New Gold presented at the 2014 TD Securities Mining Conference in January. The presentation provided an overview of New Gold's portfolio of assets located in top-rated mining jurisdictions, its experienced management team with significant investments in the company, and its track record of low-cost production and organic growth. New Gold also highlighted the potential of its development projects Rainy River and Blackwater to significantly increase annual gold production.
2. Cautionary statements
All m onetary amounts in U.S. dollars unless otherwise stated
Total cash costs shown net of by-product sales unless otherwise stated
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this presentation, including any information relating to New Gold’s future financial or operating performance are “forward looking”. All statements in this
presentation, other than statements of historical fact, that address events or developments that New Gold expects to occur are “forward-looking statements”. Forw ard-looking statements are
statements that are not historical facts and are generally, but not alw ays, identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “antic ipates”, “projects”, “potential”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”,
“would”, “should”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation of such terms. Forward-looking statements in this presentation include, among others, statements
with respect to: guidance for production, cash costs and all-in sustaining costs (and its components); the potential difference between gold pric e and cash and all-in sustaining costs, including
relative to other companies; potential modifications to operations (and the cost of any such modifications) and potential opportunities to increase throughput at New Afton exploration potential and
the results of future exploration activities; expected future mining activities; the expected or potential annual production, expected cash costs and expected development cost of New Gold’s
projects; the estimation of mineral reserves and resources and the realization of such estimates; the results of the Blackwater and Rainy River feasibility studies (including expected costs, mine
life, the expected NPV, IRR associated with each project); the timing of resource and reserve updates and other technic al work or reports; the timing of permitting activities and environmental
assessment processes; targeted timing for commencement of production at Rainy River; the adequacy of capital resources; and expected capital expenditures and exploration expenditures.
All forward-looking statements in this presentation are based on the opinions and estimates of management as of the date such statements are made and are subject to important risk factors and
uncertainties, many of whic h are beyond New Gold’s ability to control or predic t. Material assumptions regarding our forward looking statements are discussed in this presentation, our MD&A’s, our
Annual Information Form and our Technical Reportsfiled at www.sedar.com. In addition to, and subject to, such assumptions discussed in more detail elsew here, the forward-looking statements in
this presentation are also subject to the follow ing assumptions: (1) there being no signification disruptions affecting New Gold’s operations; (2) political and legal developments in jurisdictions
where New Gold operates, or may in the future operate, being consistent with New Gold’s current expectations; (3) the accuracy of New Gold’s current mineral reserve and resource estimates; (4)
the exchange rate between the Canadian dollar, Australian dollar, Chilean Peso and U.S. dollar being approximately consistent with current levels; (5) prices for diesel, natural gas, fuel oil,
electricity and other key supplies being approximately consis tent w ith current levels; (6) labour and materials costs increasing on a basis consistent with New Gold’s current expectations; (7)
permitting and arrangements w ith First Nations and other Aboriginal groups in respect of Rainy River and Blackw ater being consistent with New Gold’s current expectations; (8) all environmental
approvals (including the environmental assessment process for the Blackwater and Rainy River Projects), required permits, licenses and authoriz ations will be obtained from the relevant
governments and other relevant stakeholders w ithin the expected timelines; and (9) the results of the feasibility studies for New Gold’s Rainy River and Blackw ater projects being realized.
Forw ard-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown ris ks, uncertainties and other factors that may cause actual
results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, without limitation:
significant capital requirements; price volatility in the spot and forward markets for commodities; fluctuations in the international currency markets and in the rates of exchange of the currencies of
Canada, the United States, Australia, Mexico and Chile; discrepancies betw een actual and estimated production, betw een actual and estimated reserves and resources and between actual and
estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Mexico and Chile or any other country in which New Gold currently
or may in the future carry on business; taxation; controls, regulations and political or economic developments in the countries in whic h New Gold does or may carry on business; the speculative
nature of mineral exploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary licenses and permits and complying with the
permitting requirements of each jurisdiction in w hich New Gold operates, including, but not limited to: in Canada, obtaining the necessary permits for Blackwater and the Rainy River Gold Project;
in Mexico, w here Cerro San Pedro has a history of ongoing legal challenges related to our environmental authorization (EIS); and in Chile, w here the courts had temporarily suspended the
approval of the environmental permit for El Morro; the lack of certainty with respect to foreign legal systems, which may not be immune from the influence of political pressure, corruption or other
factors that are inconsis tent with the rule of law; the uncertainties inherent to current and future legal challenges New Gold is or may become a party to; diminishing quantities or grades of reserves
and resources; competition; loss of key employees; additional funding requirements; ris ing costs of labour, supplies, fuel and equipment; actual results of current exploration or reclamation
activities; uncertainties inherent to mining economic studies including the Feasibility Studies for Blackwater and Rainy River; changes to New Afton’s mine plan or profitability or o New Gold’s asset
profile that might alter the allocation of tax attributes to Rainy River; changes in project parameters as plans continue to be refined; accidents; labour disputes; defective title to mineral claims or
property or contests over claims to mineral properties; unexpected delays and costs inherent to consulting and accommodating rights of First Nations; and other Aboriginal groups; uncertainties
with respect to obtaining all necessary surface and other land use rights or tenure for Rainy River; risks, uncertainties and unantic ipated delays associated w ith obtaining and maintaining
necessary licenses, permits and authorizations and complying w ith permitting requirements, including those associated w ith the environmental assessment process for Blackwater and Rainy
River. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental events and hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as “Risk
Factors” included in New Gold’s disclosure documents filed on and available at www.sedar.com. Forw ard-looking statements are not guarantees of future performance, and actual results and
future events could materially differ from those anticipated in such statements. All of the forward-looking statements contained in this presentation are qualif ied by these cautionary statements.
New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordancew ith
applicable securities law s. All endnotes can be found at the conclusion of the presentation and should be review ed.
2
3. New Gold investment thesis
Portfolio
of assets
in top-rated
jurisdictions
Invested
and
experienced
team
Among
lowest-cost
producers with
solid track
record
Peer-leading
growth
pipeline
A history
of value
creation
3
4. Portfolio of assets in top-rated jurisdictions
Mining investment – country rankings (1)
#2
Blackwater
New Afton
CANADA
Rainy River
#6
Mesquite
UNITED
STATES
#5
Cerro San Pedro
MEXICO
#3
El Morro
CHILE
#1
Peak Mines
AUSTRALIA
OPERATING
DEVELOPMENT
4
5. Portfolio of assets in top-rated jurisdictions
Growing gold resource base in Canada
GOLD RESERVES (Moz)(1) – 20
• Completion of Rainy River and
Blackwater feasibility studies adds
to reserve base
Moz
0.7 Australia
0.8 Mexico
2.3 USA
• Over 13 million ounces of gold
reserves in Canada
• 29 million ounces of M&I resources
(inclusive of Reserves)
2.9 Chile
13.0 Canada
Canada
=
+66%
5
6. Invested and experienced team
Significantly invested team
EXECUTIVE MANAGEMENT TEAM
Randall Oliphant
Executive Chairman
Robert Gallagher
President & CEO
Brian Penny
Executive VP & CFO
Ernie Mast
VP Operations
BOARD OF DIRECTORS
David Emerson
Former Canadian Cabinet
Minister
James Estey
Former Chairman,
UBS Securities Canada
Robert Gallagher
President & CEO
Vahan Kololian
Founder,
Terra Nova Partners
Martyn Konig
Former Chairman,
European Goldfields
Pierre Lassonde
Chairman,
Franco-Nevada
Randall Oliphant
Executive Chairman
Raymond Threlkeld Mining Consultant
Collectively ~$80 million invested in New Gold
6
7. Among lowest-cost producers with solid track record
Lower costs driving margin expansion
• $150 - $200 per ounce lower all-in
sustaining costs(1) results in incremental
margin(2)
• ~$100 per ounce decrease
in cash costs(3) from 2009 to 2013E
2013 GUIDANCE –
ALL-IN SUSTAINING COSTS ($/OZ)(1)
~$1,100
~$1,050
~$900
• Copper and silver create effective hedge
New Gold
Mid-Tier
Average(4)
Senior Average(5)
7
8. Peer-leading growth pipeline
New Afton moving successfully beyond base case
• Achieved increase to 12,000 tonnes
per day in September 2013
GOLD
PRODUCTION (Koz)
25
22
Q2 2013
Q3 2013
COPPER
• Evaluating low capital cost alternatives to
increase recoveries at higher throughput
• Potential to include:
PRODUCTION (Mlbs)
19
21
• Tower mill for tertiary grinding
• Rougher flotation capacity at front
end of the flotation circuit
12
Q1 2013
• Ran operation at 14,000 to 15,500 tonnes
per day over five day period in August
2013
• Mill was able to process higher
throughput, however a decrease in
recovery was seen
15
Q1 2013
Evaluating Further Throughput Increases
in 2014 and Beyond
Q2 2013
Q3 2013
• Additional cleaner capacity
8
9. Peer-leading growth pipeline
New Afton C-Zone exploration program
Looking Northwest
• Actively exploring for resource growth
• All 2013 exploration to be
incorporated into year-end mineral
reserve and resource update
B Zone
Reserve
MAY 2013 C-ZONE RESOURCE SUMMARY(1)
Measured and
Indicated
Inferred
GOLD
0.3 Moz at
0.77 g/t
0.4 Moz at
0.62 g/t
COPPER
211 Mlbs at
0.77%
301 Mlbs at
0.68%
C Zone
9
10. Peer-leading growth pipeline
Industry leading organic growth profile
Three organic
projects
+900 Koz (1)
El Morro
• Growth projects’ production potential
equivalent to over 2x today’s production
• Blackwater and Rainy River acquisitions
increased shares outstanding by 25% for
potential ~175% increase in production
• Feasibility studies outline cash costs and
all-in sustaining costs well below today’s
industry average for each project
Blackwater
Four current
operations
Rainy River
2013 Gold
Production
Annual Production
Potential of Growth Assets
10
11. Peer-leading growth pipeline
Further establishing Canadian presence
2014 Feasibility Study Highlights – First Nine Years
Rainy River
Average Annual Gold Production
325,000 ounces(3)
Average Total Cash Costs
$613 per ounce(4)
Average All-In Sustaining Costs
$736 per ounce(5)
Gold Reserves(1)
3.8 Moz
• Project close to key infrastructure
Gold M&I
Resources(1)(2)
6.2 Moz
• Targeting first production in 2016
Exploration
Potential
Intrepid Zone/Multiple
Regional Targets
Jurisdiction
Ontario, Canada
• Development capital of $885 million inclusive
of $70 million contingency
After-tax Economics
Gold Price ($/oz)
1,150
1,300
1,450
1,600
($mm)(6)
100
314
520
706
7.1
11.3
14.9
17.8
5% NPV
IRR (%)(6)
• Environmental Assessment to be submitted in
January 2014
• +169 km2 land package with additional
potential
11
12. Peer-leading growth pipeline
Further establishing Canadian presence
2013 Feasibility Study Highlights – First Nine Years
Blackwater
Average Annual Gold Production
485,000 ounces(3)
Average Total Cash Costs
$555 per ounce(4)
Average All-In Sustaining Costs
$685 per ounce(5)
Gold Reserves(1)
Gold M&I
Resources(1)(2)
• Completion of permitting targeted in 2014
8.2 Moz
9.5 Moz
• Significant leverage to higher gold prices
• Development capital of $1,865 million
inclusive of $190 million contingency
Exploration
Potential
Capoose/Multiple
Regional Targets
Jurisdiction
British Columbia, Canada
Pre-tax Economics
Gold Price ($/oz)
1,150
1,300
1,450
1,600
5% NPV ($mm)
402
991
1,582
2,120
IRR (%)
7.8
11.3
14.4
16.8
• Consolidated significant land position –
~1,100 km2
12
13. A history of value creation
Cumulative five year outperformance versus gold price and S&P/TSX Global Gold Index
LAST FIVE YEAR SHARE PRICE PERFORMANCE
New Gold (NYSE)
Gold Price
S&P/TSX Global Gold Index (1)
306%
168%
155%
24% 23%
43%
30% 34%
3% 10%
9% 7%
(14%)
(16%)
2009
2010
2011
2012
(28%)
(52%)
(52%)
2013
(36%)
Since January 2009
13
14. Upcoming Investor Day – February 6, 2014
2013 production and cost results
Updated mineral reserves and resources
2014 guidance (production, cost, capital expenditures)
New Afton mill expansion update/timelines
Development project updates
New Afton C-Zone update
General exploration updates
14
15. New Gold investment thesis
Portfolio
of assets
in top-rated
jurisdictions
Invested
and
experienced
team
Among
lowest-cost
producers with
solid track
record
Peer-leading
growth
pipeline
Establishing the leading
intermediate gold company
Track record
of value
creation
17. Appendix 1
Capitalization and liquidity
•
•
Undrawn Credit
Facility(2)
Liquidity
Position
Two senior unsecured note offerings
during 2012 ($300 million at 7.00%,
$500 million at 6.25%)
•
Cash and
Equivalents (1)
All corporate debt due in 2020
or beyond(3)
Total common shares outstanding of
503 million
$429mm
$100mm
$529mm
1. Cash and equivalents as at Septem
ber 30, 2013.
2. $50 m
illion of total $150 m
illion currently used for Letters of Credit.
3. See Appendix 1 – Sum ary of debt for detailed breakdown of com
m
ponents of debt.
17
18. Appendix 1
Summary of debt
Undrawn Credit
Facility
Senior Unsecured Notes
(April 2012)
Senior Unsecured Notes
(November 2012)
El Morro Funding
Loan
Face Value
$150 million(1)
$300 million
$500 million
$76 million
Maturity
1 year with annual
extensions permitted
April 15, 2020
November 15, 2022
n/a
Interest Rate
See ‘Key features’
7.00%
6.25%
4.58%
Payable
Revolving credit
Semi-annually
Semi-annually
Upon start of
production
Conversion price
n/a
n/a
n/a
n/a
Current trading value
n/a
~103
~97
n/a
Key features
•
•
•
•
•
•
•
•
1. $50 m
illion currently allocated for Letters of Credit.
Normal financial
covenants Interest
Rate
3.00-4.25% over
LIBOR based on
ratios
Standby fee of 0.751.06%
•
Senior unsecured
Redeemable after April 15,
2016 at 103.5% down to
100% of face after 2018
Unlimited dividends if
leverage ratio below 2:1
•
Senior unsecured
Redeemable after
November 15, 2017 at par
plus half coupon, declining
ratably to par
Unlimited dividends if
leverage ratio below 2:1
New Gold to
repay Goldcorp
out of 80% of its
30% share of
cash flow once
El Morro starts
production
18
19. Appendix 2
2013 third quarter highlights
• Gold production – 94,038 ounces
• Total cash costs(1) – $280 per ounce sold
• All-in sustaining costs(2) – $779 per ounce
• New Afton achieved targeted increase in
throughput three months ahead of schedule
• Adjusted earnings per share (3) – $0.04/share
Lowest cost
quarter in
company’s history
• Adjusted net cash generated from
operations (4) – $54 million
• Completed Rainy River acquisition(5)
• Cash and cash equivalents of $429 million
1.
2.
3.
4.
5.
Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”.
Refer to Endnote on adjusted net earnings under the heading “Non-GAAP Measures”.
Refer to Endnote on adjusted net cash generated from operations under the heading “Non-GAAP Measures”.
97.5% of Rainy River was acquired in Q3, with the rem
aining 2.5% acquired in Q4.
19
20. Appendix 2
2013 mine-by-mine operating results
2013 THIRD QUARTER
Gold sales
(000s ounces)
costs (1)
Cash
($/oz)
NINE MONTHS ENDED SEPT 30, 2013
All-in Sustaining
costs (2) ($/oz)
Gold sales
(000s ounces)
Cash costs (1)
($/oz)
All-in Sustaining
costs (2) ($/oz)
New Afton
25
($1,310)
($365)
62
($1,104)
($191)
Cerro San Pedro
24
$723
$771
81
$605
$674
Mesquite
21
$1,017
$1,098
72
$936
$1,162
Peak Mines
24
$856
$1,332
77
$874
$1,405
94
$280
$779
291
$399
$905
2013 THIRD QUARTER
NINE MONTHS ENDED
SEPT 30, 2013
New Afton co-product cash costs(1)
Gold ($/oz)
$454
$526
Copper ($/lb)
$1.05
$1.24
1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”.
20
21. Appendix 2
Consolidated financial summary
2013 THIRD QUARTER
2012 THIRD QUARTER
$196
$196
Earnings from mine operations ($ million)
$51
$77
Net earnings ($ million)
$12
$18
$0.02
$0.04
$20
$43
$0.04
$0.09
$54
$47
$1,359
$1,560
Copper ($/lb)
$3.25
$3.69
Silver ($/oz)
$21.31
$30.09
Revenue ($ million)
Net earnings per share ($/share)
Adjusted net earnings(1) ($ million)
Adjusted net earnings per share(1) ($/share)
Adjusted net cash generated from operations (2) ($ million)
Average realized prices
Gold ($/oz)
1. Refer to Endnote on adjusted net earnings under the heading “Non-GAAP Measures”.
2. Refer to Endnote on adjusted net cash generated from operations under the heading “Non-GAAP Measures”.
21
22. Appendix 2
2013 estimated all-in sustaining costs
Total cash costs (1)
~$375/oz
General and administrative
~$70/oz
Exploration expense
~$80/oz
Sustaining capital(2)
~$375/oz
ALL-IN SUSTAINING COSTS(3)
1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
2. Sustaining capital based on New Gold’s total 2013 estim
ated capital expenditures excluding expenditures related to growth-related initiatives.
3. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”.
~$900/oz
22
23. Appendix 2
Lower costs driving margin expansion
New Gold offers shareholders potential for over $400 per ounce(1) of incremental margin
$782(4)
$800
$738
Total Cash Costs (US$/oz)(2)
$643
$600
$557
$478
Incremental Margin to New Gold
Shareholders
$465
$446
$400
$421
$418
$375
$200
2009
1.
2.
3.
4.
2010
2011
Calculated based on H1’2013 GFMS industry average cash costs less New Gold 2013 cash cost guidance. Assum no change to industry average cash costs for rem
es
ainder of 2013.
Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
Industry data per GFMS reports calculated net of by-product credits as at various year-ends
Industry data per GFMS reports calculated net of by-product credits at H1’2013.
2012
2013E
23
24. Appendix 3
El Morro (30%)
2.9 Moz
Gold Reserve(1)
2.1 Blbs
Copper Reserve(1)
•
Goldcorp – 70% partner and project operator
• New Gold’s 30% share of capital fully
funded by Goldcorp
Location
Chile
Mine type
Open Pit
Reserves (1) – Gold/Copper (Moz/Mlbs)
2.9/2,097
Resources (1) – Gold/Copper (Moz/Mlbs)
2.9/2,097
Estimate mine life
17 years
LOM production/yr (Au Koz/Cu Mlbs)
90/85
LOM cash costs/oz by-product(2)
($700)
•
Current resource entirely within La Fortuna
deposit
• Neighbouring El Morro deposit
underexplored
•
2012 year end update added 0.4 million
ounces of gold and 229 million pounds of
copper to reserves (1)
•
Evaluating various alternatives for a power
source to northern Chilean development
projects
1. New Gold’s attributable 30% share. Refer to Appendix 7 for detailed disclosure on reserve and resource calculations.
2. Refer to Endnote on total cash cost under the heading “Non-GAAP Measures”. Life of m
ine co-product costs estim
ated at $550/oz gold and $1.45/lb copper at com odity price assum
m
ptions of $1,200/oz gold and $2.75/lb copper.
24
25. Appendix 3
El Morro (30%) – Funding structure(1)
Total Capital
100%
~ $3.9 billion
30%
100% Average
annual
cash flow
70%
Funded by
$1.2 billion
interest at 4.58%
~ $2.7 billion
30%
20%
70%
80%
Carried funding repayment
• New Gold’s 30% share of development capital 100% carried
• Interest fixed at 4.58%
1. Capital estim
ates based on Decem
ber 2011 Feasibility Study.
25
26. Appendix 4
Reserves and resources summary
Mineral Reserves and Resources Summary
2012
Gold
Koz
Proven and Probable Reserves
Measured and Indicated Resources (inclusive of Reserves)
Inferred Resources
M&I Resources (inclusive of Reserves)
Mesquite
Cerro San Pedro
Peak Mines
New Afton
Blackwater
Capoose
Rainy River
El Morro
Total M&I
19,695
29,311
5,315
5,684
1,703
880
2,224
9,497
196
6,236
2,891
29,311
(1)(2)
2011
Silver
Koz
Copper
Mlbs
Gold
Koz
101,466
160,882
83,093
3,282
4,223
1,187
7,863
18,797
6,323
-
146
1,980
2,097
4,223
5,534
1,812
948
1,742
5,423
384
n/a
2,954
18,797
57,980
1,350
7,292
70,128
9,497
14,635
160,882
(3)
Silver
Koz
Copper
Mlbs
34,347
115,268
76,856
2,888
3,946
2,202
-
167
1,586
n/a
2,193
3,946
55,860
1,570
5,470
25,774
26,594
n/a
115,268
1. For additional inform
ation regarding reserve and resource estim
ates; refer to: New Gold’s “Annual Inform
ation Form for the Financial Year Ended Decem
ber 31, 2012” dated March 27, 2013; news release dated April 4, 2013 “New Gold Announces Increased
Gold Resources at Blackwater Project”; news release dated May 1, 2013 “New Gold Announces 2013 First Quarter Results – Increases Gold and Copper Resources at New Afton C-Zone by Over 300 Percent”; news release dated July 31, 2013 “New Gold
Second Quarter Delivers Increased Production at Lower Costs - Second Half of 2013 Rem
ains on Track to Provide Strong Finish to the Year”; news release dated Decem
ber 12, 2013 “New Gold Announces Blackwater Feasibility Study Results and news
”
release dated January 16, 2014 “New Gold Announces its Rainy River Feasibility Study Results”.
2. All reserves and resources are effective Decem
ber 31, 2012 except Blackwater which is effective Decem
ber 2, 2013, New Afton C-Zone which is effective April 10, 2013 and Rainy River which is effective Novem
ber 2, 2013.
26
3. All reserves and resources are effective Decem
ber 31, 2011.
27. Appendix 4
Reserves and resources summary (cont’d)
2012 Mineral Reserve Statement(1)
Metal grade
Tonnes
000s
Gold
g/t
Contained metal
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
Mesquite
Proven
13,140
0.68
-
-
287
-
-
114,409
127,549
0.56
0.57
-
-
2,055
2,342
-
-
Proven
21,100
0.52
17.1
-
353
11,600
-
Probable
CSP P&P
26,400
47,500
0.48
0.50
17.4
17.3
-
407
760
14,800
26,400
-
Proven
Probable
2,109
2,118
5.89
3.82
7.5
6.8
1.08
1.18
399
260
510
466
50
55
Peak P&P
New Afton
Proven
Probable
New Afton P&P
4,227
4.85
7.2
1.13
659
976
105
52,500
0.65
2.3
0.93
1,100
3,880
1,080
52,500
0.65
2.3
0.93
1,100
3,880
1,080
Probable
Mesquite P&P
Cerro San Pedro
Peak Mines
1. All reserves and resources are effective Decem
ber 31, 2012 except Blackwater which is effective Decem
ber 2, 2013, New Afton C -Zone which is effective April 10, 2013 and Rainy River which is effective Novem
ber 2, 2013.
27
28. Appendix 4
Reserves and resources summary (cont’d)
2012 Mineral Reserves Statement(1)
Metal grade
Tonnes
000s
Gold
g/t
Contained metal
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
Blackwater
Direct processing material
Proven
Probable
124,500
169,700
0.95
0.68
5.5
4.1
-
3,790
3,730
22,100
22,300
-
P&P (direct processing)
294,300
0.79
4.7
-
7,510
44,400
-
Proven
Probable
20,100
30,100
0.50
0.34
-
330
330
50,200
0.40
-
650
344,400
0.74
-
8,170
2,300
14,100
16,400
60,800
-
P&P (stockpile)
3.6
14.6
10.2
5.5
22,681
81,594
104,275
1.14
1.12
1.12
1.88
3.06
2.80
-
2,943
1,370
8,040
9,410
-
307,949
335,152
643,101
0.57
0.37
0.47
-
0.56
0.44
0.49
Stockpile material
Total Blackwater P&P
Rainy River
Proven
Probable
Rainy River P&P
El Morro
Proven
Probable
El Morro P&P
Total Proven
Total Probable
Total P&P
830
3,773
100% Basis
-
30% Basis
1,705
1,186
2,891
7,694
12,011
19,695
37,880
63,586
101,466
1. All reserves and resources are effective Decem
ber 31, 2012 except Blackwater which is effective Decem
ber 2, 2013, New Afton C -Zone which is effective April 10, 2013 and Rainy River which is effective Novem
ber 2, 2013.
1,135
962
2,097
1,185
2,097
3,282
28
29. Appendix 4
Reserves and resources summary (cont’d)
2012 Measured and Indicated Mineral Resource Statement (inclusive of Reserves)(1)
Metal grade
Tonnes
000s
Gold
g/t
Contained metal
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
Mesquite
Measured - oxide
Indicated - oxide
Meqsuite M&I - oxide
Measured - non oxide
19,100
274,100
293,200
4,900
0.51
0.38
0.39
0.88
-
-
313
3,349
3,662
139
-
-
Indicated - non oxide
96,000
0.61
-
-
1,883
-
-
Mesquite M&I - non oxide
100,900
0.62
-
-
2,022
-
-
Total Mesquite M&I
Cerro San Pedro
Measured - oxide
Indicated - oxide
CSP M&I - oxide
Measured - sulphide
Indicated - sulphide
CSP M&I - sulphide
Total CSP M&I
Peak Mines
Measured
Indicated
Peak M&I
New Afton
A&B Zones
Measured
Indicated
A&B Zone M&I
C-Zone
Measured
Indicated
C-Zone M&I
Total New Afton M&I
394,100
0.45
-
-
5,684
-
-
27,100
49,000
76,100
15,200
60,400
75,600
151,700
0.34
0.24
0.28
0.47
0.41
0.42
0.35
15.0
13.0
13.7
11.9
9.6
10.1
11.9
-
303
380
683
229
791
1,020
1,703
13,100
20,480
33,580
5,800
18,600
24,400
57,980
-
2,700
3,200
5,900
5.74
3.75
4.66
7.5
6.8
7.1
1.05
1.19
1.13
494
386
880
647
703
1,350
62
84
146
33,500
45,900
79,400
0.86
0.67
0.75
2.9
2.4
2.6
1.18
0.89
1.01
929
984
1,913
3,160
3,530
6,690
873
896
1,769
1,282
11,205
12,486
91,886
0.75
0.78
0.77
0.75
1.4
1.5
1.5
2.6
0.79
0.77
0.77
1.00
31
280
311
2,224
56
548
602
7,292
22
189
211
1,980
1. All reserves and resources are effective Decem
ber 31, 2012 except Blackwater which is effective Decem
ber 2, 2013, New Afton C -Zone which is effective April 10, 2013 and Rainy River which is effective Novem
ber 2, 2013.
29
30. Appendix 4
Reserves and resources summary (cont’d)
2012 Measured and Indicated Mineral Resource Statement (inclusive of Reserves)
Metal grade
Tonnes
000s
Blackwater
Direct processing material
Measured
Indicated
M&I (direct processing)
Stockpile material
Measured
Indicated
M&I (stockpile)
Total Blackwater M&I
Capoose
Indicated
Gold
g/t
(1)
Contained metal
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
116,955
189,044
305,999
1.04
0.78
0.88
5.6
6.0
5.8
-
3,896
4,729
8,624
21,057
36,467
57,524
-
26,521
64,382
90,903
396,902
0.30
0.30
0.30
0.74
4.1
4.4
4.3
5.5
-
256
617
873
9,497
3,496
9,108
12,604
70,128
-
14,200
0.43
20.8
-
196
9,497
-
Measured
26,665
1.21
1.79
-
1,035
1,531
-
Indicated
150,696
1.07
2.70
-
5,202
13,104
-
Total Rainy River M&I
177,361
1.09
2.57
-
6,236
14,635
-
Rainy River
El Morro
Measured
Indicated
El Morro M&I
Total Measured
Total Indicated
Total M&I
100% Basis
307,949
335,152
643,101
0.57
0.37
0.47
30% Basis
-
0.56
0.44
0.49
1,705
1,186
2,891
9,330
19,983
29,311
48,847
112,037
160,882
1. All reserves and resources are effective Decem
ber 31, 2012 except Blackwater which is effective Decem
ber 2, 2013, New Afton C -Zone which is effective April 10, 2013 and Rainy River which is effective Novem
ber 2, 2013.
1,135
962
2,097
2,092
2,131
4,223
30
31. Appendix 4
Reserves and resources summary (cont’d)
2012 Inferred Resource Statement(1)
Metal grade
Tonnes
000s
Gold
g/t
Contained metal
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
Mesquite
Oxide
35,200
0.33
-
-
373
-
-
Non oxide
15,700
0.55
-
-
278
-
-
Mesquite Inferred
50,900
0.40
-
-
651
-
-
Oxides
53,400
0.17
9.0
-
300
15,400
-
Sulphides
50,500
0.34
8.5
-
550
13,800
-
103,900
0.25
8.8
-
850
29,200
-
1,700
2.64
4.8
1.13
144
261
42
A&B-Zone
14,900
0.45
2.0
0.65
216
940
212
C-Zone
20,221
0.62
1.4
0.68
401
923
301
New Afton Inferred
35,121
0.56
1.5
0.68
617
1,863
513
13,815
0.76
4.1
-
337
1,821
-
Cerro San Pedro
CSP Inferred
Peak Mines
New Afton
Blackwater
Direct processing
Stockpile
3,785
0.31
3.6
-
38
438
-
Blackwater Inferred
17,600
0.66
4.0
-
375
2,263
-
Capoose
64,070
0.29
23.2
-
595
47,789
-
Rainy River
20,655
1.16
2.58
-
773
1,717
-
100% Basis
El Morro
Total Inferred
137,555
0.99
30% Basis
-
0.70
1,310
-
632
5,315
83,093
1,187
1. All reserves and resources are effective Decem
ber 31, 2012 except Blackwater which is effective Decem
ber 2, 2013, New Afton C -Zone which is effective April 10, 2013 and Rainy River which is effective Novem
ber 2, 2013.
31
32. Appendix 4
Reserves and resources notes
Mineral reserves are contained w ithin Measured and Indicated mineral resources. Measured and Indicated mineral resources that are not mineral reserves do not have demonstrated economic
viability as defined by a technical Feasibility Study. New Gold reports its Measured and Indicated mineral resources inclusiv e of its mineral reserves. Inferred mineral resources are not know n
w ith the same degree of certainty as Measured and Indicated resources, do not have demonstrated economic viability, and are exclusive of mineral reserves. Mineral reserves have been
estimated and reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (‘CIM’) definition standards and guidelines and Canadian National Instrument 43-101
(‘NI 43-101’).
1) Mineral Reserves for the company’s mineral properties have been calculated based on the follow ing metal prices and low er cut-off criteria:
Mineral Property
Gold
(US$/oz)
Silver
(US$/oz)
Copper
(US$/lb)
Low er Cut-off
Mesquite
$1,300
-
-
0.21 g/t Au – Oxide reserves
0.41 g/t Au – Non-oxide reserves
Cerro San Pedro
$1,300
$24.00
-
US$4.33 /t NSR
Peak Mines
$1,300
$24.00
$3.00
A$120 – 253/t NSR
New Afton
$1,300
-
$3.00
US$24/t NSR
El Morro
$1,350
-
$3.00
0.20% CuEq
Blackw ater
$1,300
$22.00
-
0.26 – 0.38 g/t AuEq
Rainy River
$1,250
$25.00
-
0.30 g/t AuEq – Open Pit
3.5 g/t AuEq - Underground
32
33. Appendix 4
Reserves and resources notes (cont’d)
2) Mineral Resources for the company’s mineral properties have been calculated based on the follow ing metal prices and low er cut-off criteria:
Mineral Property
Gold
(US$/oz)
Silver
(US$/oz)
Copper
(US$/lb)
Low er Cut-off
Mesquite
$1,400
-
-
0.12 g/t Au – Oxide resources
0.24 g/t Au – Non-oxide resources
Cerro San Pedro
$1,400
$28.00
-
0.1g/t AuEq – Open pit oxide resources
0.4g/t AuEq – Open pit sulphide resources
Peak Mines
$1,400
$28.00
$3.25
A$97 - 137/t NSR
New Afton
$1,400
$28.00
$3.25
0.40% CuEq – All resources
El Morro
$1,500
-
$3.50
0.15% Cu – Open pit resources
0.20% Cu – Underground resources
Blackw ater
$1,400
$28.00
-
0.40 g/t AuEq
Capoose
$1,400
-
-
0.40 g/t AuEq
Rainy River
$1,100
$22.50
-
0.35 g/t AuEq – Open Pit
2.5 g/t AuEq – Underground
Mineral resources have been estimated and reported in accordance with CIM definition standards and guidelines and Canadian NI 43-101.
3) Mineral resources are classif ied as Measured, Indicated and Inf erred resources and are reported based on technical and economic parameters consistent with the methods most suitable f or their potential commercial
exploitation. Where dif f erent mining and/or processing methods might be applied to dif f erent portions of a mineral resource, the designators ‘open pit’ and ‘underground’ hav e been applied to indicate env isioned mining
method. Likewise the designators ‘oxide’, ‘non-oxide’ and ‘sulphide’ hav e been applied to indicate the ty pe of mineralization as it relates to appropriate mineral processing method and expect ed pay able metal recov eries.
Additional details regarding mineral resource estimation, classif ication and reporting parameters f or each of New Gold’s mineral properties are prov ided in the respectiv e NI 43-101 Technical Reports which are av ailable
on SEDAR.
4) Blackwater April 4, 2013 update:
1. Mineral resources are reported as at March 31, 2013 within a conceptual open pit shell based on metal prices of $1,400/oz gold and $28.00/oz silv er. The March 2013 mineral resource est imate utilizes av erage
metallurgical recov eries of 88.0% gold and 64.0% silv er f or oxide mineralization, 85.0% gold and 58.0% silv er f or transitional oxide/sulf ide mineralization and 85.0% gold and 44.0% silv er f or sulf ide mineralization. The
2012 y ear-end mineral resource estimate utilizes av erage metallurgical recov eries of 86% gold and 44.9% silv er f or all material ty pes.
2. Total contained metal is calculated based on Tonnes*Grade / 31.10348 grams per troy ounce.
3. Gold-equiv alent cut-of f grade estimates are based on $1,400/oz gold and $28.00/oz silv er and av erage metal recov eries as described in Note 1 abov e.
4. Direct processing material is def ined as mineralization abov e a 0.40 g/t AuEq cut-of f and likely to be mined and processed directly .
5. Stockpile material is def ined as mineralization between a 0.30 g/t AuEq and a 0.40 AuEq cut-of f that is suitable f or stockpiling and f uture processing based on av erage metallurgical recov eries as described in Note 1
abov e.
5) Qualif ied Person: The preparation of New Gold’s mineral reserv e and resource statements has been done by or under the superv ision of Qualif ied Persons as def ined under Canadian NI 43-101 and they were rev iewed
and approv ed by Mark Petersen, a Qualif ied Person under NI 43-101 and an of f icer of New Gold.
6) For additional inf ormation regarding reserv e and resource estimates, ref er to: New Gold’s “Annual Inf ormation Form f or the Financial Y ear Ended December 31, 2012” dated March 27, 2013; news release dated April 4,
2013 “New Gold Announces Increased Gold Resources at Blackwater Project”; news release dated May 1, 2013 “New Gold Announces 2013 First Quarter Results – Increases Gold and Copper Resources at New Af ton
C-Zone by Ov er 300 Percent”; news release dated July 31, 2013 “New Gold Second Quarter Deliv ers Increased Production at Lower Costs - Second Half of 2013 Remains on Track to Prov ide Strong Finish to the
Y ear”, news release dated December 12, 2013 “New Gold Announces Blackwater Feasibility Study ” and news release dated January 16, 2014 “New Gold Announc es its Rainy Riv er Feasibility Study Results”.
33
34. Appendix 5
Commodity price/foreign exchange assumptions
Guidance assumptions(1)
2013
Gold price ($/oz)
~1,300
Silver price ($/oz)
~20.00
Copper price ($/oz)
~3.25
USD/AUD
1.00
USD/CAD
1.00
USD/MXN
13.00
Spot:
Spot
Gold price ($/oz)
1,250
Silver price ($/oz)
20.35
Copper price ($/oz)
3.30
USD/AUD
0.90
USD/CAD
0.92
USD/MXN
13.05
1. Based on year-to-date average realized prices through Septem
ber 30, 2013 and assum
ptions for the fourth quarter of 2013: Gold - $1,300 per ounce; Copper - $3.25 per pound; Silver - $20.00 per ounce; AUD/USD and CDN/USD parity.
34
35. Notes
Page 4
1. Rankings based on 25 countries evaluated in 2013 Behre Dolbear Report – 2013 Ranking of Countries for Mining Investment: “Where Not to Invest”.
Page 5
1. Refer to Appendix 4 for detailed breakdow n of reserves and resources and information related to reserve and resource estimate
s.
Page 7
1. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”.
2. Based on comparison w ith costs published by issuers listed in notes 4 and 5. The manner in w hich costs are determined may va from one issuer to another.
ry
3. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
4. Mid-tier average includes: Alamos, Eldorado, Agnico Eagle, Aurico and IAMGOLD. The manner in w hich costs are determined may vary from one issuer to another.
5. Senior average includes: Barrick, Goldcorp, Kinross and New mont. The manner in w hich costs are determined may vary from one issuer t o another.
Page 9
1. Refer to Appendix 4 for detailed disclosure on Reserve and Resource calculations and information related to reserve and resource estimates.
Page 10
1. Based on ~325Koz from Rainy River, ~485Koz from Blackw ater and ~90Koz from El Morro as outlined in the feasibility studies fo the projects.
r
Page 11
1. Refer to Appendix 4 for detailed disclosure on Reserve and Resource calculations.
2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of Measured, Indicated and InferredResources” and “Technical Information”.
Measured and Indicated Resources are inclusive of Reserves. At Rainy River, the 6.2 million ounces of Resources referred to above includes 1.0 million ounces of material
to be stockpiled w hich has been classified as Measured and Indicated Resource.
3. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
4. Rainy River production and cash costs based on April 2013 Feasibility Study.
5. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”.
6. Assumes 10% Ontario mining taxes on income, 2.7% Ontario corporate minimum tax and 15% federal tax on income and assumes dist ibution of tax attributes as betw een
r
Rainy River, New Afton and New Gold’s other operations in a manner that first maximizes New Afton’s life of mine cash flow generation based on the current New Afton
mine plan. For further details refer to the press release entitled “New Gold Announces its Rainy River Feasibility Study Resu dated January 16, 2014.
lts”
Page 12
1. Refer to Appendix 4 for detailed disclosure on Reserve and Resource calculations.
2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of Measured, Indicated and InferredResources” and “Technical Information”.
Measured and Indicated Resources are inclusive of Reserves. At Blackw ater, the 9.5 million ounces of Resources referred to above includes 0.9 million ounces of material
to be stockpiled w hich has been classified as Measured and Indicated Resource.
3. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
4. Blackw ater production and cash costs based on December 2013 Feasibility Study.
5. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”.
Page 13
1. S&P/TSX Global Gold Index includes 37 gold companies in various stages of development/production.
35
36. Endnotes
CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES
Information concerning the properties and operations of New Gold has been prepared in accordance with Canadian standards under applicable Canadian securities laws, and may not be
comparable to similar information for United States companies. The terms “Mineral Resource”, “Measured Mineral Resource”, “In dicated Mineral Resource” and “Inferred Mineral Resource”
used in this presentation are Canadian mining terms as defined in accordance with National Instrument 43 -101 (“NI 43-101”) under guidelines set out in the Canadian Institute of Mining,
Metallurgy and Petroleum (“CIM”) Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council on November 2 7, 2010. While the terms “Mineral Resource”,
“Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” are recognized and required by Canadian securities regulations, they are not defined terms
under standards of the United States Securities and Exchange Commission. Under United States standards, mineralization may no t be classified as a “Reserve” unless the determination has
been made that the mineralization could be economically and legally produced or extracted at the time the Reserve calculation is made. As such, certain information contained in this
presentation concerning descriptions of mineralization and resources under Canadian standards is not comparable to similar in formation made public by United States companies subject to
the reporting and disclosure requirements of the United States Securities and Exchange Commission. An “Inferred Mineral Resou rce” has a great amount of uncertainty as to its existence
and as to its economic and legal feasibility. It cannot be assumed that all or any part of an “Inferred Mineral Resource” wil l ever be upgraded to a higher category. Under Canadian rules,
estimates of Inferred Mineral Resources may not form the basis of feasibility or pre -feasibility studies. Readers are cautioned not to assume that all or any part of Measured or Indicated
Resources will ever be converted into Mineral Reserves. Readers are also cautioned not to assume that all or any part of an “Inferred Mineral Resource” exists, or is economically or legally
mineable. In addition, the definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” under CIM standards diffe r in certain respects from the standards of the United States
Securities and Exchange Commission.
TECHNICAL INFORMATION
The scientific and technical information in this presentation has been reviewed and approved by Mark Petersen, a Qualified Person under National Instrument 43 -101 and officer of New Gold.
Mineral Reserves and Mineral Resources
The estimates of Mineral Reserves and Mineral Resources discussed in this presentation may be materially affected by environmenta l, permitting, legal, title, taxation, sociopolitical, marketing
and other relevant issues. Further details regarding Mineral Reserve and Resource estimates, including classifications, key assumptions and parameters used in such estimates and other
related information for each of New Gold's mineral properties are provided in the respective NI 43 -101 Technical Reports, which are available at www.sedar.com.
36
37. Endnotes continued
NON-GAAP MEASURES
TOTAL CASH COSTS
“Total cash costs” per ounce figures are non-GAAP measures which are calculated in accordance with a standard developed by The G old Institute, a worldwide association of suppliers of
gold and gold products included leading North American gold producers which ceased operations in 2002. Adoption of the standard is voluntary and the cost measures presented may not be
comparable to other similarly titled measures of other companies. New Gold reports total cash costs on a sales basis. Total c ash costs include mine site operating costs such as mining,
processing, administration, royalties and production taxes, but are exclusive of amortization, reclamation, capital and explo ration costs. Total cash costs are reduced by any by-product
revenue and is then divided by ounces sold to arrive at the total by-product cash cost of sales. The measure, along with sales, is considered to be a key indicator of a company’s ability to
generate operating earnings and cash flow from its mining operations. This data is furnished to provide additional information and is a non-GAAP measure. Total cash costs presented do not
have a standardized meaning under GAAP and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation a s a substitute for
measures of performance prepared in accordance with GAAP and is not necessarily indicative of operating costs presented under GAAP. Further details regarding this measure and a
reconciliation to the nearest GAAP measure is provided in the MD&A accompanying our financial statements.
ALL-IN SUSTAINING COSTS
Consistent with guidance announced in 2013 from the World Gold Council, an association of various gold mining companies from around the world of which New Gold isa member, New Gold
defines “all-in sustaining costs” per ounce as the sum of total cash costs, sustaining capital expenditures, corporate general & administrative costs, capitalized and expen sed exploration that
is sustaining in nature and environmental reclamation costs, all divided by the ounces sold to arrive at a per ounce figure. New Gold believes this non-GAAP measure provides further
transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the comp any in assessing its operating performance, its ability to generate
free cash flow from current operations and its overall value. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and
is not necessarily indicative of operating costs presented under GAAP. Further details regarding this measure and a reconciliation to the nearest GAAP measure is provided in the MD&A’s
accompanying our financial statements.
ADJUSTED NET EARNINGS
“Adjusted net earnings” and “adjusted net earnings per share” are non -GAAP financial measures. Net earnings have been adjusted a nd tax affected for the group of costs in “Other gains and
losses” on the condensed consolidated income statement. The adjusted entries are also impacted for tax to the extent that the underlying entries are impacted for tax in the unadjusted net
earnings from continuing operations. The company uses this measure for its own internal purposes and believes the presentation of adjusted net earnings enables investors and analysts to
better understand the underlying operating performance of our core mining business through the eyes of management. Management periodically evaluates the components of adjusted net
earnings based on an internal assessment of performance measures that are useful for evaluating the operating performance of our business and a review of the non-GAAP measures used
by mining industry analysts and other mining companies. Adjusted net earnings and adjusted net earnings per share are intended to provide additional information only and do not have any
standardized meaning under GAAP. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not
necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently. Further details regarding this
measure and a reconciliation to the nearest GAAP measure is provided in the MD&A’s accompanying our financial statements.
ADJUSTED NET CASH GENERATED FROM OPERATIONS
“Adjusted net cash generated from operations” is a non-GAAP financial measure. Net cash generated from operations has been adjusted for one-time expenses related to the company’s
acquisition of Rainy River in the third quarter and a one -time charge incurred in the second quarter related to the settlement o f the company’s legacy gold hedge position. The company
believes the presentation of adjusted net cash generated from operations enables investors and analysts to better understand the underlying operating performance of our core mining
business. Adjusted net cash generated from operations is intended to provide additional information only and does not have any standardized meaning under GAAP. It should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Further details regarding this measure and a reconciliation to the nearest GAAP
measure is provided in the MD&A’s accompanying our financial statements.
37
