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<SEC-DOCUMENT>0001204459-08-001909.txt : 20080916
<SEC-HEADER>0001204459-08-001909.hdr.sgml : 20080916
<ACCEPTANCE-DATETIME>20080915210031
ACCESSION NUMBER:		0001204459-08-001909
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080915
FILED AS OF DATE:		20080916
DATE AS OF CHANGE:		20080915

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			New Gold Inc. /FI
		CENTRAL INDEX KEY:			0000800166
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL MINING [1000]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31722
		FILM NUMBER:		081072903

	BUSINESS ADDRESS:	
		STREET 1:		3110 - 666 BURRARD ST.
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2X8
		BUSINESS PHONE:		(604) 696-4100

	MAIL ADDRESS:	
		STREET 1:		3110 - 666 BURRARD ST.
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2X8

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DRC RESOURCES CORP                                      /FI
		DATE OF NAME CHANGE:	19860904
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>newgold091508f6k.htm
<DESCRIPTION>FORM 6-K
<TEXT>

<head>

<title>New Gold Inc.: Form 6-K - Prepared by TNT Filings Inc.</title>
</head>


<html>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="5">UNITED STATES</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="5">SECURITIES AND EXCHANGE COMMISSION</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">Washington, D.C. 20549</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;<b><font size="2">___________________</font></b></p>
<p style="text-align: center; margin-top: 6pt; margin-bottom: 0pt"><b>
<font size="5">FORM 6-K</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR<br>
15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">For the month of September 2008</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">Commission File Number 001-31722</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">___________________</font></b></p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="6">New Gold Inc.</font></b></p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Park Place, 3110-666 Burrard Street</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Vancouver, British Columbia V6C 2X8</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Canada</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">(</font><i><font size="2">Address of principal executive offices</font></i><font size="2">)</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">___________________</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)<br>
&nbsp;</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Form 20-F</font> <font face="Wingdings 2" size="4">&#163;</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="2">Form
40-F</font> <font face="Wingdings 2" size="4">Q</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1)</font>
<font face="Wingdings 2" size="4">&#163;</font></p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7)</font>
<font face="Wingdings 2" size="4">&#163;</font></p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Yes</font> <font face="Wingdings 2" size="4">&#163;</font><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No</font>
<font face="Wingdings 2" size="4">Q</font></p>
<p style="text-indent: 0.25in; text-align: left; margin-top: 0pt; margin-bottom: 0pt">
&nbsp;</p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">If &#147;Yes&#148; is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82- <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u>.</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<div title="EE+ Page Break" style="font-size: 1pt; page-break-after: always; width: 100%; height: 1px">
  <hr color="#000000" size="5">
</div>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">DOCUMENTS FILED AS PART OF THIS FORM 6-K</font></b></p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt"><font size="2">
<a style="text-decoration: none" href="#EXHIBIT INDEX">See the Exhibit Index
hereto.</a></font></p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2">SIGNATURES</font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.</font></p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%" colspan="2">&nbsp;</td>
    <td width="50%"><b><small>NEW</small> <small>GOLD</small> <small>INC.</small></b></td>
  </tr>
  <tr>
    <td width="50%" colspan="2">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" colspan="2">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="49%">&nbsp;</td>
    <td width="1%" align="left">
    <p style="margin-right: 15"><font size="2">By: </font></td>
    <td width="50%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">/s/ Basil Huxham</font></td>
  </tr>
  <tr>
    <td width="49%">&nbsp;</td>
    <td width="1%" align="left">
    <p style="margin-right: 15"><font size="2">Name:&nbsp;&nbsp; </font></td>
    <td width="50%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium">
    <font size="2">Basil Huxham</font></td>
  </tr>
  <tr>
    <td width="49%">&nbsp;</td>
    <td width="1%" align="left">
    <p style="margin-right: 15"><font size="2">Title: </font></td>
    <td width="50%" style="border-top-style: none; border-top-width: medium">
    <font size="2">Executive Vice President and Chief Financial Officer</font></td>
  </tr>
  <tr>
    <td width="50%" colspan="2"><font size="2">Date: September 15, 2008</font></td>
    <td width="50%" style="border-top-style: none; border-top-width: medium">&nbsp;</td>
  </tr>
</table>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">2</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<div title="EE+ Page Break" style="font-size: 1pt; page-break-after: always; width: 100%; height: 1px">
  <hr color="#000000" size="5">
</div>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><b>
<font size="2"><a name="EXHIBIT INDEX">EXHIBIT INDEX</a></font></b></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="14%"><u><b><font size="2">Exhibit</font></b></u></td>
    <td width="86%"><b><font size="2"><u>Description</u></font></b></td>
  </tr>
  <tr>
    <td width="14%" bgcolor="#E9F1F8">&nbsp;</td>
    <td width="86%" bgcolor="#E9F1F8">&nbsp;</td>
  </tr>
  <tr>
    <td width="14%" bgcolor="#E9F1F8"><font size="2">
    <a href="newgoldexh991.htm" style="text-decoration: none">99.1</a></font></td>
    <td width="86%" bgcolor="#E9F1F8">
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align=left>
<font size="2"><a href="newgoldexh991.htm" style="text-decoration: none">
Business Acquisition Report Dated September 12, 2008</a></font></P>
    </td>
  </tr>
  <tr>
    <td width="14%">&nbsp;</td>
    <td width="86%">&nbsp;</td>
  </tr>
  <tr>
    <td width="14%">&nbsp;</td>
    <td width="86%">&nbsp;</td>
  </tr>
</table>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">3</font></p>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<hr color="#000000" size="5">

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</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>newgoldexh991.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<html>

<head>
<title>New Gold Inc.: Exhibit 99.1 - Prepared by TNT Filings Inc.</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<font FACE="Times New Roman"><b>
<p align="center"><font size="2">FORM 51-102F4 </font></p>
<p align="center"><font size="2">BUSINESS ACQUISITION REPORT </font></p>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2">Item 1 </font>
</p>
<p align="justify" style="margin-left: 78pt"><font size="2">Identity of Company
</font></p>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.1 </font></p>
<p align="justify" style="margin-left: 78pt"><font size="2">Name and Address of
Company </font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">New Gold Inc. (the
&quot;Company&quot;) <br>
666 Burrard Street, Suite 3110 <br>
Vancouver, British Columbia V6C 2X8 </font></p>
<b>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.2 </font></p>
<p align="justify" style="margin-left: 78pt"><font size="2">Executive Officer
</font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">The following
executive officer of the Company is knowledgeable about the significant
acquisition and this report: </font></p>
<p align="justify" style="margin-left: 78pt"><font size="2">Basil Huxham,
Executive Vice President and Chief Financial Officer <br>
(604) 639-2002 </font></p>
<b>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2">Item 2 </font>
</p>
<p align="justify" style="margin-left: 78pt"><font size="2">Details of
Acquisition </font></p>
</b>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b></font><b><font size="2">2.1 </font></b></p>
<p align="justify" style="margin-left: 78pt"><b><font size="2">Nature of
Business Acquired </font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">The Company acquired
all of the issued and outstanding shares of each of Peak Gold Ltd. (&quot;Peak&quot;) and
Metallica Resources Inc. (&quot;Metallica&quot;) pursuant to a business combination
agreement dated as of May 9, 2008 (the &quot;Business Combination Agreement&quot;) among
the Company, Peak and Metallica. </font></p>
<p align="justify" style="margin-left: 78pt"><font size="2">Additional
disclosure regarding the nature of the businesses of Peak and Metallica is
contained in the Joint Disclosure Booklet of the Company, Peak and Metallica
dated as of May 16, 2008 which is available under the Company&#146;s profile on SEDAR
at www.sedar.com. </font></p>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b></font><b><font size="2">2.2 </font></b></p>
<p align="justify" style="margin-left: 78pt"><b><font size="2">Date of
Acquisition </font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">The effective date
of the acquisition is June 30, 2008. </font></p>
<b>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.3 </font></p>
<p align="justify" style="margin-left: 78pt"><font size="2">Consideration </font>
</p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">Pursuant to the
Business Combination Agreement, (a) the Company and Peak completed an
arrangement (the &quot;Peak Arrangement&quot;) under section 288 of the <i>Business
Corporations Act</i> (British Columbia) pursuant to which all of the common
shares of Peak (the &quot;Peak Common Shares&quot;) were acquired by the Company and Peak
became a wholly-owned subsidiary of the Company; </font></p>
</font><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5><font FACE="Times New Roman">
<p align="center"><font size="2">- 2 - </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">and (b) the Company
and Metallica completed an arrangement (the &quot;Metallica Arrangement&quot;) under
section 192 of the <i>Canada Business Corporations Act</i> pursuant to which all
of the common shares of Metallica (the &quot;Metallica Common Shares&quot;) were acquired
by the Company and Metallica became a wholly-owned subsidiary of the Company.
</font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">As a result of the
Peak Arrangement, Peak shareholders were issued 0.1 of a common share of the
Company (the &quot;New Gold Common Shares&quot;) and C$0.0001 in cash for each Peak Common
Share. As a result of the Metallica Arrangement, Metallica shareholders were
issued 0.9 of a New Gold Common Share and C$0.0001 in cash for each Metallica
Common Share. </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">Pursuant to this
transaction, former shareholders of Peak acquired approximately 41% of the
Company, former shareholders of Metallica acquired approximately 41% of the
Company and shareholders of the Company were diluted to owning approximately 18%
of the Company (all on a non-diluted basis). </font></p>
<b>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.4 </font></p>
<p align="justify" style="margin-left: 78pt"><font size="2">Effect on Financial
Position </font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">The Company does not
have any current plans for material changes in the Company&#146;s business affairs or
the affairs of the acquired operations which may have a significant effect on
the results of operations and financial position of the Company </font></p>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b></font><b><font size="2">2.5 </font></b></p>
<p align="justify" style="margin-left: 78pt"><b><font size="2">Prior Valuations
</font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">Not Applicable.
</font></p>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b></font><b><font size="2">2.6 </font></b></p>
<p align="justify" style="margin-left: 78pt"><b><font size="2">Parties to
Transaction </font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">The transaction was
not with informed persons, associates or affiliates of the Company. </font></p>
<p align="justify" style="margin-bottom: -25.5pt"><font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</b></font><b><font size="2">2.7 </font></b></p>
<p align="justify" style="margin-left: 78pt"><b><font size="2">Date of Report
</font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">September 12, 2008.
</font></p>
</font><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5><font FACE="Times New Roman">
<p align="center"><font size="2">- 3 - </font></p>
<b>
<p align="justify"><font size="2">Item 3 </font></p>
<p align="justify" style="margin-left: 78pt; margin-top: -25.5pt">
<font size="2">Financial Statements </font></p>
</b>
<p align="justify" style="margin-left: 78pt"><font size="2">The following
financial statements are contained in Schedule &quot;A&quot; annexed hereto, which forms
part of this report: </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">(i) </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 108pt; margin-top: -25.5pt">
<font size="2">unaudited pro forma consolidated financial statements of the
Company, consisting of consolidated statements of operations for the six months
ended June 30, 2008 and for the year ended December 31, 2007, and the notes
thereto; </font></p>
<p align="justify" style="margin-left: 108pt"><font size="2">The following
financial statements are incorporated by reference in this report and are
available on SEDAR at www.sedar.com; </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">(ii) </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 108pt; margin-top: -25.5pt">
<font size="2">audited consolidated financial statements (the &quot;Audited 2007 Peak
Financial Statements&quot;) of Peak, consisting of a consolidated balance sheet as at
December 31, 2007 and 2006 and consolidated statements of operations,
comprehensive income and deficit and cash flows for the thirteen month period
then ended, together with the Auditors&#146; Report thereon and the notes thereto;
</font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">(iii) </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 108pt; margin-top: -25.5pt">
<font size="2">unaudited consolidated financial statements of New Gold Inc.,
consisting of a consolidated balance sheet as at June 30, 2008 and consolidated
statements of operations, other comprehensive income and retained earnings and
cash flows for the three month period then ended, together with the notes
thereto; </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">(iv) </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 108pt; margin-top: -25.5pt">
<font size="2">audited consolidated financial statements (the &quot;Audited 2007
Metallica Financial Statements&quot;) of Metallica, consisting of consolidated
balance sheets as at December 31, 2007 and 2006 and consolidated statements of
operations and deficit, comprehensive loss, accumulated other comprehensive
loss, and cash flows for each of the years in the three year period ended
December 31, 2007, together with the Auditors&#146; Report thereon and the notes
thereto; and </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">(v) </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 108pt; margin-top: -25.5pt">
<font size="2">audited consolidated financial statements (the &quot;Audited 2007 New
Gold Financial Statements&quot;) of New Gold, consisting of consolidated balance
sheets as at December 31, 2007 and 2006 and consolidated statements of
operations and deficit, comprehensive loss, accumulated other comprehensive
loss, and cash flows for each of the years then ended year period ended,
together with the Auditors&#146; Report thereon and the notes thereto; and </font>
</p>
<p ALIGN="JUSTIFY" style="margin-left: 78pt"><font size="2">As the attached
Audited 2007 Peak Financial Statements, Audited 2007 New Gold Financial
Statements, and Audited 2007 Metallica Financial Statements are identical to
those incorporated by reference in the joint disclosure booklet of the Company,
Peak and Metallica dated as of May 16, 2008, a copy of which is available under
the </font><font FACE="Times New Roman" size="2">Company&#146;s profile on SEDAR at
www.sedar.com, the Company has not obtained the consent of Deloitte &amp; Touche LLP
or PricewaterhouseCoopers LLP to include their respective Auditors&#146; Reports
attached to this report. </font></p>
</font><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5><font FACE="Times New Roman">
<p align="center"><font size="2">- 4 - </font></p>
</font><font FACE="Times New Roman" size="2"><b>
<p align="justify">Cautionary Note Regarding Forward-Looking Statements</b> </p>
</font><font FACE="Times New Roman" style="font-size: 8pt">
<p align="justify">This business acquisition report contains &quot;forward- looking
statements&quot;, within the meaning of the United States Private Securities
Litigation and Reform Act of 1955 and applicable Canadian Securities
legislation. Forward-looking statements include, but are not limited to,
statements with respect to the future prices of gold, silver and copper, the
estimation of mineral reserves and resources, the realization of mineral reserve
estimates, the timing and amount of estimated future production, costs of
production, capital expenditures, costs and timing of the development of new
deposits, success of exploration activities, permitting time lines, currency
exchange rate fluctuations, requirements for additional capital, government
regulation of mining operations, environmental risks, unanticipated reclamation
expenses, title disputes or claims and limitations on insurance coverage.
Generally, these forward- looking statements can be identified by the use of
forward-looking terminology such as &quot;plans&quot;, &quot;expects&quot;, or &quot;does not expect&quot;,
&quot;is expected&quot;, &quot;budget&quot;, &quot;scheduled&quot;, &quot;estimates&quot;, &quot;forecasts&quot; ,&quot;intends&quot;
,&quot;anticipates&quot;, or &quot;does not anticipate&quot;, or &quot;believes&quot;, or variations of such
words and phrases or state that certain actions, events or results &quot;may&quot;,
&quot;could&quot;, &quot;would&quot;, &quot;might&quot; or &quot;will&quot; or &quot;will be taken&quot;, &quot;occur&quot; or &quot;be
achieved&quot;. Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be materially different
from those expressed or implied by such forward-looking statements, including
but not limited to: anticipated synergies from the business combination may not
be realized; there may be difficulties in integrating the operations and
personnel of the Company, Peak and Metallica; the Company is subject to
significant capital requirements associated with its expanded operations and
portfolio of development projects since completion of the business combination;
fluctuations in the international currency markets and in the rates of exchange
of the currencies of Canada, the United States, Australia, Mexico and Chile;
price volatility in the spot and forward markets for commodities; impact of any
hedging activities, including margin limits and margin calls; discrepancies
between actual and estimated production, between actual and estimated reserves
and resources and between actual and estimated metallurgical recoveries; changes
in national and local government legislation in Canada, the United States,
Mexico, Chile and Australia or any other country in which the Company currently
or may in the future carry on business; taxation controls, regulations and
political or economic developments in the countries in which the Company does or
may carry on business; the speculative nature of mineral exploration and
development, including the risks of obtaining necessary licenses and permits;
diminishing quantities or grades of reserves; competition; loss of key
employees; additional funding requirements; actual results of current
exploration or reclamation activities; changes in project parameters as plans
continue to be refined accidents; labour disputes; and defective title to
mineral claims or property or contests over claims to mineral properties, as
well as those factors discussed in the section entitled &quot;Risks and
uncertainties&quot; in the Company&#146;s Management&#146;s Discussion and Analysis for the six
months ended June 30, 2008, the section entitled &quot;Risk Factors&quot; in the Joint
Disclosure Booklet of the Company, Peak and Metallica dated as of May 16, 2008
and the section entitled &quot;Risk Factors Relating to the Operations of the
Combined Company&quot; in the Company&#146;s Management Information Circular dated as of
May 16, 2008, each available under the Company&#146;s profiled on SEDAR at
www.sedar.com. Although the Company has attempted to identify important factors
that would cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not to
be as anticipated, estimated, or intended. There can be no assurance that such
statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements. The
Company does not undertake to update any forward-looking statements contained
herein, except in accordance with applicable securities laws. </p>
</font>
<p>&nbsp;</p>
<p>&nbsp;</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5><font FACE="Times New Roman">
<p align="center"><font size="2">- 5 - </font></p>
</font><b><font FACE="Times New Roman" size="2">
<p align="center"><u>SCHEDULE &quot;A&quot; </u></p>
</font><font FACE="Times New Roman" size="5">
<p>New Gold Inc.<br>
</font></b><font FACE="Times New Roman"><b>Pro forma consolidated statement of
operations six months ended June 30, 2008<br>
</b><font size="2">(Unaudited)<br>
(Expressed in thousands of U.S. dollars except per share amounts)</font></p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td width="35%" style="padding-left: 10">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">New Gold</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10">&nbsp;</td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">Peak</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">Metallica</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">New Gold</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">Note</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">Pro forma</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">consolidated</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">
    <p style="margin-right: 4">Gold Ltd.</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">
    <p style="margin-right: 4">Resources Inc.</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">
    <p style="margin-right: 4">Inc.</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">
    <p style="margin-right: 4">4</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">
    <p style="margin-right: 4">adjustments</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">
    <p style="margin-right: 4">pro forma</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: none; border-bottom-width: medium; padding-left: 10; border-top-style:solid; border-top-width:1">&nbsp;</td>
    <td align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: none; border-top-width: medium; padding-left: 10; border-right-style:none; border-right-width:medium">&nbsp;</td>
    <td align="center" style="border-style:none; border-width:medium; " colspan="6">
    <font SIZE="2">
    <p style="margin-right: 4">(Schedule 1)</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10">&nbsp;</td>
    <td align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8"><font SIZE="2">
    Revenues</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">95,718</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">43,497</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">139,215</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10"><font SIZE="2">Operating expense</font></td>
    <td align="right"><font SIZE="2">(64,632)</font></td>
    <td align="right"><font SIZE="2">(23,574)</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right"><font SIZE="2">(88,206)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">Depreciation and depletion</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(14,061)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(1,903)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(a)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(4,984)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(20,948)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10">
    <font SIZE="2">Earnings from mine operations</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">17,025</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">18,020</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(4,984)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">30,061</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10"><font SIZE="2">Corporation
    administration</font></td>
    <td align="right"><font SIZE="2">(7,223)</font></td>
    <td align="right"><font SIZE="2">(13,111)</font></td>
    <td align="right"><font SIZE="2">(7,527)</font></td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right"><font SIZE="2">(27,861)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">Exploration</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(2,218)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(615)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(2,833)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10">
    <font SIZE="2">Earnings from operations</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">7,584</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">4,294</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(7,527)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(4,984)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">(633)</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10"><font SIZE="2">Other income
    (expense)</font></td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-left: 26">Interest and other income</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">3,322</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">296</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">2,461</font></td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">6,079</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10"><font SIZE="2">
    <p style="margin-left: 26">Impairment of investment</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right"><font SIZE="2">(26,993)</font></td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right"><font SIZE="2">(26,993)</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-left: 26">Interest and finance fees</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">(546)</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">(17,172)</font></td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">(17,718)</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10"><font SIZE="2">
    <p style="margin-left: 26">Foreign exchange (loss) gain</font></td>
    <td align="right"><font SIZE="2">(1,174)</font></td>
    <td align="right"><font SIZE="2">(267)</font></td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">17</font></td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right"><font SIZE="2">(1,424)</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10"><font SIZE="2">Earnings (loss)
    before income taxes</font></td>
    <td width="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">9,186</font></td>
    <td width="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">4,323</font></td>
    <td width="12%" align="right"><font SIZE="2">(49,214)</font></td>
    <td width="5%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="12%" align="right"><font SIZE="2">(4,984)</font></td>
    <td width="12%" align="right"><font SIZE="2">(40,689)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">Income tax (expense) recovery</font></td>
    <td width="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(4,147)</font></td>
    <td width="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(6,149)</font></td>
    <td width="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">2,510</font></td>
    <td width="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(b)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">595</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font SIZE="2">(7,191)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2; padding-left: 10">
    <font SIZE="2"><b>Net earnings (loss)</b></font></td>
    <td width="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">5,039</font></td>
    <td width="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(1,826)</font></td>
    <td width="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(46,704)</font></td>
    <td width="5%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(4,389)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(47,880)</font></td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10"><font SIZE="2">Earnings (loss) per
    share (Note 5)</font></td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" style="padding-left: 10" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-left: 26">Basic</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">0.07</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">(0.02)</font></td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">(1.26)</font></td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" bgcolor="#E9F1F8"><font SIZE="2">(0.23)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 2; padding-left: 10">
    <font SIZE="2">
    <p style="margin-left: 26">Diluted</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">
    <p style="margin-right: 4">0.06</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(0.02)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(1.26)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2">
    <font SIZE="2">(0.23)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" colspan="6" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2; padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Weighted average number of
    common shares (Note 5) <br>
    Basic and diluted</font></td>
    <td align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">211,844</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5><font FACE="Times New Roman" size="5"><b>
<p>New Gold Inc.<br>
</b></font><font FACE="Times New Roman"><b>Pro forma consolidated statement of
operations year ended December 31, 2007<br>
</b></font><font FACE="Times New Roman" SIZE="2">(Unaudited)<br>
(Expressed in thousands of U.S. dollars except per share amounts)</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10">&nbsp;</td>
    <td width="12%" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="12%" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="12%" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="5%" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="12%" align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="12%" align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">New Gold</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10">&nbsp;</td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">Peak</font></td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">Metallica</font></td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">New Gold</font></td>
    <td width="5%" align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">Note</font></td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">Pro forma</font></td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">consolidated</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" valign="bottom">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">Gold Ltd.</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">Resources Inc.</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">Inc.</font></td>
    <td width="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">4</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">adjustments</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">pro forma</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10" valign="bottom">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10">&nbsp;</td>
    <td align="center" colspan="6" valign="bottom"><font SIZE="2">(Schedule 2)</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">Revenues</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">131,084</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">22,863</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">153,947</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10"><font SIZE="2">
    Operating expense</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(80,723)</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(23,015)</font></td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(103,738)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">Depreciation and depletion</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(18,973)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">(a)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(3,731)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(22,704)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10" valign="bottom">
    <font SIZE="2">Earnings (loss) from mine operations</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">31,388</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">(152)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">(3,731)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">27,505</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10"><font SIZE="2">
    Corporation administration</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(13,295)</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(6,241)</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(7,657)</font></td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(27,193)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">Exploration</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(3,983)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(775)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(4,758)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10" valign="bottom">
    <font SIZE="2">Earnings (loss) from operations</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">14,110</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">(7,168)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">(7,657)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">(3,731)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom">
    <font SIZE="2">(4,446)</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10"><font SIZE="2">
    Other income (expense)</font></td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-left: 26">Interest and other income</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">4,113</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">1,202</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">7,072</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">12,387</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10"><font SIZE="2">
    <p style="margin-left: 26">Interest and finance fees</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(459)</font></td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(23,784)</font></td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(24,243)</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-left: 26">Loss on impairment of investments</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">(53,879)</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">(53,879)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" valign="bottom">
    <font SIZE="2">Foreign exchange (loss) gain</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">(2,864)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">2,729</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">62</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom">
    <font SIZE="2">(73)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10" valign="bottom" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10"><font SIZE="2">
    Earnings (loss) before income taxes</font></td>
    <td align="right" valign="bottom"><font SIZE="2">
    <p style="margin-right: 4">14,900</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(3,237)</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(78,186)</font></td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom"><font SIZE="2">(3,731)</font></td>
    <td align="right" valign="bottom"><font SIZE="2">(70,254)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">Income tax (expense) recovery</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(287)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">(5,384)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">12,129</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">(b)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">446</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">6,904</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2; padding-left: 10" valign="bottom">
    <font SIZE="2"><b>Net earnings (loss)</b></font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">14,613</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">(8,621)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">(66,057)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">(3,285)</font></td>
    <td align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">(63,350)</font></td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10"><font SIZE="2">
    Earnings (loss) per share (Note 5)</font></td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" valign="bottom" style="padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-left: 26">Basic</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">
    <p style="margin-right: 4">0.03</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">(0.09)</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">(2.15)</font></td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" valign="bottom" bgcolor="#E9F1F8"><font SIZE="2">(0.31)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-bottom-style: solid; border-bottom-width: 2; padding-left: 10" valign="bottom">
    <font SIZE="2">
    <p style="margin-left: 26">Diluted</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">
    <p style="margin-right: 4">0.02</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">(0.09)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">(2.15)</font></td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-bottom-style: solid; border-bottom-width: 2" valign="bottom">
    <font SIZE="2">(0.31)</font></td>
  </tr>
  <tr>
    <td width="35%" style="border-top-style: solid; border-top-width: 1; padding-left: 10" valign="bottom" bgcolor="#E9F1F8">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td align="right" style="border-top-style: solid; border-top-width: 1" valign="bottom" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="35%" colspan="6" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2; padding-left: 10" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="text-indent: -26; margin-left: 26">Weighted average number of
    common shares (Note 5) <br>
    Basic and diluted</font></td>
    <td align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font SIZE="2">
    <p style="margin-right: 4">205,601</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="5"><b>New Gold Inc.</b></font></td>
    <td align="right" nowrap><font FACE="Times New Roman" SIZE="2"><b>Schedule 1</b></font></td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman"><b>Statement of operations of New Gold Inc.</b></font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman"><b>six months ended June 30, 2008</b></font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman" SIZE="2">(Expressed in thousands of
    dollars)</font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman" SIZE="2">(Unaudited)</font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td style="padding-left: 10">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Foreign</font></td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td style="padding-left: 10">&nbsp;</td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">New</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">exchange</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">New</font></td>
  </tr>
  <tr>
    <td style="padding-left: 10; border-bottom-style:solid; border-bottom-width:1">&nbsp;</td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Gold Inc.</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">rate</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Gold Inc</font></td>
  </tr>
  <tr>
    <td style="border-bottom-style: none; border-bottom-width: medium; padding-left: 10; border-top-style:solid; border-top-width:1">&nbsp;</td>
    <td width="15%" align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Cdn$</font></td>
    <td width="15%" align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-bottom-style: none; border-bottom-width: medium; border-top-style:solid; border-top-width:1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">US$</font></td>
  </tr>
  <tr>
    <td style="border-top-style: none; border-top-width: medium; padding-left: 10">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">Income</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Interest income</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,477</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,461</font></td>
  </tr>
  <tr>
    <td style="border-top-style: solid; border-top-width: 1; padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td style="padding-left: 10"><font FACE="Times New Roman" SIZE="2">Expenses</font></td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Amortization</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">15</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">15</font></td>
  </tr>
  <tr>
    <td style="padding-left: 10"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Foreign exchange gain</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">(17)</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">(17)</font></td>
  </tr>
  <tr>
    <td style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Administrative, office and miscellaneous</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1,908</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1,895</font></td>
  </tr>
  <tr>
    <td style="padding-left: 10"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Professional and regulatory fees</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,138</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,124</font></td>
  </tr>
  <tr>
    <td style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Travel, conferences, and promotion</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">207</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">206</font></td>
  </tr>
  <tr>
    <td style="padding-left: 10"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Wages, benefits and stock-based compensation</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">3,309</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">3,287</font></td>
  </tr>
  <tr>
    <td style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Impairment of investment</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">27,172</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">26,993</font></td>
  </tr>
  <tr>
    <td style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Interest and accretion</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">17,286</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">17,172</font></td>
  </tr>
  <tr>
    <td style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1; padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">52,018</font></td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">51,675</font></td>
  </tr>
  <tr>
    <td style="border-top-style: solid; border-top-width: 1; padding-left: 10">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">Loss before income taxes</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(49,541)</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(49,214)</font></td>
  </tr>
  <tr>
    <td style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">Income tax recovery</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,527</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">0.9934</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,510</font></td>
  </tr>
  <tr>
    <td style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2; padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2"><b>Net loss</b></font></td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(47,014)</font></td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(46,704)</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="5"><b>New Gold Inc.</b></font></td>
    <td align="right" nowrap><font FACE="Times New Roman" SIZE="2"><b>Schedule 2</b></font></td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman"><b>Statement of operations of New Gold Inc.</b></font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman"><b>year ended December 31, 2007</b></font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman" SIZE="2">(Expressed in thousands of
    dollars)</font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman" SIZE="2">(Unaudited)</font></td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td width="55%" style="padding-left: 10">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Foreign</font></td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10">&nbsp;</td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">New</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">exchange</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">New</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10">&nbsp;</td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Gold Inc</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">rate</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Gold Inc</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium; padding-left: 10">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">Cdn$</font></td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">US$</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-top-style: none; border-top-width: medium; padding-left: 10">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: none; border-top-width: medium">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">Income</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="55%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Interest income</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">6,579</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">7,072</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-top-style: solid; border-top-width: 1; padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">Expenses</font></td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Amortization</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">32</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">34</font></td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Foreign exchange gain</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">(58)</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">(62)</font></td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Administrative, office and miscellaneous</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">791</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">850</font></td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Professional and regulatory fees</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,946</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">3,167</font></td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Travel, conferences, and promotion</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">638</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">686</font></td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Wages, benefits and stock-based compensation</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,716</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right"><font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">2,920</font></td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Impairment of investments</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">50,120</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">53,879</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-left: 26">Interest and accretion</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">22,125</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">23,784</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2; padding-left: 10" bgcolor="#E9F1F8">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">79,310</font></td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">85,258</font></td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="55%" style="padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">Loss before income taxes</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(72,731)</font></td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(78,186)</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-bottom-style: solid; border-bottom-width: 1; padding-left: 10">
    <font FACE="Times New Roman" SIZE="2">Income tax recovery</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">11,283</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">1.0750</font></td>
    <td width="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman" SIZE="2">
    <p style="margin-right: 4">12,129</font></td>
  </tr>
  <tr>
    <td width="55%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2; padding-left: 10" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2"><b>Net loss</b></font></td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(61,448)</font></td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <p style="margin-right: 4">&nbsp;</td>
    <td width="15%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font FACE="Times New Roman" SIZE="2">(66,057)</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5><font FACE="Times New Roman" SIZE="3">
<p style="margin-left: 30"><b>Unaudited pro forma consolidated financial statements
of </b> </p>
</font><font FACE="Times New Roman" SIZE="6"><b>
<p style="margin-left: 30">New Gold Inc. </p>
</b></font>
<p>&nbsp;</p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5>
<font size="5"><b>
<p>New Gold Inc. <br>
</b></font><b>Notes to the pro forma consolidated financial statements <br>
June 30, 2008 </b> <br>
<font SIZE="2">(Unaudited) <br>
(Expressed in thousands of U.S. dollars, unless otherwise noted) </p>
<b>
<p>1.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Basis of presentation </p>
</b>
<p align="justify" style="margin-left: 30">On June 30, 2008, the transaction to
combine Metallic Resources Inc. (&quot;Metallica&quot;), New Gold Inc. (&quot;NGI&quot;) and Peak
Gold Ltd. (&quot;Peak Gold&quot;) closed, resulting in the combined company, New Gold Inc.
(&quot;New Gold&quot;). These unaudited pro forma consolidated financial statements have
been prepared in connection with the combination of Metallica, NGI and Peak
Gold. Peak Gold is the accounting acquirer. The unaudited pro forma consolidated
financial statements have been prepared for illustrative purposes only and give
effect to the transactions and assumptions described in Note 3 and Note 4 to
these pro forma consolidated financial statements. The unaudited pro forma
consolidated statements of operations for the six months ended June 30, 2008 and
for the year ended December 31, 2007 give effect to the transactions as if they
were completed at the beginning of the earliest period presented. </p>
<p align="justify" style="margin-left: 30">The pro forma consolidated financial
statements are not necessarily indicative of the operating results or financial
condition that would have been achieved if the transactions had been completed
on the dates or for the periods presented, nor do they purport to project the
results of operations or financial position of the consolidated entities for any
future period or as of any future date. The pro forma consolidated financial
statements do not reflect any special items such as integration costs or
operating synergies that may be incurred as a result of the acquisitions. </p>
<p align="justify" style="margin-left: 30">The pro forma adjustments and
allocations of the purchase price are based in part on estimates of the fair
value of assets acquired and liabilities to be assumed. The final purchase price
allocations will be completed after valuations are finalized as of the date of
the completion of the acquisitions. </p>
<p align="justify" style="margin-left: 30">In preparing the unaudited pro forma
consolidated statements of operations, the following historical information,
that was prepared in accordance with Canadian GAAP, was used: </p>
<p align="justify" style="margin-left: 30">(a) </p>
<p align="justify" style="margin-left: 60; margin-top: -25pt">the unaudited
interim consolidated financial statements of Peak Gold for the six months ended
June 30, 2008 and the audited consolidated financial statements for the thirteen
month period ended December 31, 2007; </p>
<p align="justify" style="margin-left: 30">(b) </p>
<p align="justify" style="margin-left: 60; margin-top: -25pt">the unaudited
interim consolidated financial statements of Metallica for the six months ended
June 30, 2008 and the audited consolidated financial statements for the year
ended December 31, 2007; and </p>
<p align="justify" style="margin-left: 30">(c) </p>
<p align="justify" style="margin-left: 60; margin-top: -25pt">the unaudited
interim financial statements of NGI for the six months ended June 30, 2008 and
the audited financial statements for the year ended December 31, 2007. </p>
<p align="justify" style="margin-left: 30">The unaudited pro forma consolidated
statement of operations should be read in conjunction with the December 31, 2007
audited financial statements including the notes thereto, as listed above. </p>
<p align="justify" style="margin-left: 30">The accounting policies used in
preparing the pro forma consolidated financial statements are set out in Peak
Gold&#146;s consolidated financial statements for the thirteen month period ended
December 31, 2007 and New Gold&#146;s consolidated interim financial statements for
the three and six months ended June 30, 2008. While management believes that
accounting policies of Metallica and New Gold are consistent in all material
respects, accounting policy differences may be identified upon consummation of
the proposed acquisitions. </p>
<p align="right">Page 3 </p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5></font>
<font size="5"><b>
<p>New Gold Inc. <br>
</b></font><b>Notes to the pro forma consolidated financial statements <br>
June 30, 2008 </b> <br>
<font SIZE="2">(Unaudited) <br>
(Expressed in thousands of U.S. dollars, unless otherwise noted) </p>
<b>
<p>2.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Conversion of historical
financial statements to U.S. dollars </p>
</b>
<p style="margin-left: 30">The unaudited pro forma consolidated financial
statements are presented in U.S. dollars and, accordingly, New Gold&#146;s unaudited
statement of operations for the six months ended June 30, 2008 and the statement
of operations for the year ended December 31, 2007 were converted from Canadian
dollars to U.S. dollars using the average exchange rate for the six month period
then ended and the year ended December 31, 2007. </p>
<p style="margin-left: 30">The exchange rates used for conversion to U.S.
dollars from Canadian dollars are as follows: </p>
<dir>
  </font>
</dir>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%" align="right"><font SIZE="2">$</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
    <td WIDTH="50%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="50%" bgcolor="#E9F1F8"><font SIZE="2">Average for the six months
    ended June 30, 2008</font></td>
    <td WIDTH="50%" align="right" bgcolor="#E9F1F8"><font SIZE="2">0.9934</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Average for the year ended December 31, 2007</font></td>
    <td WIDTH="50%" align="right"><font SIZE="2">1.0750</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>3.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Acquisition of Metallica and
New Gold </p>
</b>
<p align="justify" style="margin-left: 30">On June 30, 2008 New Gold Inc.,
Metallica Resources Inc. and Peak Gold Ltd. completed a business combination and
the acquisition of assets (the Transaction). In accordance with the provisions
of the Canadian Institute of Chartered Accountants (&quot;CICA&quot;) Handbook Section
1581, <i>Business Combinations, </i>Peak Gold has been identified as the
acquirer for accounting purposes. Following completion of the Transaction, Peak
Gold is now known as New Gold Inc. (&quot;New Gold&quot;). References to NGI in these
unaudited pro forma statements refer to transactions involving the
pre-transaction public company New Gold Inc. </p>
</font><i><font size="2">
<p align="justify" style="margin-left: 30">(a) </p>
<p align="justify" style="margin-left: 60; margin-top: -25pt">Metallica </p>
</font></i><font size="2">
<p align="justify" style="margin-left: 60">Shareholders of Metallica received
0.9 of a New Gold common share and nominal cash consideration for each one
common share of Metallica. As at June 30, 2008, there were 97,164,246 common
shares of Metallica outstanding. </p>
<p align="justify" style="margin-left: 60">The 87,447,821 common shares issued
to Metallica shareholders have been valued at $6.92 per share. The value per
share was determined with reference to the share price of New Gold common shares
for the two days prior to, the day of, and the two days subsequent to the date
of the announcement. </p>
<p align="justify" style="margin-left: 60">Holders of options, warrants or other
convertible instruments of Metallica (&quot;Metallica equity instruments&quot;) will
exchange such equity instruments for similar securities of New Gold at an
exchange ratio of 0.9 and at a price equivalent to the original price divided by
0.9. On June 30, 2008, there were Metallica equity instruments outstanding
providing the holders the right to acquire 19,687,855 common shares of Metallica
with a fair value of $53,968. Peak Gold has assumed that all options vest
immediately upon completion of the transaction. The business combination is
being accounted for as a purchase transaction. </p>
<p align="right">Page 4 </p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5></font>
<font size="5"><b>
<p>New Gold Inc. <br>
</b></font><b>Notes to the pro forma consolidated financial statements <br>
June 30, 2008 </b> <br>
<font SIZE="2">(Unaudited) <br>
(Expressed in thousands of U.S. dollars, unless otherwise noted) </p>
<b>
<p>3.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Acquisition of Metallica and
New Gold (continued) </p>
</b></font><i><font size="2">
<p style="margin-left: 30">(a) </p>
<p style="margin-left: 60; margin-top: -25pt">Metallica (continued) </p>
</font></i><font size="2">
<p align="justify" style="margin-left: 60">The Company expects the accounting
for the acquisition to result in the consideration given to be significantly in
excess of the carrying value of the net assets of Metallica. There is currently
diversity in the mining industry associated with certain aspects of the
accounting for business combinations and related goodwill. This diversity
includes how companies define Value Beyond Proven and Probable reserves (&quot;VBPP&quot;),
what an appropriate reporting unit is and how goodwill is allocated among
reporting units. The methods of allocating goodwill have included allocations
primarily to a single exploration reporting unit and allocations among
individual mine reporting units depending on the relevant circumstances. Peak
Gold has not completed its determination of the combined company&#146;s reporting
units nor its method of allocating goodwill, if any, to those reporting units.
The ultimate accounting for VBPP and goodwill may not be comparable to other
companies within the mining industry. </p>
<p align="justify" style="margin-left: 60">The allocation of the purchase price
has been based upon management&#146;s preliminary estimates and certain assumptions
with respect to the fair value increment associated with the assets to be
acquired and the liabilities to be assumed. The actual fair values of the assets
and liabilities will be determined as of the date of acquisition and may differ
materially from the amounts disclosed below in the assumed pro forma purchase
price allocation because of changes in fair values of the assets and liabilities
to the date of the transaction, and as further analysis (including of
identifiable intangible assets, for which no amounts have been estimated and
included in the preliminary amounts shown below) is completed. Consequently, the
actual allocation of the purchase price will likely result in different
adjustments than those in the unaudited pro forma consolidated statements of
operations. Following completion of the transaction, the earnings of the
combined company will reflect the impact of purchase accounting adjustments,
including the effect of changes in the cost bases of both tangible and
identifiable intangible assets and liabilities on production costs and
depreciation, depletion and amortization expense. </p>
<p align="justify" style="margin-left: 60">The Company will complete a full and
detailed valuation of the Metallica assets using an independent party.
Therefore, it is likely that the fair values of assets and liabilities acquired
will vary from those shown below and the differences may be material. </p>
<p align="justify" style="margin-left: 60">Transaction costs of $2,798 were
incurred by Peak Gold relating to the acquisition of Metallica. </p>
<p align="right">Page 5 </p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5></font>
<font size="5"><b>
<p>New Gold Inc. <br>
</b></font><b>Notes to the pro forma consolidated financial statements <br>
June 30, 2008 </b> <br>
<font SIZE="2">(Unaudited) <br>
(Expressed in thousands of U.S. dollars, unless otherwise noted) </p>
<b>
<p>3.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Acquisition of Metallica and
New Gold (continued) </p>
</b></font><i><font size="2">
<p style="margin-left: 30">(a) </p>
<p style="margin-left: 60; margin-top: -25pt">Metallica (continued) </p>
</font></i><font size="2">
<p style="margin-left: 60">The preliminary purchase price allocation is subject
to change and is summarized as follows: </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right"><font size="2">$</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" bgcolor="#E9F1F8"><font size="2">Purchase of Metallica
    shares (87,447,821 common shares)</font></td>
    <td WIDTH="48%" align="right" bgcolor="#E9F1F8"><font size="2">605,139</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">Fair value of options and warrants acquired</font></td>
    <td WIDTH="48%" align="right"><font size="2">53,968</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">Transaction costs</font></td>
    <td WIDTH="48%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">2,798</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">Purchase consideration</font></td>
    <td WIDTH="48%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">661,905</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">The purchase price was allocated as follows:</font></td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right"><font size="2">$</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" bgcolor="#E9F1F8"><font size="2">Net working capital
    acquired (including cash of $34,154)</font></td>
    <td WIDTH="48%" align="right" bgcolor="#E9F1F8"><font size="2">
    <p style="margin-right: 4">20,525</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">Mineral property, plant and equipment</font></td>
    <td WIDTH="48%" align="right"><font size="2">
    <p style="margin-right: 4">656,345</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" bgcolor="#E9F1F8"><font size="2">Other long-term assets</font></td>
    <td WIDTH="48%" align="right" bgcolor="#E9F1F8"><font size="2">
    <p style="margin-right: 4">2,214</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">Long-term liabilities</font></td>
    <td WIDTH="48%" align="right"><font size="2">(2,671)</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">Future income tax liability</font></td>
    <td WIDTH="48%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">(144,872)</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-top-style: solid; border-top-width: 1">
    <font size="2">Net identifiable assets</font></td>
    <td WIDTH="48%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font size="2">
    <p style="margin-right: 4">531,541</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">Goodwill</font></td>
    <td WIDTH="48%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">
    <p style="margin-right: 4">130,364</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">&nbsp;</td>
    <td WIDTH="48%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">
    <p style="margin-right: 4">661,905</font></td>
  </tr>
</table>
</font><i><font SIZE="2">
<p style="margin-left: 30">(b)</p>
<p style="margin-left: 60; margin-top: -25pt">New Gold Inc. (&quot;NGI&quot;) </p>
</font></i><font SIZE="2">
<p align="justify" style="margin-left: 60">Shareholders of Peak Gold received
0.1 of a New Gold common share and nominal cash consideration for each one
common share of Peak Gold. As at June 30, 2008, there were 874,324,730 common
shares of Peak Gold outstanding. </p>
<p align="justify" style="margin-left: 60">Holders of options, warrants or other
convertible instruments of Peak Gold (&quot;Peak Gold equity instruments&quot;) will
exchange such equity instruments for similar securities of New Gold at an
exchange ratio of 0.1 and at a price equivalent to the original price divided by
0.1. On June 30, 2008, there were Peak Gold equity instruments outstanding
providing the holders the right to acquire 321,045,607 common shares of Peak
Gold. </p>
<p align="justify" style="margin-left: 60">In accordance with the determination
that Peak Gold is the accounting acquirer in this transaction the deemed
consideration will be the current market value of the NGI common shares
currently outstanding and the fair value of options, warrants and convertible or
exchangeable securities of NGI currently outstanding. As at June 30, 2008 there
were currently outstanding 37,005,717 common shares of NGI and options,
warrants, convertible or exchangeable securities and other rights to acquire and
aggregate of 30,678,500 common shares of NGI. The value ascribed to the
transaction will be the share price of NGI on the closing of the transaction.
</p>
<p align="right">Page 6 </p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5></font>
<font size="5"><b>
<p>New Gold Inc. <br>
</b></font><b>Notes to the pro forma consolidated financial statements <br>
June 30, 2008 </b> <br>
<font SIZE="2">(Unaudited) <br>
(Expressed in thousands of U.S. dollars, unless otherwise noted) </p>
<b>
<p>3.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Acquisition of Metallica and
New Gold (continued) </p>
</b></font><i><font size="2">
<p style="margin-left: 30">(b) </p>
<p style="margin-left: 60; margin-top: -25pt">New Gold Inc. (&quot;NGI&quot;) (continued)
</p>
</font></i><font size="2">
<p align="justify" style="margin-left: 60">The transaction will be accounted for
as a purchase of assets and assumption of liabilities of NGI by Peak Gold. The
Company will complete a full and detailed valuation of the fair value of the net
assets of NGI using an independent third party. The allocation of the purchase
price is based upon management&#146;s preliminary estimates and certain assumptions
with respect to the fair value increment associated with the assets to be
acquired and the liabilities to be assumed. The actual fair values of the assets
and liabilities will be determined as of the date of acquisition and may differ
materially from the amounts disclosed below in the assumed pro forma purchase
price allocation because of changes in fair values of the assets and liabilities
to the date of the transaction, and as further analysis (including of
identifiable intangible assets, for which no amounts have been estimated and
included in the preliminary amounts shown above) is completed. Consequently, the
actual allocation of the purchase price may result in different adjustments than
those in the unaudited pro forma consolidated statement of operations. Following
completion of the transaction, the earnings of the combined company will reflect
the impact of purchase accounting adjustments, including the effect of changes
in the cost bases of both tangible and identifiable intangible assets and
liabilities on production costs and depreciation, depletion and amortization
expense. </p>
<p align="justify" style="margin-left: 60">Transaction costs of $3,224 were
incurred by Peak Gold relating to the acquisition of NGI. </p>
<p align="justify" style="margin-left: 60">The preliminary purchase price
allocation is subject to change and is summarized as follows: </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right"><font size="2">$</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" bgcolor="#E9F1F8"><font size="2">Purchase of New Gold shares
    (37,005,717 common shares)</font></td>
    <td WIDTH="48%" align="right" bgcolor="#E9F1F8"><font size="2">289,538</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">Fair value of options and warrants acquired</font></td>
    <td WIDTH="48%" align="right"><font size="2">65,656</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">Estimated transaction costs</font></td>
    <td WIDTH="48%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">3,224</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">Purchase consideration</font></td>
    <td WIDTH="48%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">358,418</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">The purchase price was allocated as follows:</font></td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right"><font size="2">$</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%">&nbsp;</td>
    <td WIDTH="48%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" bgcolor="#E9F1F8"><font size="2">Net working capital
    acquired (including cash of $103,564)</font></td>
    <td WIDTH="48%" align="right" bgcolor="#E9F1F8"><font size="2">
    <p style="margin-right: 4">87,931</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">Other assets</font></td>
    <td WIDTH="48%" align="right"><font size="2">
    <p style="margin-right: 4">94,629</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" bgcolor="#E9F1F8"><font size="2">Mineral properties, plant
    and equipment</font></td>
    <td WIDTH="48%" align="right" bgcolor="#E9F1F8"><font size="2">
    <p style="margin-right: 4">538,287</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%"><font size="2">Long-term liabilities</font></td>
    <td WIDTH="48%" align="right"><font size="2">(252,892)</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" bgcolor="#E9F1F8"><font size="2">Future income tax liability</font></td>
    <td WIDTH="48%" align="right" bgcolor="#E9F1F8"><font size="2">(87,933)</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">Convertible debentures</font></td>
    <td WIDTH="48%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">(21,604)</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 60">&nbsp;</td>
    <td WIDTH="47%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">&nbsp;</td>
    <td WIDTH="48%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2" bgcolor="#E9F1F8">
    <font size="2">
    <p style="margin-right: 4">358,418</font></td>
  </tr>
</table>
<p align="right">Page 7 </p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5></font>
<font size="5"><b>
<p>New Gold Inc. <br>
</b></font><b>Notes to the pro forma consolidated financial statements <br>
June 30, 2008 </b> <br>
<font SIZE="2">(Unaudited) <br>
(Expressed in thousands of U.S. dollars, unless otherwise noted) </p>
<b>
<p>4.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Effect of transactions on the
pro forma consolidated financial statements </p>
</b>
<p style="margin-left: 30">The pro forma consolidated financial statements
incorporate the following pro forma assumptions: </p>
</font><i><font size="2">
<p style="margin-left: 30">(a) </p>
<p style="margin-left: 60; margin-top: -25pt">Metallica assumptions </p>
</font></i><font size="2">
<p align="justify" style="margin-left: 60">This pro forma adjustment represents
the estimated increase to depreciation, depletion and amortization expense of
$4,984 for the period ended June 30, 2008 and $3,731 for the year ended December
31, 2007 associated with the preliminary fair value adjustment of approximately
$545,669 allocated to mineral property, plant and equipment. Peak Gold has not
completed an assessment of the fair values of assets and liabilities and the
related business integration plans and synergies. The ultimate purchase price
allocation will include possible adjustments to the fair values of depreciable
tangible assets, proven and probable reserves, reserves related to current
development projects, VBPP and intangible assets after a full review has been
completed. The concept of VBPP is described in Emerging Issue Committee,
Abstract -152, <i>Mining Assets-Impairment and Business Combinations, </i>(&quot;EIC
152&quot;) and has been interpreted differently by mining companies. The preliminary
adjustment to plant, equipment and development costs, as discussed below,
includes VBPP attributable to mineralized material that Peak Gold believes could
be brought into production should market conditions warrant. Mineralized
material is a mineralized body that has been delineated by appropriately spaced
drilling and/or underground sampling to support reported tonnage and average
grade of metals. Such a deposit may not qualify as proven and probable reserves
until legal and economic feasibility are concluded based upon a comprehensive
evaluation of unit costs, grade, recoveries and other material factors. The
preliminary adjustments to mineral property, plant, equipment and development
costs do not include adjustments attributable to inferred mineral resources or
exploration potential referred to in the EIC 152. Peak Gold intends to allocate
a portion of the purchase price to all VBPP, including inferred mineral
resources and exploration potential, in accordance with EIC 152 after performing
a more thorough analysis to determine the fair value of these assets. </p>
<p align="justify" style="margin-left: 60">The preliminary allocation of
$545,669 to mineral property, plant, equipment and development costs is
primarily based on a fair value assessment of estimated cash flows. Peak Gold
has not completed an assessment of the fair values of assets and liabilities and
the related business integration plans and synergies. The ultimate purchase
price allocation will include possible adjustments to fair values of depreciable
tangible assets, proven and probable reserves, reserves related to current
development projects, mill and leach stockpiles, product inventories, VBPP and
intangible assets after a full review has been completed. </p>
<p align="justify" style="margin-left: 60">For the purpose of preparing the
unaudited pro forma consolidated statements of operations, Peak Gold used the
unit production method to estimate depreciation and depletion over the lifetime.
Additionally, for each $100,000 that the final fair value of property, plant,
equipment and development costs differs from the pro forma fair value, related
depreciation, depletion and amortization expense would increase or decrease by
approximately $2,000 annually, assuming the unit of production method is used.
</p>
<p align="right">Page 8 </p>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5></font>
<font size="5"><b>
<p>New Gold Inc. <br>
</b></font><b>Notes to the pro forma consolidated financial statements <br>
June 30, 2008 </b> <br>
<font SIZE="2">(Unaudited) <br>
(Expressed in thousands of U.S. dollars, unless otherwise noted) </p>
<b>
<p>4.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>Effect of transactions on the
pro forma consolidated financial statements (continued) </p>
</b></font><i><font size="2">
<p style="margin-left: 30">(b) </p>
<p style="margin-left: 60; margin-top: -25pt">Other assumptions </p>
</font></i><font size="2">
<p align="justify" style="margin-left: 60">Adjustments to the pro forma
statements of operations have an associated tax effect when it is appropriate.
All tax effects have been calculated using substantively enacted tax rates in
effect during the period for which a statement of operations is provided. </p>
<b>
<p>5.</b> </p>
<p style="margin-left: 30; margin-top: -25pt"><b>New Gold shares outstanding and
loss per share </p>
</b>
<p style="margin-left: 30">The average number of shares used in the computation
of pro forma basic and diluted earnings (loss) per share has been determined as
follows: </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%">&nbsp;</td>
    <td WIDTH="27%" align="right"><font size="2">June 30,</font></td>
    <td WIDTH="27%" align="right"><font size="2">December 31,</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2"><i>(in thousands)</i></font></td>
    <td WIDTH="27%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">2008</font></td>
    <td WIDTH="27%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font size="2">2007</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="27%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="27%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%"><font size="2"><i>Basic and diluted</i></font></td>
    <td WIDTH="27%" align="right">&nbsp;</td>
    <td WIDTH="27%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%">&nbsp;</td>
    <td WIDTH="27%" align="right">&nbsp;</td>
    <td WIDTH="27%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%" bgcolor="#E9F1F8"><font size="2">Weighted average number of
    shares of</font></td>
    <td WIDTH="27%" align="right" bgcolor="#E9F1F8">&nbsp;</td>
    <td WIDTH="27%" align="right" bgcolor="#E9F1F8">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%" bgcolor="#E9F1F8"><font size="2">&nbsp;&nbsp;&nbsp; New Gold
    outstanding for the period</font></td>
    <td WIDTH="27%" align="right" bgcolor="#E9F1F8"><font size="2">36,964</font></td>
    <td WIDTH="27%" align="right" bgcolor="#E9F1F8"><font size="2">30,721</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%"><font size="2">Issued to acquire Metallica</font></td>
    <td WIDTH="27%" align="right"><font size="2">87,448</font></td>
    <td WIDTH="27%" align="right"><font size="2">87,448</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">Issued to acquire Peak Gold</font></td>
    <td WIDTH="27%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">87,432</font></td>
    <td WIDTH="27%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E9F1F8">
    <font size="2">87,432</font></td>
  </tr>
  <tr>
    <td WIDTH="1%">
    <p style="margin-left: 30">&nbsp;</td>
    <td WIDTH="45%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">Pro forma basic weighted average shares</font></td>
    <td WIDTH="27%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">211,844</font></td>
    <td WIDTH="27%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 2">
    <font size="2">205,601</font></td>
  </tr>
</table>
<p align="right">Page 9 </p>
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