(All dollar figures are in US dollars unless otherwise indicated)
TORONTO, April 26, 2017 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces its 2017 first quarter results and provides an update on the construction of the company's Rainy River project.

2017 FIRST QUARTER HIGHLIGHTS

Gold production of 89,327 ounces and copper production of 23.8 million pounds
Operating expense of $605 per gold ounce and $1.21 per copper pound
All-in sustaining costs(1) of $597 per ounce, including total cash costs(2) of $296 per ounce
Lowest all-in sustaining costs since the introduction of the metric in 2012
Lowering 2017 full-year all-in sustaining costs guidance to $760 to $800 per ounce from $825 to $865 per ounce
Cash generated from operations of $77 million, a 25% increase compared to the first quarter
of 2016
Cash generated from operations before changes in non-cash operating working capital(3)
of $69 million, a 12% increase compared to the first quarter of 2016
Net earnings of $38 million, or $0.07 per share
Adjusted net earnings(4) of $9 million, or $0.02 per share
Rainy River project schedule and capital cost estimate remain in line with New Gold's updated plan announced on January 30, 2017
Rainy River project capital expenditures totalled $126 million during the quarter
Enhanced financial flexibility with sale of El Morro stream and equity financing
March 31, 2017 cash and cash equivalents of $350 million


"As we indicated to our stakeholders at the beginning of this year, our priorities are: enhancing our financial flexibility, delivering operationally and executing on our updated Rainy River plan," stated Hannes Portmann, President and Chief Executive Officer. "I am very pleased to report that we have made significant progress in all three areas."

"During the first quarter, we increased our liquidity position by $230 million through our equity financing and the sale of our El Morro stream. At the same time, after a strong start to the year, we have lowered our cost guidance and increased our cash generation potential for the balance of the year. Finally, development activities at Rainy River were advanced with both the timeline and budget remaining consistent with our updated plan announced in late January," added Mr. Portmann.

2017 FIRST QUARTER OPERATIONAL RESULTS

New Gold's first quarter gold production of 89,327 ounces remained in line with 2016 as higher production from the company's Mesquite and Peak Mines partially offset planned lower production from New Afton and Cerro San Pedro. Cerro San Pedro's production decreased as the mine has now transitioned into residual leaching. Quarterly copper production decreased by 6% to 23.8 million pounds when compared to the first quarter of 2016. As expected, silver production of 0.3 million ounces was also below 2016 as Cerro San Pedro transitioned to residual leaching.

First quarter operating expense per gold ounce of $605 remained in line with 2016. The company delivered first quarter all-in sustaining costs of $597 per ounce, including total cash costs of $296 per ounce. All-in sustaining costs decreased by over $160 per ounce relative to the first quarter of 2016, resulting in a record low for the metric. The significant decrease in all-in sustaining costs relative to the prior-year quarter was attributable to a $58 per ounce decrease in total cash costs to $296 per ounce and a $103 per ounce, or $9 million, decrease in the company's consolidated sustaining costs, which include New Gold's cumulative sustaining capital, exploration, general and administrative, and amortization of reclamation expenditures.

With the company's strong operational start to 2017, New Gold reiterates its guidance for full-year gold production of 380,000 to 430,000 ounces. The company is particularly pleased to announce a reduction to full-year all-in sustaining costs. As indicated in late January, New Gold was actively evaluating cost savings opportunities to further enhance 2017 cash flow. Through a combination of the company's business improvement initiatives and capital deferrals, New Gold identified cost savings of approximately $15 million, or approximately $40 per ounce. In addition, the company has also fixed the price for 43.7 million pounds of the company's second half 2017 copper production at $2.73 per pound, which compares favourably to the company's guidance assumption of $2.50 per pound. The copper price benefit will provide an additional $10 million, or approximately $25 per ounce, towards 2017 cash flow. Combining the benefit of these initiatives positions New Gold to reduce its 2017 full-year all-in sustaining costs to $760 to $800 per ounce, representing a $65 per ounce reduction from the company's original guidance range of $825 to $865 per ounce.

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