New Gold Reports Record Gold Production

 

VANCOUVER, BC - New Gold Inc. reported financial and operational results for the fourth quarter and year ended 2009. The company had its best operational year, exceeding gold production guidance at lower than forecasted total cash costs(1) resulting in record cash flow for New Gold. New Gold is also pleased to re-iterate its guidance for 2010 with forecast gold production expected to increase further to between 330,000 and 360,000 ounces at total cash cost of $445 to $465 per ounce sold, net of by-product sales.

Fourth Quarter and Full Year 2009 Highlights

Results presented below are for the period of ownership for the Mesquite (June 1, 2009) and Cerro San Pedro mines (June 30, 2008).

-   Highest quarterly gold production for the company in the fourth

        quarter with an increase of 41% to 111,672 ounces from 78,950 ounces

        in the same period in 2008

-   Total cash cost in the fourth quarter decreased 17% to $472 per

        ounce sold, net of by-product sales, from $567 per ounce sold in the

        same period in 2008

-   Cash flow from operations of $54.4 million in the fourth quarter 2009

        versus $17.3 million in the same period in 2008

-   Gold production in 2009 increased 29% to 301,773 ounces from 233,103

        ounces in 2008

-   Total cash cost in 2009 decreased 18% to $465 per ounce sold, net

        of by-product sales, from $566 per ounce sold in 2008

-   Cash flow from operations of $79.0 million for 2009 versus $23.1

        million in the prior year

-   2009 year-end cash balance of $271.5 million, including $9.2 million

        of restricted cash, versus $182.0 million in 2008

-   Additional net cash of $70.1 million received after year end from

        sale of asset backed notes ($47.3 million) and payment from Goldcorp

        ($50.0 million) less Mesquite term loan pre-payment ($27.2 million)

All three of New Gold's operating mines had excellent gold production results with Cerro San Pedro and Peak Mines also producing silver and copper, respectively, above guidance. As anticipated, the Mesquite mine achieved its highest quarterly production since the mine was brought back into production in January 2008 with 61,245 ounces of gold produced during the fourth quarter. Across its operations, New Gold's total cash cost(1) for 2009 was $465 per ounce of gold sold, net of by-product sales, below the guidance range of $470 to $490 per ounce of gold sold and considerably below the $566 per ounce of gold sold in 2008.

The company’s address 110-666 Burrard St., Vancouver, BC V6C 2X8, (604)696-4100, fax: (604)696-4110.