Rainy River Feasibility Study Results Announced

VANCOUVER, BC - New Gold Inc. reported the results of its Feasibility Study for the Rainy River project in Ontario, Canada. The company successfully completed the acquisition of Rainy River Resources Ltd. on October 16, 2013. Through the second half of 2013, New Gold's development team worked with third party consultants to complete its Feasibility Study for the Project. The purpose was to ensure that the key inputs and assumptions used for Rainy River were consistent with those used for New Gold's other projects and operations. This Feasibility Study builds upon the study completed and filed by Rainy River Resources on May 24, 2013.

Feasibility Study Highlights: First nine years - average annual gold production of 325,000 ounces at total cash costs of $613 per ounce and all-in sustaining costs (2) of $736 per ounce; First nine years - average mill head grade of 1.44 grams per tone gold; Life-of-mine gold and silver production of 3.4 million ounces and 6.0 million ounces at total cash costs of $663 per ounce and all-in sustaining costs (2) of $765 per ounce; Base case economics - at $1,300 per ounce gold, $22.00 per ounce silver and a 0.95 US$/C$ foreign exchange rate, Rainy River has a pre-tax 5% net present value (NPV) of $438 million, an internal rate of return ("IRR") of 13.1% and a payback period of 5.4 years; Alternative case economics - at $1,600 per ounce gold, $26.00 per ounce silver and a parity US$/C$ foreign exchange rate, Rainy River has a pre-tax 5% NPV of $1.0 billion, an IRR of 21.1% and a payback period of 3.6 years; Development capital costs of $885 million inclusive of a $70 million contingency; Targeted commissioning in late 2016 with first year of full production in 2017; 14-year mine life with direct processing of open pit and underground ore, at a rate of 21,000 tones per day ("tpd"), for first nine years and processing of a combination of stockpile and underground ore thereafter.

"We are very pleased to have completed the Feasibility Study for our Rainy River project," stated Randall Oliphant, Executive Chairman. "The results of the study are entirely consistent with our expectations when we decided to acquire Rainy River Resources. The Project provides our company with an asset that meets all of our key criteria including: solid returns with strong leverage to higher gold prices, manageable capital costs, a robust, long-lived production base with continued regional exploration potential, below industry average costs, and located in a great mining jurisdiction."

The Rainy River mineral resource is reported in relation to a conceptual open pit shell at a gold cut-off of 0.30 grams per tone for open pit resources and a gold cut-off value of 2.5 grams per tone for underground resources. Globally, the deposit contains Measured and Indicated mineral resources suitable for direct processing, from mine to mill, of 106 million tones at 1.54 grams per tone gold and 2.88 grams per tone silver, representing 5.2 million ounces of gold and 9.8 million ounces of silver. In addition, the open pit Measured and Indicated mineral resources suitable for stockpiling and future processing total 71 million tones at 0.43 grams per tone gold and 2.09 grams per tone silver, representing 1.0 million ounces of gold and 4.8 million ounces of silver. A table summarizing the mineral resource, including key assumptions, is included at the conclusion of this news release in the section entitled Technical Information.

The Project is located 50 kilometers northwest of Fort Frances, a town with a population of approximately 8,000 people, in northwestern Ontario. The Project benefits from its proximity to existing infrastructure. Hydroelectric power will be sourced through the construction of a new 17 kilometer transmission line that will connect the Project to a pre-existing 230 kV line that currently links Fort Frances and Kenora, Ontario, a small city with a population of approximately 15,000 people, located to the north of the Project.

The Rainy River project site is easily accessible by a network of all-weather roads that branch off the well-maintained Trans-Canada Highways 11 and 71. Access roads are serviced, allowing year-round access. The Canadian National Railway is located 21 km to the south of the Project and runs east-west.

During the initial development stage, the direct on-site personnel requirement peaks at approximately 450 people. As a result of the Project's proximity to various towns, no camp facilities are envisioned during the construction or operational phase. The underground mine is scheduled to be developed once the open pit begins production. Development capital costs related to the underground mine are included in the sustaining capital estimate.