was below that of the prior-year quarter while remaining in line with reserve grade. Through the balance of 2014, the combination of moderate increases in throughput and higher gold grade is scheduled to lead to higher quarterly production.

Consistent with the company's 2014 guidance, Cerro San Pedro's mining activity in the first half of the year is primarily focused on waste stripping to prepare the pit for the final phase of mining. Cerro San Pedro's first quarter production was in line with the company's plans, however, when compared to the same period of the prior year, fewer ore tones were placed on the leach pad, which led to lower production. Cerro San Pedro is scheduled to achieve a marked increase in ore tones placed coupled with higher gold grade in the second half of the year.

Copper production increased by 62% when compared to the first quarter of 2013, driven by a combination of New Afton's record production quarter and the steady contribution from the Peak Mines. New Afton's copper production during the first quarter increased by 86% to 22.0 million pounds. New Afton's record quarterly copper production was a result of throughput, copper grade and copper recovery all increasing when compared to the same period of the prior year when lower grade stockpile ore from the historical Afton open pit was processed. At the Peak Mines, copper production was consistent with the prior-year quarter.

Silver production in the first quarter of 2014 was in line with the same period of the prior year as an increase in silver production at New Afton offset a minor decrease in production at Cerro San Pedro.