(All dollar figures are in US dollars unless otherwise indicated)
TORONTO, Nov. 15, 2016 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces that the company has received approval to commence construction of the tailings management facility at its Rainy River project, located in northwestern Ontario. Separately, New Gold has entered into hedges to lock in current copper prices for a portion of the company's first half 2017 copper production.

RAINY RIVER TAILINGS MANAGEMENT FACILITY CONSTRUCTION UPDATE
As previously disclosed, during the course of the construction of the water management facility earlier in 2016, New Gold identified areas underlying both the water and tailings management facilities where the strength of the foundation is less than was estimated for the original designs.

In mid-August, the company received approval for its redesign of the water management facility from the Ontario Ministry of Natural Resources and Forestry ("MNRF") and construction activities remain ongoing. The redesign includes flattening of slopes and the addition of rock toe buttresses.

Subsequently, after incorporating all of the results of the company's supplemental geotechnical drilling program and receiving additional input from New Gold's Independent Tailings Review Board ("ITRB"), New Gold submitted the final redesign of the Rainy River tailings management facility for approval by the MNRF. The redesign included the use of flatter slopes across the entire tailings facility as well as the incorporation of wick drains in certain areas.

Yesterday, New Gold received approval from the MNRF to commence construction activities on the Rainy River tailings management facility. The company is positioned to begin working on construction of the facility immediately.

Rainy River's development remains on schedule with first production targeted for mid-2017. Overall, the Rainy River project enhances New Gold's growth pipeline through its significant production scale at below current industry average costs and exciting longer-term exploration potential in a great mining jurisdiction. The company looks forward to continuing the advancement of the Rainy River project.

FINANCIAL UPDATE
Consistent with the gold price option contracts New Gold previously entered into for the first half of 2017, the company decided to hedge a portion of its copper production to increase its cash flow certainty over the remaining Rainy River development period.

On November 14, 2016, New Gold fixed the price for 31.7 million pounds (14,400 tonnes) of the company's first half 2017 copper production at $2.52 per pound ($5,552 per tonne) using swaps settling against the monthly LME average price. The swaps cover 5.3 million pounds of copper (2,400 tonnes) per month from January through June 2017.

On October 4, 2016, New Gold announced that the company entered into gold price option contracts covering 120,000 ounces of New Gold's first half 2017 production. New Gold purchased put options with a strike price of $1,300 per ounce covering 120,000 ounces of gold and simultaneously sold call options with a strike price of $1,400 per ounce covering an equivalent 120,000 ounces. In aggregate, the option contracts provide the company a guaranteed floor price of $1,300 per ounce while also providing exposure to further increases in the gold price up to $1,400 per ounce. The contracts will cover 20,000 ounces of gold per month for six months beginning in January 2017. The net cost of entering into the option contracts was less than $1 million.