. Repositioned with Restructured Balance Sheet.
. Provides Updated 2020 Annual Operational Outlook.

TORONTO--(BUSINESS WIRE)-- July 30, 2020 – New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE American: NGD) reports second quarter results for the Company as of June 30, 2020 as well as its updated operational outlook for 2020.

During the quarter, the Company has been able to execute on numerous key strategic opportunities, including the closing of the $300 million partnership with Ontario Teachers' Pension Plan, the divestment of the Blackwater Project for C$190 million cash and an 8% gold stream and the restructuring of our balance sheet through the $400 million bond offering due 2027 that funded the redemption of the senior notes due 2022.

An earnings conference call and webcast will begin at 8:30 am Eastern Time today to discuss the second quarter financial results. (Details provided at the end of this news release).

(For detailed information, please refer to the Company’s Second Quarter Management’s Discussion and Analysis (MD&A) and Financial Statements that are available on the Company’s website at www.newgold.com and on SEDAR at www.sedar.com. The Company uses certain non-GAAP financial performance measures throughout this press release. Please refer to the “Non-GAAP Financial Performance Measures” section of this press release and the MD&A. All amounts are in U.S. dollars unless otherwise indicated).

Second Quarter and Six-Month Highlights

The Company is providing its updated operational outlook for 2020 that incorporates the impact of COVID-19. Annual guidance was withdrawn on April 15, 2020 while the Company evaluated the impact on operations over the balance of the year.
Total production for the second quarter was 98,079 gold equivalent (gold eq.) ounces (64,294 ounces of gold, 134,282 ounces of silver and 16.9 million pounds of copper). For the six-month period, production was 201,514 gold eq. ounces (131,084 ounces of gold, 265,699 ounces of silver and 35.4 million pounds of copper).
Revenues for the quarter were $129 million and $271 million for the six-month period.
Operating expense for the quarter was $726 per gold eq. ounce and $799 per gold eq. ounce for the six-month period.
Total cash costs1,2 for the quarter were $773 per gold eq. ounce and $849 per gold eq. ounce for the six-month period.
All-in sustaining costs (AISC)1,2 for the quarter were $1,283 per gold eq. ounce and $1,370 per gold eq. ounce for the six-month period.
Net loss from operations for the quarter was $46 million ($0.07 per share) and $74 million ($0.11 per share) for the six-month period.
Adjusted net loss2 for the quarter was $3.3 million ($nil per share) and $21.1 million ($0.03 per share) for the six-month period.
Cash generated from operations for the quarter was $53 million ($0.08 per share) and $104 million ($0.15 per share) for the six-month period. Operating cash flow generated from operations for the quarter, before non-cash changes in working capital2, was $52 million ($0.08 per share) and was $99 million ($0.15 per share) for the six-month period.
During the quarter, the Company announced that it entered into a definitive agreement with Artemis Gold Inc. to divest its Blackwater Project for C$190 million in cash, an 8% gold stream and a C$20 million equity stake in Artemis (refer to the Company's June 9, 2020 news release for further information).
During the quarter, the Company completed a $400 million senior notes offering yielding 7.50% due in 2027 that was used, along with cash on hand, to fund the full redemption of its outstanding 6.25% senior notes due in 2022 completed on July 10, 2020 (refer to the Company's June 24, 2020 and July 10, 2020 news releases for further information).
The Company's 2019 Sustainability Report, including the updated Tailings Fact Sheet is now available and can be accessed via the following link: www.2019sustainabilityreport.newgold.com.
"We are very pleased with our overall performance in this unprecedented quarter, a quarter that included enormous challenges presented by COVID-19. While we prioritized the safety of our employees and our key partners, we were able to report strong operational performance and complete two strategic transactions that restructured our balance sheet and improved our liquidity position,” stated Renaud Adams, CEO. “Over the balance of the year, our operations will return to pre-COVID levels and we will complete all non-recurring capital projects at Rainy River and advance the development of the C-zone as we position the Company for free cash flow generation beginning in 2021. New Gold's future will be supported by profitable operations, a stronger balance sheet, and as our current hedges expire at year end, we will be fully exposed to the strengthened gold price.”

1. "Total cash cost per gold equivalent ounce" and AISC per gold equivalent ounce" are calculated gold equivalent ounces sold

2. See "Non-GAAP Measures" section of this press release.
Financial Highlights
Q2 2020 Q2 2019 H1 2020 H1 2019
Revenu 128.5 155.1 270.8 323.0
Net earnings (loss), per share (0.07) (0.06) (0.11) (0.08)
Adj. net earnings (loss)1 per share $nil (0.01) (0.03) (0.02)
Operating cash flow, per share 0.08 0.09 0.15 0.21
Adj. operating cash flow1, per share 0.08 0.10 0.15 0.23

Refer to the “Non-GAAP Performance Measures” section of this press release.
Revenues for the quarter were $129 million and $271 million for the six-month period, a decrease compared to the prior year quarter due to a decrease in gold and copper sales volumes and a decrease in copper prices, partially offset by an increase in gold prices.
Operating expenses for the quarter and six-month period were lower than the prior-year period due to lower production. Additionally, for the three months ended June 30, 2020, operating expenses were positively impacted by the receipt of the Canada Emergency Wage Subsidy.
Net loss for the quarter was $46 million ($0.07 per share) and $74 million ($0.11 per share) for the six-month period, an increase in loss over the prior year quarter primarily due to lower other gains and losses. Other gains and losses for the quarter and six-month period includes a $38 million impairment loss on the reclassification of Blackwater as held for sale.
Adjusted net loss for the quarter was $3.3 million ($nil per share) and $21.1 million ($0.03 per share) for the six-month period, which is a decrease in loss over the prior year quarter, primarily due to lower operating expenses and lower depreciation and depletion, partially offset by lower revenue.
2020 Revised Operational Outlook

On April 15, 2020, the Company, via news release, which is available at www.sedar.com, withdrew annual guidance until the impact of COVID-19 was better understood. Our revised operational outlook for 2020 incorporates the lower than expected grades at New Afton over the balance of the year and the overall impact of COVID-19 at our operations as we continue to prioritize the safety of our employees and local and Indigenous communities. Unit costs and capital are expected to remain near planned levels. (refer to the Company's February 13, 2020 news release for original annual guidance information)

Following a two-week voluntary suspension at the Rainy River Mine due to COVID-19, the mine resumed operations at reduced levels to allow the non-local workforce to be safely reintroduced and is expected to achieve full capacity early in the third quarter. Development of the self-funded C-zone has returned to planned levels and exploration programs will be launched at both operations as permits are received.

In 2020, the Company reports production on a gold equivalent basis as well as on a per-metal basis. Cash costsand AISCwill be reported on a per gold equivalent ounce basis. Throughout the year the Company will report gold equivalent ounces using a constant ratio of $1,500 per gold ounce, $17.75 per silver ounce and $2.85 per pound copper, and a foreign exchange rate of 1.35 Canadian dollars to the US dollar.

Operational Estimates Rainy River New Afton 2020 Revised Consolidated Guidance
Gold Produced (ounces) 222,000 - 232,000 62,000 - 72,000 284,000 - 304,000
Copper Produced (Mlbs) 65 - 75 65 - 75
Gold Eq. Produced (ounces)1 225,000 - 235,000 190,000 - 220,000 415,000 - 455,000
Operating expense per gold eq. ounce 1,4 $920 - $980 $630 - $710 $780 - $860

Cash Costs per gold eq. ounce 1,4 $920 - $980 $740 - $820 $830 - $910
Corporate G&A per gold eq. ounce1 $35 - $45
Depreciation and depletion per gold eq. ounce1 $540 - $600 $240 - $300 $400 - $460
All-in Sustaining Costs per gold eq. ounce1,4 $1,610 - $1,690 $1,080 - $1,160 $1,410 - $1,490

Capital Investment & Exploration Expense Estimates
Sustaining Capital & Sustaining Leases ($M)4 $145 - $160 $62 - $72 $207 - $232
Growth Capital ($M)2,4 $2 - $5 $70 - $85 $82 - $102
Exploration ($M)3 ~$2 $4 - 8 $7 - 12

Gold equivalent ounces includes approximately 285,000 to 305,000 ounces of silver at Rainy River and approximately 295,000 to 315,000 ounces of silver at New Afton.
Consolidated growth capital includes ~$10-$12 million for Blackwater.
Exploration expense includes ~$1-$2 million of Corporate Exploration.
The revised operational outlook does not include any potential future receivable under the Canadian Emergency Wage Subsidy, which has been extended until December 2020.
Rainy River Outlook

Production estimates for the year have been lowered, primarily related to the impact of COVID-19 in the first half of the year, resulting in lower tonnes and slightly lower grades milled for the full year.
Cash costs and operating expense per gold eq. ounce for the year have been slightly increased primarily due to lower sales.
Total capital for the year has increased by less than $10 million due to a portion of the Tailings Management Area construction that was originally scheduled for completion in 2021, now planned for completion in 2020.
New Afton Outlook

Gold and copper production estimates for year have been lowered, primarily due to lower than planned gold and copper grades.
Cash costs and operating expense per gold eq. ounce for the year are expected to increase, primarily due to lower sales.
Total capital estimates remain consistent with original estimates, and it is expected that planned capital projects will be completed in the second half of the year.

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