(All amounts are in U.S. dollars unless otherwise indicated)

TORONTO, Aug. 4, 2022 /CNW/ - New Gold Inc. ("New Gold" or the "Company") (TSX: NGD) (NYSE: NGD) reports second quarter results for the Company as of June 30, 2022. The Company will host a conference call and webcast today at 8:30 am Eastern Time to discuss the second quarter consolidated results (details are provided at the end of this news release). For detailed information, please refer to the Company's Second Quarter Management's Discussion and Analysis (MD&A) and Financial Statements that are available on the Company's website at www.newgold.com and on SEDAR at www.sedar.com. The Company uses certain non-GAAP financial performance measures throughout this news release. Please refer to the "Non-GAAP Financial Performance Measures" section of this news release and the MD&A for more information. Numbered note references throughout this news release are to endnotes which can be found at the end of this news release.

Consolidated Second Quarter Highlights

Gold equivalent1 ("gold eq.") production for the quarter of 70,514 ounces (52,431 ounces of gold, 7.4 million pounds of copper and 117,318 ounces of silver)
Operating expenses3 of $1,277 per gold eq. ounce
All-in sustaining costs2 of $2,373 per gold eq. ounce, including total cash costs2 of $1,296 per gold eq. ounce
Average realized gold price2 of $1,879 per ounce and average realized copper price2 of $4.14 per pound
Cash generated from operations of $37 million, or $0.05 per share
Cash generated from operations, before changes in non-cash operating working capital2 of $27 million, or $0.04 per share
Net loss of $38 million, or $0.06 per share
Adjusted net loss2 of $17 million, or $0.02 per share
June 30, 2022 cash and cash equivalents of $277 million
During the quarter, the Company provided an update to its 2022 consolidated operational outlook (refer to the Company's July 11, 2022 news release for further information)
During the quarter, the Company successfully completed the previously announced redemption of its outstanding $100 million aggregate principal amount of its 6.375% Senior Notes due 2025 (refer to the Company's May 16, 2022 news release for further information)
"While the operational outlook changes to this year are unfortunate, our teams remained resilient during a challenging quarter and I remain confident that we are positioned to have a stronger second half of the year, and deliver on our updated guidance," stated Renaud Adams, President & CEO. "Heavy rainfall and flooding in the quarter impacted Rainy River's mine plan, but over the last month, we have made tremendous progress on our dewatering efforts and mining at the bottom of the pit has resumed. Our priority for the remainder of the year continues to be on positioning the open pit operations to their optimal conditions. Both of our operations also continue to review optimization opportunities and assess cost reduction initiatives to mitigate against inflationary challenges experienced across the industry. We continue to maintain a very healthy balance sheet while also paying down $100 million of our debt in the quarter, with no additional debt due until 2027. As we move forward and look beyond 2022, both of our operations continue to advance the Company's mid to long-term strategy of increasing production and decreasing costs, leading to free cash flow generation. I strongly believe this strategy remains intact. All while we continue to execute on our drilling programs and assess the potential of our significant remaining Mineral Resource inventory. Finally, we have executed on strategic opportunities to secure our cash position and liquidity profile to enable us to execute on our short-term capital projects allowing us to unlock the maximum value at both assets.

At Rainy River, the objective over the 2022 to 2026 period is to execute a plan that extracts our remaining open pit Mineral Reserves at the lowest cost possible, and ramp-up underground operations as incremental ore to the mill, to maximize free cash flow. Our year-end 2021 open pit Mineral Reserve estimate at Rainy River contained approximately 44 million tonnes of ore at approximately 1 g/t (inclusive of low-grade ore and exclusive of stockpile material) at an attractive strip ratio of 2.32:1 per the latest technical report, which has further been reduced at the end of the second quarter. We are facing the same inflationary pressures felt by our peers and across the industry, but I remain positive on several opportunities available to us. The increase in fuel prices has had the largest impact to Rainy River, and one opportunity to reduce our fuel consumption is to minimize the amount of rehandling required to feed the mill by optimizing the in-pit blending strategy to maximize direct feed which will reduce stockpile movement. Our current technical report included approximately 22 million tonnes of ore to be rehandled during the 2022 to 2026 period. Minimizing this represents a significant opportunity to reduce fuel consumption, and improve grade at the mill, while reducing our carbon footprint. Other consumable prices have also increased, and we continue to evaluate additional opportunities to reduce our consumption. In the pit, we are improving on pumping, haulage conditions and other operational delays, all of which will have a positive impact in the near-term. Sequencing and better timing with mill operations will be key as we execute our near-term plans. Recently, we have experienced additional downtime at the mill, and we are working to address this and reduce our maintenance costs, as we look to increase our milling capacity moving forward. We continue to advance the development of the underground Intrepid zone with mining expected to begin in the fourth quarter. As we ramp-up Intrepid and incorporate other underground mining zones located below the pit over the next five years, our production growth profile at reduced costs remains very attractive with further potential to convert additional underground Mineral Resources to Mineral Reserves.

New Afton has historically proven to be a prolific block cave operation, a low-cost producer, and high free cash flow generator. We are working to return to these results as we near the completion of B3 development and continue to advance the C-Zone. With these new zones in production, we expect to return the asset, from 2024 forward, to years of low sustaining capital and higher grade, leading to increased production at low costs. Like Rainy River, New Afton has also experienced inflationary pressures however, mitigation efforts are underway including the ongoing use of a conveying system and continued efforts in electrifying the mobile fleet. These efforts should contribute significantly in reducing fuel consumption and improving our carbon footprint. Returning the mill to its full capacity should have a significant impact on reducing processing unit costs and we continue to assess further optimization opportunities. Exploration drilling programs continue to advance, with our priority on adding new higher-grade ore, to improve the mine life. There remains a meaningful inventory of Mineral Resources outside of the current mine plan, which could potentially provide further opportunities to enhance New Afton's mine plan," added Mr. Adams.

2022 Updated Operational Outlook
During the quarter, the Company provided an update to its 2022 consolidated operational outlook (refer to the Company's July 11, 2022 news release for further information). All other consolidated and mine site capital investment and exploration estimate guidance, including sustaining capital and sustaining leases and growth capital, remain unchanged.

Consolidated Operational Outlook
Revised Guidance Original Guidance

Gold eq. production (ounces) 1 325,000 - 365,000 380,000 - 440,000
Gold production (ounces) 260,000 - 290,000 295,000 - 335,000
Copper production (Mlbs) 25 - 35 35 - 45
Operating expenses, per gold eq. ounce3 $1,120 - $1,200 $840 - $920
All-in sustaining costs, per gold eq. ounce2 $1,875 - $1,975 $1,470 - $1,570

Rainy River Outlook
Revised Guidance Original Guidance
Gold eq. production (ounces)1 230,000 - 250,000 265,000 - 295,000
Gold production (ounces) 225,000 - 245,000 260,000 - 290,000
Operating expenses, per gold eq. ounce3 $960 - $1,040 $730 - $810

All-in sustaining costs, per gold eq. ounce2 $1,620 - $1,720 $1,270 - $1,370

New Afton Outlook
Revised Guidance Original Guidance
Gold eq. production (ounces)1 95,000 - 115,000 115,000 - 145,000
Gold production (ounces) 35,000 - 45,000 35,000 - 45,000
Copper production (Mlbs) 25 - 35 35 - 45
Operating expenses, per gold eq. ounce3 $1,485 - $1,565 $1,100 - $1,180

All-in sustaining costs, per gold eq. ounce2 $2,210 - $2,310 $1,695 - $1,795

Consolidated Financial Highlights
Q2 2022 Q2 2021 H1 2022 H1 2021

Revenue ($M) 115.7 198.2 290.4 363.1
Operating expenses ($M) 79.8 95.2 175.0 189.1
Net (loss) earnings ($M) (37.9) (15.8) (45.7) 1.0
Net (loss) per share ($) (0.06) (0.02) (0.07) —
Adj. net (loss) earnings ($M)2 (16.7) 26.7 (6.4) 34.8
Adj. net (loss) earnings, per share ($)2 (0.02) 0.04 (0.01) 0.05
Cash generated from operations ($M) 37.4 110.3 105.2 163.7
Cash generated from operations, per share ($) 0.05 0.16 0.15 0.24

Cash generated from operations, before changes in non-cash operating working capital ($M)2 27.4 84.7 93.8 148.5

Cash generated from operations, before changes in non-cash operating working capital, per share ($)2 0.04 0.12 0.14 0.22

Revenue decreased over the prior-year periods due to lower gold and copper sales volume, partially offset by higher realized gold prices. Lower sales in the quarter were impacted by the timing of concentrate shipments at New Afton of approximately 7,500 gold eq.1 ounces which have been deferred to the third quarter, a quarterly impact of approximately $700 and $140 per gold eq. ounce on New Afton and consolidated all-in sustaining costs2.

Operating expenses were lower than the prior-year periods due to lower gold and copper sales volumes.

Net loss increased over the prior-year periods primarily due to lower revenue and a higher loss on revaluation of investments, partially offset by lower operating expenses and a loss on revaluation of the New Afton free cash flow interest obligation in the prior-year periods.

Adjusted net loss2 increased over the prior-year periods primarily due to lower revenues.

Cash generated from operations decreased over the prior-year periods due to lower revenues.
Consolidated Operational Highlights
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