Pit Wall Movement at Cerro San Pedro Mine

VANCOUVER - New Gold Inc. reported that a minor pit wall movement occurred at its Cerro San Pedro Mine in Mexico on August 23, 2013. Approximately 800,000 tones of material moved on the northeast pit wall. Importantly, no one was injured, however, as a precautionary measure, mining in the area below the pit wall movement was temporarily suspended. New Gold is working with geotechnical experts to evaluate the area and assess the impact on the company's near-term mine plan and production at Cerro San Pedro. The objective is to develop a plan for the safe resumption of mining in the area below the movement, however, if it is determined that this area will not be accessible until the next phase of mining, scheduled to take place in 2014, the company's preliminary estimate is that approximately 15,000 ounces of gold production would be carried forward from 2013 into future periods. The cost to mine and recover these ounces is not expected to increase by a material amount.

"Our primary focus is on ensuring the safety of our team and, as a result, we have stopped mining activity below the area of the ground movement," stated Robert Gallagher, President and Chief Executive Officer. "We are currently assessing the ground conditions and plan to adjust our mine plan to maximize our 2013 production, however, any ounces that cannot be accessed this year as a result of the slide are expected to be mined in the coming two years."

Separately, in the last month, recoveries from the Cerro San Pedro leach pad have been below the company's targets. New Gold is evaluating various alternatives to restore the recovery rates to historical levels.

New Gold anticipates that Cerro San Pedro's 2013 production will be below original expectations, however, efforts to mitigate the impact of the pit wall movement and lower recovery rates are already underway. New Gold will provide further details on the 2013 outlook for Cerro San Pedro, including the amount of production that is expected to be carried forward to future periods, as well as any potential impact on the consolidated company as part of its third quarter results.