All dollar figures are in US dollars unless otherwise indicated)

TORONTO, April 27, 2016 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces its 2016 first quarter results and provides an update on the construction of the company's Rainy River project.

2016 FIRST QUARTER HIGHLIGHTS
Gold production of 90,811 ounces and copper production of 25.4 million pounds
All-in sustaining costs(1) of $758 per ounce, including total cash costs(2) of $354 per ounce
Cash generated from operations before changes in non-cash operating working capital(3) of $62 million
Cash generated from operations of $62 million
Adjusted net loss(4) of $nil million, or $nil per share
Net earnings of $27 million, or $0.05 per share
Rainy River construction 30% complete at March 31, 2016 with $82 million in project capital expenditures during the quarter
Construction currently 35% complete
March 31, 2016 cash balance of $298 million


"The year is off to a solid start," stated Randall Oliphant, Executive Chairman. "The significant decrease in our all-in sustaining costs is particularly rewarding as it enabled our company to generate a very robust margin of $448 per ounce in the first quarter."

"In addition, we entered into gold option contracts to increase the certainty of our cash flows for the balance of 2016 as we continue to focus on the development of our Rainy River project. We are well positioned and look forward to an exciting year for our company," added Mr. Oliphant.

2016 FIRST QUARTER OPERATIONAL RESULTS

New Gold's first quarter gold production of 90,811 ounces remained in line with 2015 as slightly higher production from the company's New Afton, Mesquite and Peak mines partially offset planned lower production from Cerro San Pedro. Quarterly copper production increased by 10% to 25.4 million pounds when compared to 2015 as a result of the continued strong operating performance at New Afton stemming from the mine's expanded grinding capacity. Silver production of 0.4 million ounces remained consistent with 2015.

Consolidated first quarter all-in sustaining costs(1) of $758 per ounce decreased by over $270 per ounce relative to the first quarter of 2015. The significant decrease in all-in sustaining costs(1) relative to the prior-year quarter was attributable to the combination of a $132 per ounce decrease in total cash costs(2) to $354 per ounce and a $124 per ounce, or $14 million, decrease in the company's consolidated sustaining costs(1), 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 2016, New Gold is pleased to reiterate its guidance for full-year gold production of 360,000 to 400,000 ounces at all-in sustaining costs(1) of $825 to $865 per ounce, including total cash costs(2) of $435 to $475 per ounce. Driven by expected increases in gold production at Mesquite and the Peak Mines, consolidated quarterly gold production should increase through the third quarter before declining modestly in the fourth quarter.

NEW GOLD SUMMARY OPERATIONAL RESULTS

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