ORONTO--(BUSINESS WIRE)-- February 18, 2021- New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE American: NGD) provides its annual operational outlook for the New Afton Mine, which had been delayed due to the mud-rush incident that occurred on February 2, 2021. The Company is also providing its annual consolidated operational outlook. The operational outlook for the Rainy River Mine was previously issued on February 10, 2021. All amounts are in U.S. dollars unless otherwise indicated.

On February 2, 2021, a tragic mud-rush incident occurred at the New Afton Mine with a contract driller fatally injured. The mud-rush was localized underneath the Lift 1 cave in the isolated recovery zone area, which does not interact with other areas of the mine, including the B3 and C-Zone areas. Underground operations, as well as B3 and C-Zone development, have resumed. Underground mining activities will continue to be safely and sequentially ramped-up as we maintain our focus on the health, safety and wellbeing of our people. Surface operations were not impacted, and the mill facility is currently processing ore from the mine as well as from the surface stockpiles.

“As we continue to ramp-up underground operations at the New Afton Mine, our primary focus will remain on the health, safety and wellbeing of our people. Production will ramp-up throughout the year with first ore extraction from B3 expected in the second quarter. We expect production will be higher in the second half of the year as B3 comes online and contributes an increasing proportion of mill feed,” stated Renaud Adams, President and CEO. “Over the past number of months, the New Afton Mine has been introducing new technologies and expanding its autonomous mining fleet and will continue to leverage technology to further optimize mine and mill performance over the coming years.”

New Afton 2021 Guidance Estimates

The operational outlook for the New Afton Mine assumes that our operations will continue without any significant COVID-19-related interruptions. New Gold continues to maintain preventative measures at all our sites to protect our workforce and communities, and to mitigate the effects of COVID-19 on our operations. Any reduction or suspension of our operations due to COVID-19, could impact our ability to achieve the New Afton 2021 outlook. Please see the Cautionary Notes Regarding Forward-Looking Statements at the end of this news release.

In 2021, the Company will continue to report production on a gold equivalent (“gold eq.”) basis as well as on a per-metal basis. Cash costsand All-in Sustaining Costs (“AISC”) will be reported on a per gold eq. ounce basis. Guidance has been prepared assuming $1,800 per gold ounce, $3.50 per pound of copper and $25 per silver ounce and a foreign exchange rate of 1.28 Canadian dollars to the US dollar.

New Afton Mine 2021 Operational and Cost Guidance

Operational Estimates 2021 Guidance
Gold Produced (ounces) 52,000 – 62,000
Copper Produced (Mlbs) 56 - 66
Gold Eq. Produced (ounces)1 165,000 – 195,000

Cash Costs per gold eq. ounce1,2 $930 - $1,010
All-in Sustaining Costs per gold eq. ounce 1,2 $1,225 - $1,325
Capital Investment & Exploration Expense Estimates
2021 Guidance

Sustaining Capital & Sustaining Leases ($M)2 $40 - $60
Growth Capital ($M)2 $80 - $110
Exploration Expense ($M) ~$12

Gold eq. ounces includes approximately 250,000 to 270,000 ounces of silver
These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures provided by other issuers. For more information on these non-GAAP financial performance measures, refer to the “Non-GAAP Financial Performance Measures” section of this press release.
New Afton Sustainability and ESG

Our key focus areas for New Afton include tailings management, energy reduction plans and Indigenous relations. In 2020, we began construction of our Thickened and Amended Tailings facility ("TAT"), which will support more efficient water management and improve long-term environmental impacts. As part of the Company's climate action plan, New Afton continues to explore options to reduce energy use on site. In 2020, New Afton was able to achieve a reduction in fossil fuel consumption and recently purchased an electric boom truck, two electric haul trucks and one electric scoop. The introduction of these vehicles is an important step in our C-Zone development and greenhouse gas reduction targets. Our relationships with surrounding Indigenous partners remain strong as we actively collaborate to improve the benefits to the surrounding areas based on mine expansion.

New Afton Operational Outlook

The mine plan for the year was adjusted following the tragic mud-rush event that occurred on February 2, 2021. Underground mining activities are safely and sequentially ramping-up as we continue to maintain our focus on the health, safety and wellbeing of our people. The adjusted plan contemplates lower tonnes mined from the recovery level, as mining operations will be limited to remote mucking activities. It is expected that mining on Lift 1, which includes the West cave, East cave and pillar recovery (“Lift 1”), will ramp-up during the first quarter and return to pre-incident mining rates in the second quarter, which is expected to be maintained over the balance of the year. It is expected that the B3 permit will be received in the latter part of the first quarter and ore extraction from the B3 zone will begin during the second quarter and ramp up over the year as more draw points are accessible. As a result of lower tonnes mined during the year, a portion of current surface stockpiles will be processed to supplement mill feed. C-Zone development will continue to be advanced as planned and the project remains on schedule.

Gold eq. production is expected to be slightly lower than the prior year, primarily due to lower tonnes processed and lower grades as stockpiles supplement mill feed during the year, as a result of lower tonnes mined during the year.
Cash costs1 per gold eq. ounce are expected to increase over the prior year as a result of lower production. Operating expense is expected to be between $820 and $900 per gold eq. ounce.
During the year, depreciation and depletion is expected to average between $300 and $380 per gold eq. ounce for the New Afton Mine.
Sustaining capital1 is expected to remain in-line with the prior year, primarily related to B3 mine development and includes approximately $10 million related to delays in capital projects experienced in 2020 and the reclassification of $10 million of deferred growth capital to sustaining capital.
AISC1 are expected to increase as compared to the prior year, primarily due to higher cash costs expected for the year and lower production.
Growth capital1 is expected to be higher than the prior year, in-line with plan, as C-Zone development activities increase and includes approximately $10 million due to delays in capital projects experienced in 2020.
The initial phase of a 10,000-metre exploration drilling program was launched in late 2020 to test the 12-kilometre potential for near surface epithermal and porphyry style mineralization on the Cherry Creek trend, located within three kilometres of the New Afton Mill. The drilling program will continue to be advanced during the year and could be expanded based on results.
2021 New Afton Key Performance Indicators

Key Performance Indicators

2021 Estimates1

Tonnes mined per day

12,250 - 13,000

Tonnes milled per day

14,250 – 14, 550

Gold grade milled (g/t)

0.40 – 0.45

Gold recovery (%)

78 – 80

Copper grade milled (%)

0.65 – 0.70

Copper recovery (%)

75 - 80

B3 Development

~1,350

C-Zone Development

~4,000

These estimates are based on assumptions that, while considered reasonable by the Company as at the date of this press release in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. See Cautionary Note Regarding Forward-Looking Statementsfor more details.
The adjusted mine plan considers an average daily rate of approximately 12,250 to 13,000 tonnes per day and includes mining from Lift 1, recovery level and the B3 zone.

The adjusted mine plan contemplates lower tonnes from the recovery level, which will be limited to remote mucking rather than manual mucking as considered in the original plan. It is expected that mining on the recovery level will average approximately 1,700 tonnes per day for the remainder of the year, approximately half of the original plan of 3,500 tonnes per day, and approximately 10-15% of the total tonnes mined for the year. The recovery level is expected to be fully exhausted in 2022.
It is expected that mining in Lift 1 will ramp up during the first half of the year and return to pre-incident mining rates in the second quarter that will be maintained over the balance of the year. The tonnes mined from Lift 1 represents approximately 60-65% of the total tonnes mined for the year.
It is expected that B3 ore extraction will start during the second quarter and ramp up during the year to reach a more sustainable rate by the fourth quarter. The tonnes mined from B3 represents approximately 20-25% of the total tonnes mined for the year.
The milling rate is expected to be maintained throughout the year at approximately 14,400 tonnes per day, incorporating the current surface stockpiles to supplement the lower tonnes mined.
During 2021, sustaining capital projects will continue to focus on advancing the development of the B3 zone. A total of approximately 1,350 metres of development are planned for the year. Lateral development completed in 2020 is sufficient to support the initiation of cave construction that positions B3 for production beginning in the second quarter of the year. Sustaining capital is expected to be generally consistent throughout the year.
Growth capital for the year is primarily related to the advancement of the C-Zone project, primarily focused on mine development, with a total of approximately 4,000 metres planned for the year, and construction of the TAT facility, with the commissioning of the thickener expected in the fourth quarter. Stabilization work related to the Historic Afton Tailings Facility, as well as the current tailing facilities, will continue during the year. Growth capital is expected to be generally consistent throughout the year.
2021 Consolidated Operational Outlook

The Company is providing its operational outlook for 2021 with company-wide gold eq. production expected to be consistent with the prior year that includes an approximate 22% increase in production from the Rainy River Mine, and lower production from the New Afton Mine. Consolidated cash costs are expected to be in-line with the prior year, with lower cash costs from the Rainy River Mine and higher cash costs from the New Afton Mine. All-in Sustaining Costs (“AISC”)1 are expected to decline primarily due to lower cash costs and sustaining capital requirements at Rainy River. Growth capital is expected to increase over the prior year, primarily related to the New Afton C-Zone project development.

New Gold Consolidated Operational Estimates

In 2021, the Company will continue to report production on a gold eq. basis as well as on a per-metal basis. Cash costsand AISCwill be reported on a per gold eq. ounce basis. Guidance has been prepared assuming $1,800 per gold ounce, $3.50 per pound of copper and $25 per silver ounce and a foreign exchange rate of 1.28 Canadian dollars to the US dollar.

2021 Operational and Cost Guidance

Operational Estimates

Rainy River

New Afton

Consolidated Guidance

Gold Produced (ounces)

270,000 – 290,000

52,000 – 62,000

322,000 – 352,000

Copper Produced (Mlbs)

-

56 - 66

56 - 66

Gold Eq. Produced (ounces)1

275,000 – 295,000

165,000 – 195,000

440,000 – 490,000

Cash Costs per gold eq. ounce1,2

$715 - $795

$930 - $1,010

$810 - $890

Corporate G&A per gold eq. ounce1

-

-

$45 - $55

All-in Sustaining Costs per gold eq. ounce1,2

$1,125 - $1,225

$1,225 - $1,325

$1,230 - $1,330

Capital Investment & Exploration Expense Estimates

Rainy River

New Afton

Consolidated Guidance

Sustaining Capital & Sustaining Leases ($M)2

$95 - $125

$40 - $60

$135 - $185

Growth Capital ($M)2

$10 - $15

$80 - $110

$90 - $125

Exploration Expense ($M)

~$5

~$12

~$17

Gold eq. ounces includes approximately 538,000 to 568,000 ounces of silver at Rainy River and approximately 250,000 to 270,000 ounces of silver at New Afton.
These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures provided by other issuers. For more information on these non-GAAP financial performance measures, refer to the “Non-GAAP Financial Performance Measures” section of this press release. below.
About New Gold Inc.

New Gold is a Canadian-focused intermediate gold mining company with a portfolio of two core producing assets in Canada, the Rainy River and New Afton Mines. The Company also holds an 8% gold stream on the Artemis Gold Blackwater Project located in British Columbia and a 6% equity stake in Artemis. The Company also operates the Cerro San Pedro Mine in Mexico (in reclamation). New Gold's vision is to build a leading diversified intermediate gold company based in Canada that is committed to environment and social responsibility. For further information on the Company, visit www.newgold.com.

Endnote

1. All-in sustaining costs per gold eq. ounce, cash costs per gold ounce and per gold eq. ounce, sustaining capital & sustaining lease and growth capital are non- GAAP financial measures that do not have a standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Refer to the “Non-GAAP Financial Performance Measures” section of this press release below for additional details on these non-GAAP financial performance measures.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this news release, including any information relating to New Gold’s future financial or operating performance is “forward looking”. All statements in this news release, other than statements of historical fact, which address events, results, outcomes or developments that New Gold expects to occur are “forward-looking statements”. Forward-looking statements are statements etc. etc.
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