Rainy River Resources Ltd. Corporate Presentation - April 2013
Rainy river site visit presentation v final
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Transcript of Rainy river site visit presentation v final
Rainy River Site VisitSeptember 15, 2015
Cautionary statements
ALL AMOUNTS IN U.S. DOLLARS UNLESS OTHERWISE STATED
2
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, which address events, results, outcomes or developments that New Gold expects to occur are “forward-looking statements”. Forward-looking statements arestatements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”,“targeted”, “estimates”, “forecasts”, “intends”, “anticipates”, “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: anticipated total cash costs and all-in sustaining costs, and the factors contributing to those expected results, as well as expected capital expenditures; mine life; mineralreserve and resource estimates; grades expected to be mined; the expected production, costs, economics, revenues and operating parameters and permitting requirements of the Rainy Riverproject; planned activities for 2015 and beyond at the Rainy River Project, as well as planned exploration activities and expenses; anticipated progress of construction and targeted timing forcommissioning and full production (and other activities) related to Rainy River; statements with respect to the ability of the parties to satisfy the conditions of and complete the sale of New Gold’sinterest in the El Morro property to Goldcorp Inc.(“El Morro sale”); and the ability of Teck Resources Limited and Goldcorp Inc. to satisfy the conditions of and complete the El Morro – Relincho jointventure (“Project Corridor”); and statements with respect to the payment of the remaining $75 million from Royal Gold.
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 anduncertainties, many of which are beyond New Gold’s ability to control or predict. Certain material assumptions regarding such forward-looking statements are discussed in this presentation, NewGold’s annual and quarterly management’s discussion and analysis (“MD&A”), its Annual Information Form and the Technical Reports on the Rainy River Project dated February 14, 2014 filed atwww.sedar.com. In addition to, and subject to, such assumptions discussed in more detail elsewhere, the forward-looking statements in this presentation are also subject to the followingassumptions: (1) there being no significant 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, 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 consistent with current levels; (6) equipment,labour and materials costs increasing on a basis consistent with New Gold’s current expectations; (7) arrangements with First Nations and other Aboriginal groups in respect of Rainy River beingconsistent with New Gold’s current expectations; (8) all required permits, licenses and authorizations being obtained from the relevant governments and other relevant stakeholders within theexpected timelines; (9) the results of the feasibility study for the Rainy Project being realized; (10) conditions of the El Morro sale; and the conditions to closing of Project Corridor being satisfied in atimely manner; and (ii) conditions to the payment of the remaining $75 million from Royal Gold being satisfied in mid-2016.
Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actualresults, 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 and the availability and management of capital resources; additional funding requirements; price volatility in the spot and forward markets for metals and othercommodities; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada and the United States; discrepancies between actual and estimatedproduction, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, andthe United States, 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 inwhich 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 thenecessary licenses and permits and complying with the permitting requirements of each jurisdiction in which New Gold operates, including, but not limited to: in Canada, obtaining the necessarypermits for the Rainy River Project; delay or failure to receive regulatory approvals or the failure to satisfy other closing conditions to the El Morro sale or Project Corridor; the lack of certainty withrespect to foreign legal systems, which may not be immune from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law; the uncertainties inherent tocurrent 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; rising costs of labour,supplies, fuel and equipment; actual results of current exploration or reclamation activities; uncertainties inherent to mining economic studies including the feasibility study for Rainy River; changesin 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 andcosts 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 tenurefor Rainy River; risks, uncertainties and unanticipated delays associated with obtaining and maintaining necessary licenses, permits and authorizations and complying with permitting requirements;and not realizing the potential benefits of the El Morro sale. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, includingenvironmental 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 toobtain 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.
Forward-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 qualified by these cautionary statements. New Gold expressly disclaims any intention or obligation to update or revise any forward-lookingstatements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.
The footnotes, endnotes and appendices to this presentation contain important information. The endnotes and appendices are found at the end of the presentation.
Site visit agenda – September 15, 2015
8:00am SAFETY ORIENTATION
8:30am PRESENTATION
10:30am SITE TOUR
12:30pm LUNCH
1:00pm Q&A / CORE DISPLAY
3:00pm DEPART SITE / END OF VISIT
3
Presentation agenda
INTRODUCTION RANDALL OLIPHANT
GEOLOGY AND EXPLORATION MARK PETERSEN
DEVELOPMENT PLAN PAUL HOSFORD
OPERATIONAL READINESS GRANT GODDARD
LIFE-OF-MINE PLAN OVERVIEW RYAN HOEL
PROCESSING DAVE HALL
CORPORATE SOCIAL RESPONSIBILITY /
FIRST NATIONSBOB GALLAGHER
SUMMARY RANDALL OLIPHANT
4
Rainy River overview
• Low-risk, mining-friendly jurisdiction
• 100%-owned large land package totalling
over 190 square kilometres
• High-quality, long-life open pit and
underground mine
• 17 kilometre tie-in to power and close to
regional infrastructure
• Supportive local government and community
• 3.8 million ounce gold reserve(1) with
continued exploration upside
RAINY RIVER PROJECT
Construction commenced in May 2015; start-up targeted mid-2017
RAINY RIVER PROJECTONTARIO, CANADA
51. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral
reserves and mineral resources” and “Technical Information”.
Rainy River quick facts
Operations Annual Production(3) Costs(3)
Gold Reserve(1) and Mine Life Capital Targeted Start-up
1. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral reserves and
mineral resources” and “Technical Information”.
2. Current plan based on $1.25 C$/US$ foreign exchange rate. As at August 31, 2015.
3. First nine years.
4. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
5. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”.
3.8 Moz
Gold reserve
$570per oz
Total cash costs(4)
$670per oz
All-in sustaining costs(5)
Open pit and underground
21,000 tonne per day
process plant with
conventional crushing,
grinding, leaching and
carbon-in-pulp technology
$733million
Remaining development capital(2)
Mid-2017
14 year
Base mine life
~$33million
Average sustaining capital per year(3)
~325 Koz
Gold production
~480 Koz
Silver production
3.3 Mozat 1.5 g/t
6
Direct Processing Material
Rainy River location and infrastructure
• Located 65 kilometres
northwest of Fort Frances
and approximately 160
kilometres south of
Kenora
• Town of Fort Frances has
a population of over
10,000 people
• Established infrastructure
with year-round road
access and power lines
in close proximity
• Accepted into the
Industrial Electricity
Incentive Program ("IEI
Stream 3") which enables
the project to receive a
reduction in electricity
costs through the end of
2024
7
Rainy River development – Management team
Bob Gallagher
President & CEO
• Over 40 years in the mining industry in leadership roles with Placer Dome,
Newmont Mining and Peak Gold
David Schummer
EVP & COO
• Over 25 years in the mining industry
• Previously with Newmont Mining in multiple senior leadership roles
Mark Petersen
VP Exploration
• Over 30 years in minerals exploration and leadership roles
• New Gold’s Qualified Person for mineral reserve and resource disclosure
Peter Marshall
VP Project Development
• 30 years of resource development experience
• Previously with Terrane Metals and Placer Dome
Paul Hosford
Project Director
• 30 years of resource experience
• Previously with Terrane Metals and Hatch
Grant Goddard
General Manager
• Over 30 years of mineral resource experience
• Previously COO with TMAC Resources
Chris McGoldrick
Construction Director
• Over 35 years of construction and mining project development experience
• Previously with Anglo American, Placer Dome and Inco
8
Rainy River stream highlights
9
INCREASES FINANCIAL FLEXIBILITY
PROVIDES ATTRACTIVE COST OF CAPITAL
MINIMIZES IMPACT TO CONTINUED PROJECT UPSIDE
MAXIMIZES EXPOSURE TO GOLD PRICE UPSIDE
Secured 20% of total development
capital for less than 6% of estimated
future revenues(1)(2)(3)
Increases project rate of return to
equity holders by approximately 3%(1)
Stream percentage reduced by 50%
to 3.25% gold and 30% silver after
threshold ounces(4) delivered
Ongoing cash payments to New Gold
at 25% of spot gold and silver prices
1. Second instalment of $75 million is to be paid when 60% of development capital spent and other customary conditions are satisfied.
2. Based on $877 million total development capital.
3. Based on a gold price of $1,200/oz and silver price of $16/oz and first nine years of full production from 2018 through 2026.
4. Threshold ounces defined as 230,000 gold ounces and 3.1 million silver ounces.
• On July 20, 2015 New Gold announced a $175 million streaming transaction with Royal Gold on
future gold and silver production from Rainy River
IRR TO ROYAL GOLD
Gold Price ($/oz)
Silver Price ($/oz)
$1,100
$14.00
$1,200
$16.00
$1,300
$18.00
IRR (%) 2.5% 3.7% 4.9%
$327
$733$175
$757
$65
$236
Rainy River funding
• Stream proceeds of $175
million together with cash
proceeds from El Morro
transaction provide meaningful
contribution towards funding
Rainy River
• Amount of free cash flow
generated over next two years
to determine if any draw
required on credit facility
• 2014 sustaining free
cash flow(1) was $143
million
Liquidity Rainy River
Development
Cash Balance June 30/15
Proceeds from Stream(3)
Rainy River Remaining
Development Capital(5)
1. Sustaining free cash flow is equal to cash generated from operations less sustaining capital expenditures.
2. El Morro cash proceeds net of tax. Completion of the El Morro transaction is subject to certain conditions.
3. Second instalment of $75 million to be paid when 60% of development capital spent and other customary conditions are satisfied.
4. As at June 30, 2015.
5. As at August 31, 2015.
10
Proceeds from El Morro(2)
Available Credit Facility
Sustaining Free Cash Flow
from Operations(1)
Rainy River Remaining
Development Capital(4)
Financial analysis
$0.05 change in exchange rate
AFTER-TAX PROJECT ECONOMICS(1)
Gold Price ($/oz) $1,150 $1,200 $1,300
C$/US$ exchange 1.33 1.30 1.25
5% NPV ($mm) 428 462 604
IRR (%) 11.8 12.4 15.3
Payback (years) 5.9 5.7 4.9
$100 per ounce change in gold price
~$65mm ~1.4% ~$15mm~$20/oz
After-tax NAV IRR Total Cash Costs(2)Development
Capital
~$180mm ~3.9%
After-tax NAV IRR
1. Net present value discounted to July 1, 2015, excludes sunk costs. IRR and payback period inclusive of all project development costs. Stream proceeds included as a net reduction to capital costs with future cash flow reduced by stream payment
obligations. Assumes second instalment of stream proceeds paid in 2016. Silver price assumption of $16/oz.
2. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”.
11
12
GEOLOGY AND EXPLORATIONMark Petersen, VP Exploration
Rainy River history
1967 First Exploration
1967 – 1989 Noranda, HudBay, Inco, Mingold
1988 OGS Map P3140 Gold Grains in Rotosonic Drill Core and Surface Samples (1987-1988)
1990 Nuinsco started exploration
1994 First diamond drill program discovered 17 Zone
1994 – 2004 BP, 433 zones discovered
2005 Rainy River Resources Ltd. purchased property
2006 ODM Zone discovered
2007 Cap Zone discovered
2008 First NI 43-101 Resource Completed
2012 PEA completed; discovery of Intrepid Zone
2013New Gold acquired Rainy River Resources Ltd.
Updated Resource Estimate
2014Environmental assessment report submitted
New Gold completed updated Feasibility Study
2015 Environmental approvals for Rainy River received and construction commenced
13
Superior province gold districts
From Poulsen et al. (2000)
14 Moz produced28 Moz total endowment
7+ Moz
QFZ
14
Porcupine
Property ownership and known gold prospects
RR ODMclaim block
RR Off Lake claim block
Mine DevelopmentArea
New Gold exploration prospects
15
MineDevelopment Areas
Local geology and gold resources
16
Mine stratigraphy
Massive to pillowed mafic flows
Massive to amygdaloidal Dacite flows
CAP
ODM
HS
433
17
Mineral reserves – Looking north
Bayfield Extensions
Rainy River Mineral Reserves Summary(1)
as at December 31, 2014
Proven & Probable
Reserves
Tonnes
000’s
Gold
g/t
Silver
g/t
Gold
Koz
Silver
Koz
Open pit 62,705 1.31 2.8 2,642 5,632
Underground 4,187 4.96 10.3 668 1,388
Stockpile 37,384 0.39 2.0 462 2,390
Total P&P 104,276 1.13 2.8 3,772 9,410
Bayfield extensions are not included in current mineral reserves for Rainy River.
181. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral
reserves and mineral resources” and “Technical Information”.
$800 per ounce optimized pit shell
M&I (yellow) and Inferred (pink) >1.0 gpt AuView looking North
Resource upside
Rainy River Mineral Resources Summary(1)
as at December 31, 2014
Measured & Indicated
Resources
Tonnes
000’s
Gold
g/t
Silver
g/t
Gold
Koz
Silver
Koz
Open pit 40,315 1.31 3.5 1,696 4,483
Underground 5,595 3.99 15.2 718 2,728
Stockpile 35,350 0.42 2.5 482 2,788
Total M&I 81,260 1.11 3.8 2,896 9,999
Inferred Resources 18,088 1.10 4.0 637 2,336
191. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral
reserves and mineral resources” and “Technical Information”. Mineral resources are exclusive of reserves.
Reserve pit shell
MI&I resource pit shell
Mineral reserves and resources summary(1)
GOLD
SILVER
1. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral
reserves and mineral resources” and “Technical Information”. Mineral resources are exclusive of reserves.
Open Pit Direct
Processing 1.3 g/tOpen Pit Direct
Processing 1.3 g/t
Open Pit Direct
Processing 2.8 g/t Open Pit Direct
Processing 3.5 g/t
Underground
Direct Processing 5.0 g/t
Underground
Direct Processing 4.0 g/t
Underground Direct Processing 10.3 g/t Underground
Direct Processing 15.2 g/t
3.8 Moz
9.4 Moz
2.9 Moz
10.0 Moz
0.6 Moz
2.3 Moz
20
Open Pit Direct Processing
Underground Direct Processing
Stockpile
Stockpile
Stockpile
StockpileStockpile
• Large contiguous land position
• 190 square kilometres
• Primary deposits and mineral resources well
defined:
• Over 2,000 drill holes
• Over 1,000,000 metres of diamond drilling
• Over 500,000 assays
• Average 35 metre drill hole spacing
• Proven & Probable reserves(1):
• 3.8 Moz gold
• 9.4 Moz silver
• Measured & Indicated resources (exclusive of
reserves)(1):
• 2.9 Moz gold
• 10.0 Moz silver
• Excellent long-term exploration upside
• Rainy River district is a direct analog to the
prolific Doyon-Bousquet-LaRonde gold-rich
VMS camp in the central Abitibi belt
Summary
• Identify and test potential for new
mineralized horizons with focus on
potential higher grade upside
• 2015 exploration budget
• $1.8 million mine development
area
• $4.2 million broader district
holdings
NEAR-TERM FOCUS
• District scale prospectivity recognized in
multiple areas
• Rainy River VMS stratigraphy
trend extensions to east and west
• Off Lake orogenic gold veins
FURTHER POTENTIAL
211. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral
reserves and mineral resources” and “Technical Information”. Mineral resources are exclusive of reserves.
23
DEVELOPMENT PLANPaul Hosford, Project Director
Infrastructure
Rainy River development – Milestones completed
All major construction permits received. Schedule 2 permit expected H1’2016
All land purchases complete
Temporary Accommodations Facility complete and 416 beds available
Engineering and procurement complete
All mechanical, electrical, instrumentation equipment purchased
Execution commenced for Bulk Earthworks, Concrete Supply and Install, Steel Supply/Install, Highway 600
Road Relocation and Water Management Earthworks Construction (3 packages), East Access Road,
Temporary Buildings, Steel tanks and Pinewood Water Supply System
Contracts tendered for 230kV transmission line, Tailings Management Area (TMA), HV substation and the
major mechanical/piping/electrical/instrumentation (MPEI) packages
Initial mine fleet assembly commenced
Operations team recruitment in progress
Developed on-site quarries for aggregate material supply
ACHIEVED TO DATE
24
Rainy River development – 2015 year-end targets
Project construction completion progressed to approximately 25%
Award remaining major contracts
Complete Highway 600 road realignment and East Access Road
Complete plant site earthworks
Complete grinding building foundations and erect steel building
Primary crusher structure approximately 50% complete
Complete water management earthworks diversions and facilities, and starter water management pond
Commence open pit pre-stripping and haul road build out
Complete manufacture and delivery of Ball and SAG mills
PLANNED BY END OF YEAR
25
Rainy River timeline
2014
2015 2016 2017
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Complete Feasibility Study
Submit Environmental Assessment Report
Order Long Lead Equipment
Award EPCM Contract
Detailed Engineering & Procurement
Provincial Environmental Assessment Approval
Federal Environmental Assessment Approval
Process Plant Construction
Tailings & Water Management Facilities Construction
Delivery of Pre-Stripping Mine Equipment
Power Line Construction
Commence Pre-Strip & Pit Development
Commissioning
Targeted milestones
Mid-2017 – Start-up and Commissioning26
Description ($mm)
Direct Costs
Mining 157
On-Site Infrastructure 88
Process Plant 298
Tailings Facility 61
Access Corridor 16
Off-Site Facilities 22
Total Direct Capital Costs 641
Owner's and Indirect Costs
Other Indirects 150
Owner's Costs 87
Total Owner's & Indirect Capital Costs 237
Total Project $877
PROJECT DEVELOPMENT CAPITAL COSTS(1)(2)
1. Current plan based on $1.25 C$/US$ foreign exchange rate. Contingency has been distributed across the cost items.
2. Numbers may not add due to rounding.
3. As at August 31, 2015.
Rainy River development capital breakdown
$0.05 change in exchange rate equals
~$15 million change in development capital
REMAINING
DEVELOPMENT
CAPITAL(3)
$733 million
SPENT TO DATE(3)
$144 million
16%SPENT TO DATE
27
Rainy River – Committed to date(1)
28
Description EstimateTotal Spent /
Committed
Direct Costs
Mining 157 68
On-Site Infrastructure 88 49
Process Plant 298 187
Tailings Facility 61 20
Access Corridor 16 10
Off-Site Facilities 22 3
Total Direct Capital Costs 641 337
Owner's and Indirect Costs
Other Indirects 150 86
Owner's Costs 87 57
Total Owner's & Indirect Capital Costs 237 143
Total Project $877 $480
PROJECT DEVELOPMENT CAPITAL COSTS ($mm)(2)(3)
~55% of total capital
spent/committed to date
1. As at August 31, 2015.
2. Current plan based on $1.25 C$/US$ foreign exchange rate. Contingency has been distributed across the cost items.
3. Numbers may not add due to rounding.
SPENT TO DATE(1)
$144 million
FIXED PRICE AND
QUANTITIES
$134 million
FIXED UNIT PRICES,
VARIABLE QUANTITIES
$202 million
Detailed engineering 100% complete
Finalize detailed control estimate and schedule
Tender, award and execute site clearing
Prepare and award major civil works contracts
• Complete plant site, infrastructure and water
management earth works
• Construct Highway 600 realignment and mine
access road
• Construct mill building foundation
• Commission first phase of mine fleet
• Commence prestripping
2015 CAPITAL EXPENDITURE DETAILS 2015 PROGRAM
($mm)
Process plant $84
Mining 52
Indirects 27
On-site infrastructure 27
Owners costs 22
Accommodation facility 21
Tailings facilities 15
Access corridor 13
Off-site facilities 13
Construction management services 5
Contingency/escalation 21
Total $300
Rainy River 2015 capital expenditure and project plan
29
Site construction images
Grinding Building
Primary Crusher Foundation
Highway 600 Realignment
Primary Crusher Foundation
30
Site construction images
Ball Mill Foundation West Creek Diversion
Treatment PondPlant site area - 20,000 cubic metres of rock blasted
Kitchen at the camp
Additional Precast
31
32
OPERATIONAL READINESSGrant Goddard, General Manager
Operational readiness
• What is the operations “project plan”?
• Guiding the day-to-day work of the
operations
• Linkages of construction activities and
overall project schedule
• Is not “added work” but “the work”
A thoughtful, planned process of managing the many activities
necessary to be executed to assure a successful operational
start-up and sustainable mining operation
33
Operations team
Doug Desaulniers
Maintenance Manager
Dave Hall
Mill Manager
Ryan Hoel
Mine Manager
Ann Wallin
HR ManagerVelibor Petric
Finance Manager
Sarah Thompson
Materials Manager
Peta Risojevic
Health & Safety
Manager
Nigel Fisher
Environment Manager
Chris Reeves
Business Development
Manager
Stacey Jack
Community Affairs
Manager
Grant Goddard
General Manager
OPERATIONS TEAM OPERATIONS SUPPORT TEAM
Key operations team members in place34
Key workstreams
Organizational Readiness
Health & Safety
Environmental
Communities
Training
Human Resources
Mining
Processing
Asset Management
Procurement & Contracts
Finance & Cost Management
Commissioning, Ramp Up and Handover
Business & Technical Systems
Internal Communications
Sales
Knowledge Management
Continuous Improvement
Transition & Closeout
HOW DO WE PLAN FOR WORKSTREAMS?
• Workshops focusing on what activities we
need to accomplish and when to ensure we
are ready for “Go Live”
• Outputs of the workshops are inputs into the
detailed operations work plan and milestone
schedule
• Integrate the plan and schedule with
construction
• Development of critical actions register
• Weekly management of work streams to
ensure effective risk management
• Use of a “War Room” to keep information
relevant and transparent
• Periodic re-visit of milestones/activities, as
field/execution/project evolves
35
36
LIFE-OF-MINE PLAN OVERVIEWRyan Hoel, Mine Manager
37
Site layout
West Mine Rock
Stockpile
East Mine Rock
Stockpile
Open pit illustration
LOOKING SOUTH WEST
38
Current mining fleet and equipment
Hauling and loading equipment
• 6 – Komatsu 830E 218t (haul trucks)
• 2 – Komatsu PC5500 26m3 (hydraulic
shovels)
• 1 – Komatsu WA1200 18m3 (large wheel
loader)
• 3 – Komatsu D375/D475 (dozers)
Drills
• 2 – Sandvik DR580 (blasthole drills)
Next major deliveries – Q4’2015
• 2 – Cat 16M (graders)
• 1 – Komatsu 830E 218t (haul truck)
39
Open pit design
Reserves(1)
Ore tonnage Mt 100
Including Stockpile Excluding Stockpile
Au grade g/t 1.0 1.3
Ag grade g/t 2.6 2.8
Au koz 3,104
Ag koz 8,022
Waste tonnage Mt 320
Overburden Mt 72
Open pit mine design based on:
• Updated block model:
10m x 10m x 10m
• Truck and Hydraulic Shovel
• 2 Year pre-production
• 9 Year mine life plus stockpile
Phase 1 (2015 – 2020)
Phase 2 (2018 – 2022)
Phase 3 (2021 – 2025)
North
401. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral
reserves and mineral resources” and “Technical Information”.
• Primary mobile equipment fleet will move 68 Mtpy of ore, waste and
overburden at peak production rates
Equipment Model UnitsRequired During
DevelopmentCurrently At Site
Haul trucks Komatsu 830E 218t 22 8 6
Hydraulic shovels (diesel) Komatsu PC5500 26m3 2 2 2
Hydraulic shovel (electric) Komatsu PC7000 29m3 1 0 0
Large wheel loader Komatsu WA1200 18m3 1 1 1
Blasthole drills Sandvik DR580 3 2 2
Dozers Komatsu D375 6 4 3
Graders Cat 16M 3 2 0
Open pit equipment
41
Open pit mining and milling schedule
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2017 2018 2019 2020 2021
Ore Waste Overburden
MINING SCHEDULE – FIRST FIVE YEARS (KT)
Strip
Ratio 3.9 3.3 4.0 4.1 4.8
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2017 2018 2019 2020 2021
Open pit ore to mill Open pit ore to stockpile
MILLING SCHEDULE – FIRST FIVE YEARS (KT)
Avg. grade to
mill (g/t)
Avg. grade to
stockpile (g/t)0.4
1.5
0.4
1.5
0.4
1.4
0.4
1.4
0.4
1.3
Planned three year
ramp up to full
mining
capacity
(1)
1. Mining of waste/overburden expected to commence early-2016.
42
Open pit mining cost
BREAKDOWN OF OPEN PIT MINING COST PER TONNE
OTHER (1%)
BLASTING (11%)
FUEL AND ELECTRICITY (30%)
EQUIPMENT OPERATING COST
(INCLUDING MAINTENANCE) (32%)
LABOUR (26%)
Significant Canadian
dollar exposure
~70%Diesel price assumption
$0.95 per litre
43
C$2.15 /t mined
Current diesel price
~$0.60 per litre
Underground design
• 1,500 tpd longhole open stope mine
with backfill
• 10 year mine life with potential to
expand at depth
Reserves(1)
Ore tonnage Mt 4.2
Au grade g/t 5.0
Ag grade g/t 10.3
Au koz 668
Ag koz 1,388
441. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral
reserves and mineral resources” and “Technical Information”.
Underground mine plan
ODM West
ODM Main Upper
ODM Main Lower
433 Zone
ODM East
17 East Upper
17 East Lower
Intrepid Lower
Intrepid Upper
Bayfield Burns Block
(‘under development’)
45
Underground equipment
• Underground development scheduled to begin once production from open pit commences
• Primary equipment fleet will mine 1,500 tpd of ore at full production rates
Equipment Specification UnitsRequired During
Underground Development
Jumbo drill Sandvik DD421 3 2
Load-Haul-Dump Loader Cat R2900 4 2
Haul Truck Cat AD45 6 4
Mechanized Bolter Sandvik DS411 2 2
Production Long Hole Drill Sandvik DL431 2 0
Face Charger, Explosives Loader Normet Charmec MF 605 2 2
Production Explosives Loader Bulk Modules 1 0
Shotecrete Sprayer Normet Spraymec 1050WP 1 1
Transmixer Normet Ultimec LF600 1 1
46
Underground mining schedule
0
100
200
300
400
500
600
2019 2020 2021 2022 2023
MINING SCHEDULE – FIRST FIVE YEARS (KT)
• Underground development scheduled to begin once production from open pit commences
• 23 months development to first underground ore - $115 million capital costs
31.64.5
32.34.8
18.35.3
7.75.4
5.05.3
Five year ramp up
assumed to full
production
Gold grade (g/t)
Silver grade (g/t)
47
Underground cost
BREAKDOWN OF UNDERGROUND COST PER TONNE
OTHER (7%)
BLASTING (3%)
EQUIPMENT OPERATING
COST (INCLUDING
MAINTENANCE) (32%)
LABOUR (45%)
FUEL AND ELECTRICITY (13%)
Significant Canadian
dollar exposure
~70%
48
C$90.62 /t mined
Mill feed schedule
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2017 2018 2019 2020 2021
Open pit ore to mill Underground ore to mill
MILL FEED SCHEDULE – FIRST FIVE YEARS (KT)
Average Mill
Head Grade (g/t)
Underground Grade (g/t)
Open Pit Grade (g/t)
1.5 1.5 1.5 1.5 1.5
1.5
--
1.5
--
1.4
4.5
1.4
4.8
1.3
5.3
49
Gold production profile
0
50
100
150
200
250
300
350
2017 2018 2019 2020 2021
Open Pit Underground
~325 Koz
50
GOLD PRODUCTION PROFILE – FIRST FIVE YEARS (Koz)
51
PROCESSINGDave Hall, Mill Manager
RECLAMATION◊ Buildings are removed◊ Local Vegetation is planted
over stock piles◊ Tailings Management Area is
turned into a lake◊ Open Pit fills with water
Schematic process flow sheet
52
Process plant design
PROCESS DESIGN CRITERIA
• Axb = 24.2
• Bond work index = 15.0
• Crusher work index = 25.0
• 80th percentile BWI & Axb used for mill
design
• Life-of-mine recovery
• Gold ~91%
• Silver ~63%
MAJOR PROCESS EQUIPMENT
• Crusher: 55” x 83”; 600 kW (800 HP)
• Coarse ore stockpile – 60,000 tonnes
with 20,000 tonne live storage
• SAG Mill: 36’ x 20’; 15 MW (20,000 HP)
variable speed
• Ball Mill: 26’ x 40.5’; 15 MW (20,000 HP)
variable speed
• P80 = 75 micron target grind
• Pebble Crusher: 448 kW (600 HP)
• Leach Tanks: 8 x 18 m Ø, 30-hour leach
• CIP Tanks: 7 x 330 m3
• Two Cyanide Destruction tanks: 11.5 Ø,
1.5-hour retention
53
Mill sizing
• Over 400 comminution tests were conducted covering a large cross section of the pit and ore types
• 3.5 tests per million tonnes versus industry standard of one test per million tonnes
• SAG mill design was based on the 80th percentile A x b values; industry standard is 75th percentile
• Circuit was designed using three independent sizing methods (Starkey, OMC, and Morrel) with
excellent correlation
• Mill motor and drive combination will provide the power draw required to process the ore at 84% of
the available power; industry standard is 88% to 90%
• Design parameters were reviewed and endorsed by an independent third party industry expert
• Gyratory and pebble crusher both have sufficient horsepower that could be used for additional
throughput and/or finer crush sizes – this would allow additional grinding throughput
• Ball Mill has sufficient grinding power as the drive was selected to maintain common mill drive spares
54
Appropriate size mills and drives in place, secondary crushing
not required to reach nameplate throughput
Processing plant
55
Processing cost
56
BREAKDOWN OF PROCESSING COST PER TONNE MILLED
OTHER(1) (14%)
LABOUR (18%)
PROPANE AND
ELECTRICITY (22%)
REAGENTS (24%)
GRINDING MEDIA AND
LINERS (22%)
C$9.01
Significant Canadian
dollar exposure
~80%Current power cost assumption
$0.045/kWh Further reduction in electricity
costs anticipated through 2024
as part of IEI Stream 3
1. Includes: Maintenance, transportation and water treatment.
57
CORPORATE SOCIAL RESPONSIBILITY /
FIRST NATIONSBob Gallagher, President and CEO
Benefits to community
• 400 construction and 600 operations
phase jobs estimated
– Currently employ ~80 people
with 50% hired locally
– Operations team consists of
~50% local hires and 16%
members of Aboriginal groups
• Annual indirect and induced
employment in Ontario during
operations is expected to total
approximately 600 and 575 jobs,
respectively
• When added to direct employment for
the Rainy River project, total direct
and indirect employment in Ontario as
a result of the operation phase is
approximately 2,000 jobs per year
• Estimated gross annual mine payroll
of $45 – $50 million per year
ECONOMIC CONTRIBUTIONS(1)
1. Based on 2015 PriceWaterhouse Cooper Report – “Economic and Social Impact of New Gold Inc.'s Ontario Operations” prepared for New Gold.
DIRECT AND INDIRECT GDP IMPACT OF NEW GOLD IN ONTARIO
Indirect
Direct
$31.4 MILLION
$401.1 MILLION
58
First Nations communities
59
Community engagement
We have been an active and engaged member of
the community and have a number of successes
and initiatives that show our commitment:
• Four signed Participation Agreements with
local Aboriginal Groups
• Productive, ongoing discussions with four
additional First Nations
• Contributions of nearly $100,000 to the local
district through donations, sponsorships and
scholarships
• Established two local New Gold offices, one in
Emo and a second in Thunder Bay – with
open door policies for questions and feedback
• Established multiple First Nations joint
ventures with non Aboriginal contractors
• Initiated a Supplier Request for Information to
source locally wherever possible
• New Gold continues to have progressive
relationships with each of these communities 60
SUMMARYRandall Oliphant, Executive Chairman
61
Rainy River – Where are we today
• Permits to enable commencement of major
earthworks construction received in May
• Detailed engineering complete
• Construction-related activities progressing
on schedule
• Temporary accommodation facility
complete with 416 beds operational
• First major earthworks for process plant
site commenced and completed in May;
mill building construction commenced
• First concrete pour for primary crusher
foundation successfully completed in July;
mill building foundation installation
commenced in August
• Delivery and assembly of initial mining fleet
commenced in August
• Delivery of mills on schedule for late 2015
62
Rainy River summary
1. Based on 2015 Behre Dolbear Report – “2015 Ranking of Countries for Mining Investment”.
2. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 6. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral reserves
and mineral resources” and “Technical Information”. Mineral resources are exclusive of reserves.
• 17km tie-in to power and close to
regional infrastructure
• Land package over 190 square
kilometres
• Supportive local government and
community
JURISDICTION RESOURCE SCALE(2)
Ontario, Canada
GOLD
RESERVES
3.1Moz at 1.0g/tOPEN PIT
UNDERGROUND
0.7Moz at 5.0g/t
3.8 Moz
#1
GOLD M&I
RESOURCES
2.2Moz at 0.9g/tOPEN PIT
UNDERGROUND
0.7Moz at 4.0g/t
2.9 Moz
Construction activities remain on time and on budget
63
Rainy River summary (cont’d)
1. As at August 31, 2015.
2. Current plan based on $1.25 C$/US$ foreign exchange rate.
START-UP / COMMISSIONING
REMAINING DEVELOPMENT
CAPITAL ESTIMATE(1)(2)
2015 CAPITAL SPEND ESTIMATE(2)
Mid-2017
• $144 million spent through
August 31, 2015
$733million
• ~80% in Canadian dollars
$300million
64
Rainy River cost profile
• ~80% in Canadian dollars
65
Description (C$ per tonne milled) ($ per gold ounce produced)
Direct Costs
Open pit mining 10.26338
Underground mining 3.65
Processing 9.01 219
General and administrative 1.80 44
Royalties 0.67 20
Refining and transport 0.12 3
Cash costs 25.51 624
Silver by-product sales at $16.00 per ounce silver (0.98) (24)
Total cash costs(1) 24.53 600
Sustaining capital 4.12 100
All-in sustaining costs(2) 28.65 700
BREAKDOWN OF OPERATING COSTS(1)
1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. Current plan based on $1.25 C$/US$ foreign exchange rate and $16/oz silver price.
2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. Current plan based on $1.25 C$/US$ foreign exchange rate and $16/oz silver price.
• Mining costs are projected to be C$2.15 per tonne of material for the open pit and
C$90.62 per tonne of material for the underground
• Costs per tonne milled over the life-of-mine are summarized below:
Strong balance sheet
661. Cash and equivalents as at June 30, 2015.
2. $64 million of $300 million facility used for Letters of Credit at June 30, 2015.
3. Second instalment of $75 million to be paid when 60% of development capital spent and other customary conditions are satisfied.
4. El Morro cash proceeds of $90 million less taxes. Completion of the El Morro transaction is subject to certain conditions. Refer to Appendix 5.
$803million
LIQUIDITY POSITION
$236 million
UNDRAWN
CREDIT
FACILITY(2)
CASH AND
EQUIVALENTS(1)
$327 million
ONGOING SUSTAINING
FREE CASH FLOW
GENERATION
$175 million
PROCEEDS FROM
STREAMING
TRANSACTION(3)
~$65 million
NET CASH PROCEEDS FROM
EL MORRO TRANSACTION(4)
Future opportunities
INTEGRATION OF BAYFIELD MINERAL RESOURCES
RESOURCES OPEN AT DEPTH – INCREASED UNDERGROUND MINE POTENTIAL
UPSIDE POTENTIAL ON MILL THROUGHPUT
REGIONAL RESOURCE PROSPECTIVITY
67
Rainy River impact
1. For a detailed breakdown of mineral resources and reserves by category and the key assumptions and parameters, refer to Appendix 1. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estimates of mineral reserves
and mineral resources” and “Technical Information”.
2. First nine years.
3. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. First nine years.
4. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. First nine years.
5. Net present value discounted to July 1, 2015, excludes sunk costs. IRR inclusive of all project development costs. Stream proceeds included as a net reduction to capital costs. At spot prices of: Gold - $1,150/oz, Silver - $16/oz; C$/US$ - $1.33.
68
GOLD RESERVES(1) 3.8Moz
MINE LIFE 14 years
AVERAGE PRODUCTION(2) ~325,000
TOTAL CASH COSTS(3) ~$570/oz
ALL-IN SUSTAINING COSTS(4) ~$670/oz
REMAINING DEVELOPMENT CAPITAL $733 million
NET PRESENT VALUE(5) $428 million
IRR(4) 11.8%
JOB CREATION ~600
Site visit agenda for remainder of day
10:30am SITE TOUR
12:30pm LUNCH
1:00pm Q&A / CORE DISPLAY
3:00pm DEPART SITE / END OF VISIT
69
THANK YOUNew Gold Team
Appendix
71
Mineral reserves
72
Mineral Reserves estimate as at December 31, 2014
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
Direct processing material
Open Pit
Proven 15,839 1.47 2.0 - 746 1,038 -
Probable 46,866 1.26 3.1 - 1,896 4,594 -
Open Pi t P&P (direct process ing) 62,705 1.31 2.8 - 2,642 5,632 -
Underground
Proven - - - - - - -
Probable 4,187 4.96 10.3 - 668 1,388 -
Underground P&P (direct process ing) 4,187 4.96 10.3 - 668 1,388 -
Stockpile material
Open Pit
Proven 6,843 0.38 1.5 - 84 332 -
Probable 30,541 0.39 2.1 - 378 2,058 -
Open Pi t P&P (s tockpi le) 37,384 0.39 2.0 - 462 2,390 -
Total P&P
Proven 22,682 1.14 1.9 - 830 1,370 -
Probable 81,594 1.12 3.1 - 2,942 8,040 -
Total Rainy River P&P 104,276 1.13 2.8 - 3,772 9,410 -
Metal grade Contained metal
Mineral resources
73
Measured and Indicated Mineral Resource estimate (exclusive of Reserves) as at December 31, 2014
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
Direct processing material
Open Pit
Measured 3,416 1.35 1.8 - 148 199 -
Indicated 36,899 1.30 3.6 - 1,548 4,284 -
Open Pi t M&I (direct process ing) 40,315 1.31 3.5 - 1,696 4,483 -
Underground
Measured - - - - - - -
Indicated 5,595 3.99 15.2 - 718 2,728 -
Underground M&I (direct process ing) 5,595 3.99 15.2 - 718 2,728 -
Stockpile material
Open Pit
Measured 1,232 0.35 1.2 - 14 49 -
Indicated 34,118 0.43 2.5 - 468 2,739 -
Open Pi t M&I (s tockpi le) 35,350 0.42 2.5 - 482 2,788 -
Total M&I
Measured 4,648 1.08 1.7 - 162 248 -
Indicated 76,612 1.11 3.9 - 2,734 9,751 -
Total Rainy River M&I 81,260 1.11 3.8 - 2,896 9,999 -
Metal grade Contained metal
Mineral resources (cont’d)
74
Inferred Resource estimate as at December 31, 2014
Tonnes
000s
Gold
g/t
Silver
g/t
Copper
%
Gold
Koz
Silver
Koz
Copper
Mlbs
RAINY RIVER
Direct processing
Open Pit 7,785 0.82 2.7 - 206 665 -
Underground 2,609 4.20 7.6 - 352 635 -
Tota l Direct Process ing 10,394 1.67 3.9 - 558 1,300 -
Stockpile
Open Pit 7,694 0.32 4.2 - 79 1,036 -
Total Rainy River Inferred 18,088 1.10 4.0 - 637 2,336 -
Metal grade Contained metal
1) New Gold’s Mineral Reserves and Mineral Resources have been estimated in accordance with the CIM Standards, which are incorporated by reference in NI 43-101.
2) For year-end 2014 mineral reserves for the Company’s mineral properties have been estimated based on the following metal prices and lower cut-off criteria:
Mineral Property Gold
(US$/oz)
Silver
(US$/oz)
Copper
(US$/lb)
Lower Cut-off
Rainy River $1,200 $18.00 - Open Pit Direct Processing: 0.30 – 0.70 g/t AuEq
Open Pit Stockpile: 0.30 g/t AuEq
Underground: 3.50 g/t AuEq
Reserves and resources notes
3) New Gold reports its Measured and Indicated Mineral Resources exclusive of Mineral Reserves. Measured and Indicated Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. Inferred Mineral Resources have a greater amount of uncertainty as to their existence, economic and legal feasibility, do not have demonstrated economic
viability, and are likewise exclusive of Mineral Reserves.
4) Year-end 2014 Mineral Resources for the Company’s mineral properties (other than the Mineral Resource estimates for the Rainy River Project and Blackwater Project, which are
effective March 10, 2015) have been estimated based on the following metal prices and lower cut-off criteria:
5) Mineral Resources are classified as Measured, Indicated and Inferred and are reported based on technical and economic parameters consistent with the methods most suitable for their
potential commercial exploitation. Where different mining and/or processing methods might be applied to different portions of a Mineral Resource, the designators ‘open pit’ and
‘underground’ have been applied to indicate envisioned mining method. Likewise the designators ‘oxide’, ‘non-oxide’ and ‘sulphide’ have been applied to indicate the type of mineralization
as it relates to appropriate mineral processing method and expected payable metal recoveries. Mineral Reserves and Mineral Resources may be materially affected by environmental,
permitting, legal, title, taxation, sociopolitical, marketing and other risks and relevant issues. Additional details regarding Mineral Reserve and Mineral Resource estimation, classification,
reporting parameters, key assumptions and associated risks for each of New Gold’s material properties are provided in the respective NI 43-101 Technical Reports which are available at
www.sedar.com.
6) All Mineral Resource and Mineral Reserve estimates for New Gold’s operating properties and El Morro Project are effective December 31, 2014. For the Rainy River and Blackwater
Projects, the Mineral Resource estimates are effective March 10, 2015 and the Mineral Reserve estimates are effective December 31, 2014. For the Rainy River Project, the Mineral
Resource estimate reflects New Gold’s acquisition of Bayfield, which was effective January 1, 2015.
Mineral Property Gold
(US$/oz)
Silver
(US$/oz)
Copper
(US$/lb)
Lower Cut-off
Rainy River $1,300 $20.00 - Open Pit Direct Processing: 0.30 – 0.45 g/t AuEq
Open Pit Stockpile: 0.30 g/t AuEq
Underground: 2.50 g/t AuEq
75
Endnotes
CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MINERAL RESERVES AND MINERAL 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”, “Indicated Mineral Resource” and “Inferred Mineral Resource” used in this presentation are
Canadian mining terms as defined in the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards for Mineral Resources and Mineral Reserves adopted by CIM Council on May
10, 2014 and incorporated by reference in National Instrument 43-101 (“NI 43-101”). 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. As such, certain
information contained in this presentation concerning descriptions of mineralization and resources under Canadian standards is not comparable to similar information made public by United States
companies subject to the reporting and disclosure requirements of the United States Securities and Exchange Commission.
An “Inferred Mineral Resource” has a great amount of uncertainty as to its existence and as to its economic and legal feasibility. Under Canadian rules, estimates of inferred mineral resources may not form
the basis of feasibility of pre-feasibility studies. It cannot be assumed that all or any part of an “Inferred Mineral Resource” will ever be upgraded to a higher confidence category. Readers are cautioned
not to assume that all or any part of an “Inferred Mineral Resource” exists or is economically or legally mineable.
Under United States standards, mineralization may not 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 estimation is made. Readers are cautioned not to assume that all or any part of the measured or indicated mineral resources will ever be converted into mineral reserves. In addition,
the definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” under CIM standards differ 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 A. Petersen, Vice President, Exploration of New Gold. Mr. Petersen is an AIPG Certified Professional
Geologist and a “Qualified Person” under National Instrument 43-101.
NON-GAAP MEASURES
All cash costs and all-in sustaining cost estimates (excluding historical amounts) in this presentation assume the following commodity prices and exchange rates: Silver - $16.00 per ounce, Copper - $2.75
per pound, and CDN/USD - $1.25, AUD/USD - $1.25, MXN/USD - $15.00, unless otherwise stated.
(1) ALL-IN SUSTAINING COSTS
Consistent with guidance announced in 2013 by the World Gold Council, an association of various gold mining companies from around the world of which New Gold is a member, New Gold defines “all-in
sustaining costs” per ounce as the sum of total cash costs, capital expenditures that are sustaining in nature, corporate general and administrative costs, capitalized and expensed exploration that is
sustaining in nature and environmental reclamation costs, all divided by the ounces of gold sold to arrive at a per ounce figure. New Gold believes this non-GAAP financial measure provides further
transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the company in assessing the company’s operating performance, its ability to generate
free cash flow from current operations and its overall value. This data is furnished to provide additional information and is a non-GAAP financial measure. All-in sustaining costs presented do not have a
standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS. Further details regarding historical all-in
sustaining costs and a reconciliation to the nearest IFRS measures are provided in the MD&A accompanying New Gold’s financial statements filed from time to time on www.sedar.com.
(2) TOTAL CASH COSTS
“Total cash costs” per ounce figures are non-GAAP measures which are calculated in accordance with a standard developed by The Gold Institute, a worldwide association of suppliers of gold and gold
products that 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. The company believes that certain investors use this information to evaluate the company’s performance and ability to generate liquidity through operating cash
flow to fund future capital expenditures and working capital needs. This measure, along with sales, is considered to be a key indicator of the company’s ability to generate operating earnings and cash flow
from its mining operations. Total cash costs include mine site operating costs such as mining, processing and administration costs, royalties, production taxes, and realized gains and losses on fuel
contracts, but are exclusive of amortization, reclamation, capital and exploration costs and net of by-product sales. Total cash costs are then divided by ounces of gold sold to arrive at a per ounce figure.
Co-product cash costs remove the impact of other metal sales that are produced as a by-product of gold production and apportion the cash costs to each metal produced on a percentage of revenue basis,
and subsequently divides the amount by the total ounces of gold or silver or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. Unless otherwise indicated, all total cash
cost information in this presentation is net of by-product sales. This data is furnished to provide additional information and is a non-GAAP financial measure. Total cash costs and co-product cash costs
presented do not have a standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under GAAP. Further details
regarding historical total cash costs and a reconciliation to the nearest IFRS measures are provided in the MD&A accompanying New Gold’s financial statements filed from time to time on www.sedar.com.
76
Contact information
Investor Relations
Hannes Portmann
Vice President, Corporate Development
416-324-6014
77