. Provides Preliminary Third Quarter Production and Cost Results
(All figures are in US dollars unless otherwise indicated)
VANCOUVER, Oct. 21, 2013 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces that its New Afton Mine has successfully achieved the targeted increase in throughput to 12,000 tonnes per day, from a design capacity of 11,000 tonnes per day, three months ahead of schedule. The combination of the increased throughput, and higher grades and recoveries, resulted in increased production of both gold and copper during the third quarter at New Afton. As the company is hosting an analyst tour to New Afton on October 22, 2013, New Gold today provides preliminary third quarter production and cost results for New Afton as well as the balance of its portfolio of operating mines. The preliminary production and cost information provided reflects approximate figures and may differ slightly from the company's third quarter earnings, which will be announced on October 29, 2013.

New Afton Update

Average mill throughput of 12,396 tonnes per day in September 2013
Represents 13% increase over 11,000 tonne per day design capacity
Average mill throughput of 11,967 tonnes per day during third quarter of 2013
Gold grade continued to reconcile positively against block model
80% increase in gold production to 25,220 ounces from 14,014 ounces in the third quarter of 2012
88% increase in copper production to 20.9 million pounds from 11.1 million pounds
Operation successfully tested over five-day period at rates of 14,000 to 15,500 tonnes per day
Continued positive exploration results at both the C-Zone and East Cave Extension targets
Consolidated 2013 Third Quarter Production and Cost Summary

Lowest cost quarter in the company's history
All-in sustaining costs(1) of $779 per ounce
Total cash costs(2) of $280 per ounce compared to $443 per ounce in the prior year period
Gold production of 94,038 ounces compared to 104,577 ounces in the third quarter of 2012
Copper production increased by 67% to 23.7 million pounds from 14.2 million pounds
Cash and cash equivalents of $429 million at September 30, 2013
"The third quarter saw our company deliver on a number of very important objectives, however, it also brought with it certain challenges," stated Randall Oliphant , Executive Chairman. "The combination of successfully increasing New Afton's throughput and further reducing our costs positions us well going forward. At the same time, we are disappointed that the operational challenges we encountered at Cerro San Pedro and Mesquite have negatively impacted our quarterly and year-to-date production."

New Gold will provide an update on its production and cost outlook for the fourth quarter and full year 2013 as part of its third quarter earnings announcement on October 29, 2013.

New Afton Update

Successfully Achieved Targeted Throughput Increase Ahead of Schedule
New Afton continued to build on its strong first half performance during the quarter. New Afton achieved records in multiple key operational categories during the quarter, including: average daily throughput, gold and copper grades, gold recovery and, most importantly, gold and copper production. At the beginning of 2013, New Gold's objective was to steadily increase the throughput at New Afton beyond the 11,000 tonne per day design capacity, with the goal of averaging 12,000 tonnes per day by the end of the year. Through the dedicated efforts of the New Afton team, the mine reached this goal three months ahead of schedule, averaging 12,396 tonnes per day during the month of September. The combination of this record throughput, robust gold and copper grades, and steady recoveries resulted in continued increases in production of both gold and copper at New Afton. Gold grades were 0.82 grams per tonne, up from 0.67 grams per tonne in the prior year quarter and 0.78 grams per tonne in the second quarter of 2013. Copper grades were 0.98% compared to 0.72% in the prior year quarter and 0.96% in the second quarter of 2013. Recoveries were 87% for gold and 88% for copper, significantly higher than the third quarter of 2012 and consistent with the second quarter of 2013, despite the impact of the higher throughput. New Afton produced 25,220 ounces of gold and 20.9 million pounds of copper during the third quarter of 2013. With year-to-date production of 61,966 ounces of gold and 51.4 million pounds of copper, New Afton remains well on track to achieve its full year 2013 production estimates of 75,000 to 85,000 ounces of gold and 66 to 74 million pounds of copper.

Looking to Unlock Further Value with Additional Throughput Expansion Opportunity
In parallel with reaching the interim target of the 12,000 tonne per day throughput rate, the New Afton team has also been looking at opportunities to further increase the value of the operation by driving towards an even higher throughput level. During the third quarter, over a five-day period, the operation was run at rates between 14,000 and 15,500 tonnes per day to better assess which elements of the mining and milling processes could be further optimized at these higher levels. The underground mining operations performed well at the higher rates and demonstrated an ability to readily move well beyond 12,000 tonnes of ore to surface daily. The combination of 77 completed drawbells and the excess capacity of the crusher and conveyor system provides flexibility for the underground operations to move to a sustainably higher rate. The mill also handled the higher throughput levels, however, as anticipated, grind size increased and a decrease in recovery was seen as the mill moved to progressively higher rates. Currently, the company is evaluating low capital cost alternatives that should enable the mine to yield recoveries from the high 80% to low 90% rate, depending on ore type, when operating at higher throughput levels. Though the trade-offs are still in the process of being considered, this could include the addition of a tower mill for tertiary grinding at the back end of the grinding circuit as well as some additional flotation capacity.

As New Afton generated over 60% of New Gold's earnings from mine operations in the second quarter of 2013, the company believes that looking at low incremental capital cost alternatives to increase the annual production of gold and copper, thus further increasing near-term cash flow, is one of the most compelling strategies to generate value for the benefit of New Gold's shareholders.

After achieving the 12,000 tonne per day target ahead of schedule, New Gold's goal is to now move New Afton toward a sustainable 14,000 tonne per day operation. The company intends to provide a further update on the timeline and estimated capital cost to achieve this objective as part of its annual investor and analyst day in early 2014.

Focused on the Future with Ongoing Exploration
The company's exploration efforts at New Afton continue to focus on two key areas, the East Cave Extension and the C-Zone. The East Cave Extension is an area of mineralization that extends laterally from the main B-Zone reserve and lies beneath the previously mined Afton open pit. In the second half of 2012, the company successfully delineated additional resources in this area to extend New Afton's mine life. In 2013, New Gold's exploration team completed an additional 58 holes totaling 17,775 metres in this area with the goal of, once again, adding to the mineral reserve base. The results of the East Cave drilling program will be incorporated into an updated mineral resource and reserve estimate scheduled for completion at year-end.

The C-Zone resource, which represents the second area of exploration focus, lies immediately down plunge of the main B-Zone reserve currently being mined. The C-Zone mineral resource, summarized below, was last updated on May 1, 2013 and incorporated the results of the 2012 drill program and five holes completed in early 2013.

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