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<SEC-DOCUMENT>0001204459-08-002247.txt : 20081114
<SEC-HEADER>0001204459-08-002247.hdr.sgml : 20081114
<ACCEPTANCE-DATETIME>20081113194113
ACCESSION NUMBER:		0001204459-08-002247
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20080930
FILED AS OF DATE:		20081114
DATE AS OF CHANGE:		20081113

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:		081186660

	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>ngd111208f6k.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: 14pt; 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 November 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">
&nbsp;</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 &quot;Yes&quot; 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 style="border-collapse: collapse" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <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 align="left" width="1%">
    <p style="margin-right: 15px"><font size="2">By: </font></td>
    <td style="border-bottom: 1px solid" width="50%"><font size="2">/s/ Basil
    Huxham</font></td>
  </tr>
  <tr>
    <td width="49%">&nbsp;</td>
    <td align="left" width="1%">
    <p style="margin-right: 15px"><font size="2">Name:&nbsp;&nbsp; </font></td>
    <td style="border-top: 1px solid; border-bottom: medium none" width="50%">
    <font size="2">Basil Huxham</font></td>
  </tr>
  <tr>
    <td width="49%">&nbsp;</td>
    <td align="left" width="1%">
    <p style="margin-right: 15px"><font size="2">Title: </font></td>
    <td style="border-top: medium none" width="50%"><font size="2">Executive
    Vice President and Chief Financial Officer</font></td>
  </tr>
  <tr>
    <td width="50%" colSpan="2"><font size="2">Date: November 12, 2008</font></td>
    <td style="border-top: medium none" width="50%">&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 style="border-collapse: collapse" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <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"><font size="2">&nbsp;</font></td>
    <td width="86%" bgColor="#e9f1f8"><font size="2">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="14%" bgColor="#e9f1f8"><font size="2">
    <a href="exh991.htm" style="text-decoration: none">99.1</a></font></td>
    <td width="86%" bgColor="#e9f1f8">
    <p style="color: #000000; text-indent: 0pt; margin-left: 0pt; margin-top: 0pt; margin-bottom: 0pt; padding: 0pt" align="left">
    <font size="2"><a href="exh991.htm" style="text-decoration: none">Third
    Quarter 2008 Financial Statements</a></font></td>
  </tr>
  <tr>
    <td width="14%"><font size="2">&nbsp;</font></td>
    <td width="86%"><font size="2">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="14%"><font size="2">
    <a href="exh992.htm" style="text-decoration: none">99.2&nbsp;</a></font></td>
    <td width="86%"><font size="2">
    <a href="exh992.htm" style="text-decoration: none">Third Quarter 2008 Management's Discussion &amp; Analysis</a></font></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="exh993.htm" style="text-decoration: none">99.3</a></font></td>
    <td width="86%" bgcolor="#E9F1F8"><font size="2">
    <a href="exh993.htm" style="text-decoration: none">CEO Certification</a></font></td>
  </tr>
  <tr>
    <td width="14%">&nbsp;</td>
    <td width="86%">&nbsp;</td>
  </tr>
  <tr>
    <td width="14%"><font size="2">
    <a href="exh994.htm" style="text-decoration: none">99.4</a></font></td>
    <td width="86%"><font size="2">
    <a href="exh994.htm" style="text-decoration: none">CFO Certification</a></font></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">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exh991.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>

<HTML>
<HEAD>
   <TITLE>New Gold Inc.: Exhibit 99.1 - Prepared by TNT Filings Inc.</TITLE>
</HEAD>

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<A name="page_1"></A>

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</div>

<P align="justify">
&nbsp;</P>

<P align="justify">
&nbsp;</P>

<P align="justify">
&nbsp;</P>

<P align="justify" style="margin-left: 40%">
<font size="4">Interim consolidated financial statements of</font></P>
<P align="justify" style="margin-left: 40%">
<B><font size="6">New Gold Inc.</font></B></P>
<P align="justify" style="margin-left: 40%">
<font size="4">September 30, 2008</font><font size="3"><br>
</font>(Unaudited)</P>
<P align="justify" style="margin-left: 30%">
&nbsp;</P>
<P align="justify" style="margin-left: 30%">
&nbsp;</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_2"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left>
&nbsp;</TD>
	<TD>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
<B><font size="5">New Gold Inc.</font></B><font size="5"> </font>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
<font size="4">September 30, 2008 </font>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
<font size="4">Table of contents </font>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Consolidated statements of operations and comprehensive income (loss)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
Consolidated balance sheets
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
2
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Consolidated statements of shareholders' equity
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
3
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
Consolidated statements of cash flows
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
4
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Notes to the consolidated financial statements
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
5-35
	</TD>
</TR>
</TABLE><BR>

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<A name="page_3"></A>

<P align="justify">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Consolidated statements of operations and comprehensive income (loss)
<br>
Three and nine months ended September 30<br>
</font>(Expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</P>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
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	<TD align=left width="36%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>Three months</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Three months
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>Nine months</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Ten months
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="36%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>ended</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
ended
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>ended</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
ended
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="36%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
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	<TD align=left bgcolor="#FFFFFF">
&nbsp;
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<B>&#36;</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Revenues
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width="12%">
<B>63,384</B>
	</TD>
	<TD align=left width=2%>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width="12%">
44,663
	</TD>
	<TD align=left width=2%>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width="12%">
<B>159,101</B>
	</TD>
	<TD align=left width=2%>
&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=12%>
84,105
	</TD>
	<TD align=left width=2%>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Operating expenses
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
<B>(44,248</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(24,662
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(108,880</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(49,951
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
Depreciation and depletion
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>(9,666</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
(13,258
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>(23,726</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
(22,739
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 Earnings from mine operations
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>9,470</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
6,743
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>26,495</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
11,415
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Corporation administration (i)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>(8,334</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(2,814
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>(15,557</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(8,173
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Exploration
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(3,472</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(1,317
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(5,689</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(2,224
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
 Write-down of mineral interests&nbsp;(Note 8 (b))
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>(165,252</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<p align="right">-
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>(165,252</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<p align="right">-</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
(Loss) earnings from operations
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(167,588</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
2,612
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(160,003</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
1,018
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Other income (expense)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Interest and other income
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>1,123</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
1,250
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>4,445</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
2,915
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp;Interest and finance fees
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(592</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
(6
	</TD>
	<TD align=left>
)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(1,139</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
(91
	</TD>
	<TD align=left>
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
 &nbsp;Gain (loss) on foreign exchange
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>15,507</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(1,063
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>14,333</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(894
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
(Loss) earnings before taxes
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(151,550</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
2,793
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(142,364</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
2,948
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
Income and mining taxes
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>2,698</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(1,613
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>(1,450</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(3,111
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
 <B>Net (loss) earnings and</B>&nbsp;<B>comprehensive (loss) income</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>(148,852</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
1,180
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>(143,814</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(163
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
(Loss) earnings per share
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp;Basic
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>(0.70</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
0.00
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>(1.14</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(0.00
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
 &nbsp;Diluted
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>(0.70</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
0.00
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>(1.14</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(0.00
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Weighted average number of
shares outstanding (in thousands)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Basic
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>212,199</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
72,578
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>126,321</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
47,626
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
 &nbsp;Diluted
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>212,199</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
72,646
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>126,321</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
47,626
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
</TABLE>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left width="36%" bgcolor="#FFFFFF">
 (i) Stock option expense (a&nbsp;non-cash item included in&nbsp;corporation administration)
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
<B>(2,534</B>
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
(1,031
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
)
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
<B>(5,712</B>
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
(5,115
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
)
	</TD>
</TR>
</TABLE>&nbsp;<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font SIZE="2">See accompanying notes to the unaudited consolidated
    financial statements.</font></td>
    <td align="right" nowrap><font SIZE="2">Page 1</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
</table>
<P align="justify">
<p>
</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_4"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF" colspan="7">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF" colspan="7">
<B><font size="5">New Gold Inc.</font></B></TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF" colspan="7">
<font size="4">Consolidated balance sheets
&nbsp; </font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
(Expressed in thousands of U.S. dollars)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
(Unaudited)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
December 31,
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="68%" style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="68%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
<B>Assets</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Current assets
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; &nbsp;Cash and cash equivalents
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>251,131</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
149,924
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Short-term investments
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=center bgcolor="#FFFFFF">
<p align="right">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
32,440
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; &nbsp;Accounts receivable
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>27,168</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
18,123
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Inventories and stockpiled ore (Note 6)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>43,998</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
39,792
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
 &nbsp; &nbsp;Prepaid expenses and other
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>5,967</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
1,624
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>328,264</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
241,903
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Investments (Note 7)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>87,645</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Mining interests (Note 8)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>1,414,775</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
315,831
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Intangible royalty asset
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>14,100</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
14,664
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Goodwill
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>130,951</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
Other assets
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>3,511</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
- -
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>1,979,246</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
572,398
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
<B>Liabilities</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Current liabilities
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; &nbsp;Accounts payable and accrued liabilities
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>59,339</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
22,835
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Short-term borrowings
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>8,611</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
 &nbsp; &nbsp;Income and mining taxes payable
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=center style="border-bottom:1px solid #000000;">
<p align="right">
<B>-</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
4,960
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>67,950</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
27,795
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Reclamation and closure cost obligations
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>23,310</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
18,036
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Future income and mining taxes
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>242,884</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
25,943
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Long-term debt (Note 9)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>244,029</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
Employee benefits and other
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>4,051</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
3,253
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>582,224</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
75,027
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
<B>Shareholders' equity</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Common shares
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>1,318,845</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
339,796
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Special warrants (Note 10 (b))
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=center bgcolor="#FFFFFF">
<p align="right">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
104,166
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Contributed surplus
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>25,749</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
6,166
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Share purchase warrants (Note 10 (e))
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>185,068</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
57,673
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Equity component of convertible debentures
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>21,604</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Accumulated other comprehensive loss
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(1,566</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(1,566
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
Deficit
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>(152,678</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
(8,864
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>(154,244</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(10,430
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>1,397,022</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
497,371
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>1,979,246</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
572,398
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
</TABLE><BR>
<P align="justify">
<TABLE style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111" cellpadding="0" cellspacing="0"><TR><TD nowrap>
Commitments and contingencies (Note 13)<BR>
<BR>
Approved by the Board<BR>
<BR>
<u>
<B><I>(Signed) Robert Gallagher&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </I></B>
</u><BR>
Robert Gallagher, Director<BR>
<BR>
<u>
<B><I>(Signed) Craig Nelsen&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </I></B>
</u><BR>
Craig Nelsen, Director</TD></TR></TABLE>
</P>
</P>

<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font SIZE="2">See accompanying notes to the unaudited consolidated
    financial statements.</font></td>
    <td align="right" nowrap><font SIZE="2">Page 2</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
</table>

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&nbsp;</TD>
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<B><font size="5">New Gold Inc.</font></B></TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left colspan=25 bgcolor="#FFFFFF">
<font size="4">Consolidated statements of shareholders' equity</font></TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=25 bgcolor="#FFFFFF">
<font size="4">Nine months ended September 30, 2008</font></TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left colspan=25 bgcolor="#FFFFFF">
(Expressed in thousands of U.S. dollars, except share amounts)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan="25">
(Unaudited)</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<font style="font-size: 10pt">
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=center style="font-size: 9pt" bgcolor="#FFFFFF">
<p align="right"><font style="font-size: 9pt">Equity </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">Accumulated </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="22%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left width="7%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left width=7% style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left width="7%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD align=left width=1% style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left width="7%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD align=left width=1% style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right width="7%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">Share </font></font>
	</TD>
	<TD align=right width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right width="7%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">component&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right width=7% style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">other </font>
	</TD>
	<TD align=left width=1% style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right width="7%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">(Deficit) </font>
	</TD>
	<TD align=left width=1% style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right width="7%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">Total </font>
	</TD>
	<TD align=left width=1% style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="22%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD width="1%" style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left width="7%" style="border-bottom:1px solid #000000; font-size:9pt" colspan="3" bgcolor="#FFFFFF">
<p align="right"><font style="font-size: 9pt">&nbsp;
Common shares
	</font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">Special </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">Contributed </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">purchase </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">of convertible </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">comprehensive </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">retained </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">shareholders' </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">Shares </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">Amount </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">warrants </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">surplus </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">warrants </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">debentures </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">loss </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">earnings </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">equity </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&#36; </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR>
	<TD colspan=25 style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<B><font style="font-size: 9pt">Balance, November 30, 2006</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">11,505,140 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">25,313 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">104,166 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">59 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">(1,566 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">(23,477 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">104,495</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<p align="left" style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Issued for cash in private placement (Net of issue costs of &#36;14,248) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">43,500,000 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">209,689 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">57,673 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">267,362</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Issued for acquisition </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">16,000,000 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">103,253 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">103,253</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Exercise of options </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">129,000 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">175 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">(49 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">126</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Exercise of warrants </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">1,495,000 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">1,366 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">1,366</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Stock-based compensation </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">6,156 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">6,156</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Net loss </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">14,613 </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">14,613</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Balance, December 31, 2007 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">72,629,140 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">339,796 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">104,166 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">6,166 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">57,673 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">(1,566 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">(8,864 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">497,371</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Exercise of special warrants </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">14,772,333 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">80,448 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">(104,166 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">23,718 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=center style="font-size: 9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">-</font></B><font style="font-size: 9pt"> </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Exercise of options </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">424,090 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">3,022 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">(11 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">3,011</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Exercise of warrants </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">150,795 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">902 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">(412 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">490</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Acquisition of Metallica (Note 5 (a)(i)) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">87,447,821 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">605,139 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">5,641 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">46,674 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">657,454</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Acquisition of NGI (Note 5 (a)(ii)) </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">37,005,717 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">289,538 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">8,241 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">57,415 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">21,604 </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">376,798</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Stock-based compensation </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">5,712 </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="font-size: 9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">5,712</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="font-size: 9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<p style="text-indent: -15; margin-left: 15">
<font style="font-size: 9pt">Net loss </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">(143,814 </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">(143,814</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#e9f1f8">
<B><font style="font-size: 9pt">)</font></B><font style="font-size: 9pt"> </font>
</font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<p style="text-indent: -15; margin-left: 15">
<B><font style="font-size: 9pt">Balance, September 30, 2008</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">212,429,896 </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">1,318,845 </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">- </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">25,749 </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">185,068 </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">21,604 </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">(1,566 </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">(152,678 </font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">) </font>
	</TD>
	<TD style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font>	</TD>
	<TD align=right style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<B><font style="font-size: 9pt">1,397,022</font></B><font style="font-size: 9pt">
</font>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000; font-size:9pt" bgcolor="#FFFFFF">
<font style="font-size: 9pt">&nbsp; </font></font>
	</TD>
</TR>
</TABLE>&nbsp;<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font SIZE="2">See accompanying notes to the unaudited consolidated
    financial statements.</font></td>
    <td align="right" nowrap><font SIZE="2">Page 3</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
</table>
<P align="justify">
<p>
</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_6"></A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF" colspan="13">
 &nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF" colspan="13">
 <font size="5">&nbsp;<B>New Gold Inc.</B> </font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left colspan=13 bgcolor="#FFFFFF">
 <font size="4">&nbsp;Consolidated statements of cash flows </font>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=13 bgcolor="#FFFFFF">
 <font size="4">&nbsp;Three and nine months ended September 30 </font>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF" colspan="13">
 &nbsp;(Expressed in thousands of U.S. dollars)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF" colspan="13">
 &nbsp;(Unaudited)
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right colspan=3 bgcolor="#FFFFFF">
<B>Three months</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Three months
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>Nine months</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Ten months
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>ended</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
ended
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>ended</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
ended
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right colspan=3 bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#E9F1F8">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp;<B>Operating activities</B>
	</TD>
	<TD width=2% bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left width="12%" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left width=2% bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD width=2% bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left width=12% bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left width=2% bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD width=2% bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left width="12%" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left width=2% bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD width=2% bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left width="12%" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left width=2% bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="36%" bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Net (loss) earnings
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
<B>(148,852</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
1,180
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(143,814</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(163
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="36%" bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Items not involving cash
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Reclamation expenditure
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
735
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
1,455
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=center>
<p align="left" style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Unrealized foreign exchange
(gain) loss
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(10,975</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1,671
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(10,620</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
2,312
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Depreciation and depletion
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>9,666</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
13,258
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>23,726</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
22,739
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Stock option expense
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>2,534</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1,031
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>5,712</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
5,115
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Future income and mining taxes
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(16,356</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(1,457
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(12,955</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(1,589
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Write-down of mineral interests
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>165,252</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>165,252</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Other
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>521</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
217
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>786</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
554
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Change in non-cash working capital (Note 11)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>(12,249</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(8,812
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>(23,139</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(16,375
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>(10,459</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
7,823
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>4,948</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
14,048
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#E9F1F8">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp;<B>Investing activities</B>
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Mining interests
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(53,906</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(8,001
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(70,723</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(16,309
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Cash acquired in business combination and asset acquisition (Note 5 (a))
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
- -
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>134,195</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
- -
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Acquisition, net of cash (Note 5 (b))
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>-</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>-</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(189,759
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>(53,906</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(8,001
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>63,472</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(206,068
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#FFFFFF">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp;<B>Financing activities</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Common shares issued on exercise of warrants/options
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>1,817</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
24
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>1,847</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1,412
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Share issue costs
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(123
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(123
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Common shares issued in private placement, net
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
- -
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
267,514
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Proceeds from short-term borrowing
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>4,500</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>8,500</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Repayment of short-term borrowings
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(10,000</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>(10,000</B>
	</TD>
	<TD align=left>
<B>)</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Proceeds from marketable securities
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>-</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>32,440</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>(3,683</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(99
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>32,787</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
268,803
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#FFFFFF">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp;(Decrease) increase in cash and cash equivalents
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(68,048</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(277
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>101,207</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
76,783
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp;Cash and cash equivalents, beginning of period
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>319,179</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
77,388
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>149,924</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
328
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp;<B>Cash and cash equivalents, end of period</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>251,131</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
77,111
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>251,131</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
77,111
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#E9F1F8">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 <p style="text-indent: -52; margin-left: 52">&nbsp;Cash and cash equivalents are comprised of
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Cash
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>37,592</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
6,758
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>37,592</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
6,758
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
 <p style="text-indent: -52; margin-left: 52">&nbsp; &nbsp; &nbsp;Short-term money market instruments
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>213,539</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
70,353
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
<B>213,539</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
70,353
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<p style="text-indent: -52; margin-left: 52">&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>251,131</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
77,111
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>251,131</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
77,111
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=3>
 &nbsp;Supplemental cash flow information (Note 11)
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
</TABLE>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
  <tr>
    <td><font SIZE="2">See accompanying notes to the unaudited consolidated
    financial statements.</font></td>
    <td align="right" nowrap><font SIZE="2">Page 4</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right" nowrap>&nbsp;</td>
  </tr>
</table>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_7"></A>

<P align="justify">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</P>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
<B>1.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD colspan=2>
<P align="justify"><B>Description of business and nature of operations</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD colspan=2>
<P align="justify">On June 30, 2008 New Gold Inc. (&#147;NGI&#148;), Metallica Resources Inc. (&#147;Metallica&#148;) and Peak Gold Ltd. (&#147;Peak Gold&#148; or the &#147;Company&#148;) completed a business combination and the acquisition of
assets (the &#147;Transaction&#148; see Note 5). In accordance with the provisions of the Canadian Institute of Chartered Accountants (&#147;CICA&#148;) Handbook Section 1581, <I>Business Combinations</I>, Peak Gold has been identified as the
acquirer for accounting purposes. As such, these interim consolidated financial statements are a continuation of the consolidated financial statements of Peak Gold, with the comparative information being that of Peak Gold. Following completion of
the Transaction, Peak Gold is now known as New Gold Inc. (&#147;New Gold&#148;). References to NGI in these consolidated interim financial statements refer to transactions involving the pre- transaction public company New Gold Inc.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD colspan=2>
<P align="justify">In connection with the Transaction shareholders of Peak Gold exchanged one common share of Peak Gold for 0.1 of a New Gold common share and nominal cash consideration. All information related to common shares for the current and
prior period has been restated to give effect to this share exchange.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD colspan=2>
<P align="justify">The Company is a gold producer engaged in gold mining and related activities including acquisition, exploration, extraction, processing and reclamation. The Company&#146;s assets are comprised of the Amapari mine in Brazil, the
Cerro San Pedro mine in Mexico, and the Peak mine in Australia. Significant development projects include the New Afton copper-gold project in Canada and a 30% interest in an advanced stage copper-gold project in Chile.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD colspan=2>
<P align="justify"><B>Summary of significant accounting policies</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD colspan=2>
<P align="justify">These unaudited interim consolidated financial statements have been prepared by the Company in accordance with Canadian generally accepted accounting principles (&#147;Canadian GAAP&#148;). The preparation of financial data is
based on accounting principles and practices consistent with those used in the preparation of the audited annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the Company&#146;s
audited consolidated financial statements for the thirteen month period ended December 31, 2007, as they do not contain all disclosures required by Canadian GAAP for annual financial statements.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top width="5%">
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
<P align="justify"><I>Basis of presentation and principles of consolidation</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD>
<P align="justify">These unaudited interim consolidated financial statements include the accounts of the Company and all of its subsidiaries. In the opinion of the management, all adjustments (including normal recurring adjustments) necessary to
present fairly the financial position as at September 30, 2008 and results of operations and comprehensive income (loss), shareholders&#146; equity and cash flows for all periods presented, have been made.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 5</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_8">
<p align="left">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Summary of significant accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD nowrap valign=top width="5%">
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Basis of presentation and principles of consolidation (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The principal subsidiaries of the Company as of September 30, 2008 are as follows:</P>
	</TD>
</TR>
</TABLE>
&nbsp;<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left width=79% style="border-bottom:1px solid #000000;">
Subsidiary
	</TD>
	<TD width=2% style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right width=14% style="border-bottom:1px solid #000000;">
Interest
	</TD>
	<TD align=left width=4% style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=4>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width=79%>
Metallica Resources Inc. <SUP>(1)</SUP>
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14%>
100
	</TD>
	<TD align=left width=4%>
%
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=79%>
Metallica Resources Alaska Inc. <SUP>(1)</SUP>
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14%>
100
	</TD>
	<TD align=left width=4%>
%
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width=79%>
Minera Metallica Resources Chile Limitada <SUP>(1)</SUP>
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14%>
100
	</TD>
	<TD align=left width=4%>
%
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=79%>
Minera San Xavier, S.A. de C.V. <SUP>(1)</SUP>
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14%>
100
	</TD>
	<TD align=left width=4%>
%
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width=79%>
Minera&ccedil;&atilde;o Pedra Branca do Amapari Ltda (&#147;Amapari&#148;)
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14%>
100
	</TD>
	<TD align=left width=4%>
%
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=79%>
Peak Gold Mines Pty
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14%>
100
	</TD>
	<TD align=left width=4%>
%
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width=79%>
Sociedad Contractual Minera El Morro <SUP>(1)</SUP>
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD align=right width=14%>
100
	</TD>
	<TD align=left width=4%>
%
	</TD>
</TR>
</TABLE>
</div>
<div align="right">
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="90%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
<SUP>(1)</SUP>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">These subsidiaries are included in the Company&#146;s results from June 30, 2008, the date of acquisition, onward (Note 5 (b)).</P>
	</TD>
</TR>
</TABLE>
</div>
<P align="justify" style="margin-left: 10%">
Variable interest entities (&#147;VIE&#146;s&#148;) as defined by the Accounting Standards Board in Accounting Guideline (&#147;AcG&#148;) 15, Consolidation of Variable Interest Entities, are entities in which equity investors do not have the
characteristics of a &#147;controlling financial interest&#148; or there
is not sufficient equity at risk for the
entity to finance its activities without additional subordinated
financial support. VIE&#146;s are subject to consolidation by the primary beneficiary who will absorb the majority of the entities&#146; expected losses and/or expected residual returns. The Company has determined that it does not have any
investments that qualify as VIE&#146;s.</P>
<P style="margin-left: 10%">
All intercompany transactions and balances are eliminated.</P>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Use of estimates</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#242424">The preparation </FONT><FONT color="#383838">of </FONT><FONT color="#242424">consolidated financial statements in </FONT><FONT color="#383838">conformity </FONT><FONT color="#242424">with Canadian GAAP
</FONT><FONT color="#383838">requires </FONT><FONT color="#242424">the Company&#146;s management to make </FONT><FONT color="#383838">estimates </FONT><FONT color="#242424">and assumptions </FONT><FONT color="#383838">about </FONT><FONT color="#242424">future events that affect the amounts reported in </FONT><FONT color="#0e0e0e">the </FONT><FONT color="#242424">consolidated financial statements and related notes </FONT><FONT color="#0e0e0e">to </FONT><FONT color="#242424">the
financial statements. Actual results may differ from those </FONT><FONT color="#383838">estima</FONT><FONT color="#0e0e0e">tes.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#242424">Significant estimates used in the preparation of these interim consolidated financial statements </FONT><FONT color="#0e0e0e">include, </FONT><FONT color="#242424">but are not limited to, the recoverability
</FONT><FONT color="#383838">of accounts </FONT><FONT color="#242424">receivable and </FONT><FONT color="#383838">investments, </FONT><FONT color="#242424">the </FONT><FONT color="#383838">quantities </FONT><FONT color="#242424">of material on leach
pads and in circuit, the proven and probable ore reserves and resources </FONT><FONT color="#383838">and </FONT><FONT color="#242424">the related depletion </FONT><FONT color="#383838">and </FONT><FONT color="#242424">amortization, the </FONT><FONT color="#383838">estimated </FONT><FONT color="#242424">tonnes of waste material to be mined and the </FONT><FONT color="#383838">estimated </FONT><FONT color="#242424">recoverable tonnes </FONT><FONT color="#383838">of ore </FONT><FONT color="#242424">from </FONT><FONT color="#383838">each </FONT><FONT color="#242424">mine area, the </FONT><FONT color="#383838">estimated </FONT><FONT color="#242424">net </FONT><FONT color="#383838">realizable value of </FONT><FONT color="#242424">inventories, the </FONT><FONT color="#383838">accounting </FONT><FONT color="#242424">for </FONT><FONT color="#383838">stock-based compensation, the </FONT><FONT color="#242424">provision for </FONT><FONT color="#383838">income and
</FONT><FONT color="#242424">mining </FONT><FONT color="#0e0e0e">taxes </FONT><FONT color="#383838">and composition of </FONT><FONT color="#242424">future </FONT><FONT color="#383838">income </FONT><FONT color="#242424">and mining </FONT><FONT color="#383838">tax assets and liabilities, </FONT><FONT color="#242424">the </FONT><FONT color="#383838">expected economic lives of and the estimated future operating </FONT><FONT color="#242424">results </FONT><FONT color="#383838">and net
</FONT><FONT color="#0e0e0e">cash </FONT><FONT color="#242424">flows from mining </FONT><FONT color="#383838">interests, </FONT><FONT color="#242424">the anticipated </FONT><FONT color="#383838">costs of reclamation and closure cost obligations,
</FONT><FONT color="#242424">the fair </FONT><FONT color="#383838">value of assets and liabilities acquired </FONT><FONT color="#242424">in </FONT><FONT color="#383838">business combinations and goodwill.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 6</P>

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<A name="page_9">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Summary of significant accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(c)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Cash and cash equivalents</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#242424">Cash </FONT><FONT color="#383838">and cash equivalents </FONT><FONT color="#242424">include </FONT><FONT color="#383838">cash, and </FONT><FONT color="#242424">those short-term money market instruments that
</FONT><FONT color="#383838">are </FONT><FONT color="#242424">readily </FONT><FONT color="#383838">convertible </FONT><FONT color="#242424">to </FONT><FONT color="#383838">cash with </FONT><FONT color="#0e0e0e">an </FONT><FONT color="#242424">original term </FONT><FONT color="#383838">of </FONT><FONT color="#242424">less than 90 days.</FONT></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(d)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Inventories and stockpiled ore</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">Finished goods, work-in-process, heap leach ore and stockpiled ore are valued at the lower of average production cost or net realizable value. Production costs include the cost of raw materials, direct labor, mine-site overhead
expenses and depreciation and depletion of mining interests. Supplies are valued at the lower of average costs or replacement cost.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The recovery of gold and silver from certain oxide ores is achieved through the heap leaching process. Under this method, ore is placed on leach pads where it is treated with a chemical solution which dissolves the gold contained
ore. The resulting &#147;pregnant&#148; solution is further processed in a plant where the gold is recovered. For accounting purposes, costs are added to ore on leach pads on current mining and leaching costs, including applicable depreciation,
depletion and amortization relating to mining interests. Costs are removed from ore on leach pads as ounces of gold and silver are recovered based on the average cost per recoverable ounce on the leach pad.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Estimates of recoverable gold on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tonnes added to the leach pads), the grade of ore placed on the leach pads (based on assay data), and a
recovery percentage (based on ore type). Although the quantities of recoverable gold and silver placed on each leach pad are reconciled by comparing the grades of ore placed on the leach pad to the quantities actually recovered, the nature of the
leaching process inherently limits the ability to precisely monitor inventory levels. The ultimate recovery of gold and silver from the leach pad is not known until the leaching process has concluded at the end of the mine life.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(e)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Mining interests</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Mining interests represent capitalized expenditures related to the development of mining properties, related plant and equipment and expenditures related to exploration arising from property acquisitions. Capitalized costs are
depreciated and depleted using either a unit-of-production method over the estimated economic life of the mine to which they relate, or for plant and equipment, using the straight-line method over their estimated useful lives.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 7</P>

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<A name="page_10">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Summary of significant accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(e)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Mining interests (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The costs associated with mining properties are separately allocated to reserves, resources and exploration potential, and include acquired interests in production, development and exploration stage properties representing the
fair value at the time they were acquired. The value associated with resources and exploration potential is the value beyond proven and probable reserves assigned through acquisition. The value allocated to reserves is depreciated on a
unit-of-production method over the estimated recoverable proven and probable reserves at the mine. The resource value represents the property interests that are believed to potentially contain economic mineralized material such as inferred material
within pits; measured, indicated, and inferred resources with insufficient drill spacing to qualify as proven and probable reserves; and inferred resources in close proximity to proven and probable reserves. Exploration potential represents the
estimated mineralized material contained within (i) areas adjacent to existing reserves and mineralization located within the immediate mine area; (ii) areas outside of immediate mine areas that are not part of measured, indicated, or inferred
resources; and (iii) greenfields exploration potential that is not associated with any other production, development, or exploration stage property, as described above. At least annually or when otherwise appropriate, and subsequent to its review
and evaluation for impairment, value from the non-depletable category is transferred to the depletable category as a result of an analysis of the conversion of resources or exploration potential into reserves.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Costs related to property acquisitions are capitalized until the viability of the mineral property is determined. When it is determined that a property is not economically recoverable the capitalized costs are written off.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Exploration costs incurred to the date of establishing that a property is economically recoverable are included in operations. Further development expenditures are capitalized to the property.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Drilling and related costs incurred on sites without an existing mine and on areas outside the boundary of a known mineral deposit which contains proven and probable reserves are exploration expenditures and are expensed as
incurred to the date of establishing that property costs are economically recoverable. Further development expenditures, subsequent to the establishment of economic recoverability, are capitalized to the property.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Upon sale or abandonment the cost of the property and equipment, and related accumulated depreciation or depletion, are removed from the accounts and any gains or losses thereon are included in operations.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company reviews and evaluates its mining properties for impairment annually or when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Impairment is considered to exist if the
total estimated future undiscounted cash flows are less than the carrying amount of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on expected future
production, commodity prices, operating costs and capital costs.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 8</P>

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<A name="page_11">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Summary of significant accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(f)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Reclamation and closure cost obligations</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company&#146;s mining and exploration activities are subject to various governmental laws and regulations relating to the protection of the environment. These environmental regulations are continually changing and are
generally becoming more restrictive. The Company has made, and intends to make in the future, expenditures to comply with such laws and regulations. The Company has recorded a liability and corresponding asset for the estimated future cost of
reclamation and closure, including site rehabilitation and long-term treatment and monitoring costs, discounted to net present value. Such estimates are, however, subject to change based on negotiations with regulatory authorities, or changes in
laws and regulations.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(g)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Intangible royalty asset</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Intangible assets consist of a royalty agreement between Amapari and a third party, valued upon acquisition (Note 5 (b)). The agreement arose from the initial purchase of the Amapari mine leases. Under the agreement, the Company
receives 1% of gross revenues from iron ore mined by the third party on adjacent properties. The asset is amortized on a units-of-production basis which is measured by a portion of the third party mine&#146;s economically recoverable and proven ore
reserves recovered during the period.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company reviews and evaluates the intangible annually or when events or changes in circumstances indicate the carrying amount may not be recoverable.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(h)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Goodwill</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#222222">Acquisitions are accounted for using the purchase method whereby assets and liabilities acquired are recorded at their fair values as of the date of acquisition and any excess of the purchase price over such
fair value of tangible and intangible net assets is recorded as goodwill. Goodwill is identified and allocated to reporting units. Goodwill is not amortized.</FONT></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#222222">The Company evaluates, on an annual basis, the carrying amount of goodwill to determine whether current events and circumstances indicate that the carrying amount may no longer be recoverable. To accomplish
this evaluation, the Company estimates the fair value of its reporting units that include goodwill and compares those fair values to the reporting units&#146; carrying amounts. If the carrying value of a reporting unit exceeds its fair value, the
Company compares the implied fair value of the reporting unit&#146;s goodwill to its carrying amount, and any excess of the carrying value over the fair value is charged to operations. Assumptions underlying fair value estimates are subject to
significant risks and uncertainties.</FONT></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(i)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Income and mining taxes</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#222222">The Company uses the liability method of </FONT><FONT color="#353535">accounting </FONT><FONT color="#222222">for income </FONT><FONT color="#353535">and </FONT><FONT color="#222222">mining taxes.
</FONT><FONT color="#353535">Under </FONT><FONT color="#222222">the liability method</FONT><FONT color="#4b4b4b">, </FONT><FONT color="#222222">future tax assets </FONT><FONT color="#353535">and </FONT><FONT color="#222222">liabilities are
recognized for the future tax </FONT><FONT color="#353535">consequences </FONT><FONT color="#222222">attributable to differences between the financial </FONT><FONT color="#353535">statement carrying amounts of existing assets </FONT><FONT color="#222222">and liabilities </FONT><FONT color="#353535">and </FONT><FONT color="#222222">their </FONT><FONT color="#353535">respective </FONT><FONT color="#222222">tax </FONT><FONT color="#353535">bases </FONT><FONT color="#222222">and
</FONT><FONT color="#353535">for </FONT><FONT color="#222222">tax </FONT><FONT color="#353535">losses and other </FONT><FONT color="#222222">deductions </FONT><FONT color="#353535">carried forward. Upon business </FONT><FONT color="#222222">acquisitions, the </FONT><FONT color="#353535">liability method results </FONT><FONT color="#222222">in </FONT><FONT color="#353535">a gross-</FONT><FONT color="#222222">up </FONT><FONT color="#353535">of </FONT><FONT color="#222222">mining </FONT><FONT color="#353535">interests </FONT><FONT color="#222222">to reflect the </FONT><FONT color="#353535">recognition </FONT><FONT color="#222222">of the </FONT><FONT color="#353535">future </FONT><FONT color="#222222">tax liabilities for the </FONT><FONT color="#353535">tax effect of such differences.</FONT></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 9</P>

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<A name="page_12">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Summary of significant accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(i)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Income and mining taxes (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#353535">Future </FONT><FONT color="#222222">tax </FONT><FONT color="#353535">assets and </FONT><FONT color="#222222">liabilities </FONT><FONT color="#353535">are </FONT><FONT color="#222222">measured u</FONT><FONT color="#4b4b4b">sing </FONT><FONT color="#353535">enacted or substantively </FONT><FONT color="#222222">enacted tax </FONT><FONT color="#353535">rates expected to apply when the asset is realized or </FONT><FONT color="#222222">the liability
</FONT><FONT color="#353535">settled. A reduction in </FONT><FONT color="#222222">r</FONT><FONT color="#4b4b4b">espect </FONT><FONT color="#353535">of </FONT><FONT color="#222222">the </FONT><FONT color="#353535">benefit of a </FONT><FONT color="#222222">future tax </FONT><FONT color="#353535">asset (a valuation allowance) </FONT><FONT color="#222222">is </FONT><FONT color="#353535">recorded against any future </FONT><FONT color="#222222">tax </FONT><FONT color="#353535">asset if
</FONT><FONT color="#222222">it is not more lik</FONT><FONT color="#4b4b4b">ely </FONT><FONT color="#353535">than not </FONT><FONT color="#222222">to </FONT><FONT color="#353535">be realized. The effect on </FONT><FONT color="#222222">future tax
</FONT><FONT color="#353535">assets and </FONT><FONT color="#222222">liabilities </FONT><FONT color="#353535">of a change in tax rates is recognized in income in the period in which the change </FONT><FONT color="#222222">is </FONT><FONT color="#353535">substantively enacted.</FONT></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(j)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Employee benefits</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured
reliably. Liabilities recognized in respect of employee benefits expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Liabilities recognized in respect of employee benefits which are not expected to be settled within one year are measured at the present value of the estimated future cash outflows to be made by the Company in respect of services
provided by employees up to reporting date.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(k)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Foreign currency translation</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Effective April 1, 2007 the Company determined that a change in its functional currency had occurred. The functional currency changed from the Canadian dollar (&#147;Cdn&#36;&#148;) to the U.S. dollar (&#147;US&#36;&#148;). The
change was necessary due to the acquisition of Amapari and Peak Mines (Note 5 (b)). Revenues and direct costs are now principally denominated in U.S dollars. Accordingly, results for the Company would be more fairly reflected by adopting the US&#36;
as the Company&#146;s functional currency. The Company has also adopted the US&#36; as its reporting currency.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The comparative figures for the year ended November 30, 2006 were translated using the current method of translation. Under this method, the statement of operations and the cash flow statement items were translated into the
reporting currency using the rates in effect at the date of the transactions, effectively the average exchange rate of US&#36;1.00 = Cdn&#36;1.1415 for the period. Assets and liabilities were translated at the November 30, 2006 year-end rate of
US&#36;1.00 = Cdn1.1369. All resulting exchange differences are reported in accumulated other comprehensive income, a separate component of shareholders&#146; equity.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#222222">All operations </FONT><FONT color="#353535">outside of Canada apply the US&#36; as their reporting and measurement currency and </FONT><FONT color="#222222">therefore </FONT><FONT color="#353535">translate
</FONT><FONT color="#222222">their operating </FONT><FONT color="#353535">results using </FONT><FONT color="#222222">the temporal method. Under this method, </FONT><FONT color="#353535">foreign currency monetary assets and </FONT><FONT color="#222222">liabilities </FONT><FONT color="#353535">are </FONT><FONT color="#222222">translated into </FONT><FONT color="#353535">US&#36; at </FONT><FONT color="#222222">the </FONT><FONT color="#353535">exchange </FONT><FONT color="#222222">rates prevailing </FONT><FONT color="#353535">at </FONT><FONT color="#222222">the balance </FONT><FONT color="#353535">sheet </FONT><FONT color="#222222">date; non-monetary </FONT><FONT color="#353535">assets denominated </FONT><FONT color="#222222">in foreign </FONT><FONT color="#353535">currencies are </FONT><FONT color="#222222">tran</FONT><FONT color="#4b4b4b">s</FONT><FONT color="#222222">lated using the rate of </FONT><FONT color="#353535">exchange at </FONT><FONT color="#222222">the </FONT><FONT color="#353535">transaction </FON
T><FONT color="#222222">date; </FONT><FONT color="#353535">and foreign exchange gains </FONT><FONT color="#222222">and losses </FONT><FONT color="#353535">are </FONT><FONT color="#222222">included in the determination of </FONT><FONT color="#353535">earnings. </FONT><FONT color="#222222">In </FONT><FONT color="#353535">addition, </FONT><FONT color="#222222">unrealiz</FONT><FONT color="#4b4b4b">e</FONT><FONT color="#222222">d gains </FONT><FONT color="#353535">and </FONT><FONT color="#222222">losses due to movements </FONT><FONT color="#353535">in exchange </FONT><FONT color="#222222">rates </FONT><FONT color="#353535">on cash balances </FONT><FONT color="#222222">held in foreign </FONT><FONT color="#353535">currencies </FONT><FONT color="#222222">are </FONT><FONT color="#353535">shown separately </FONT><FONT color="#222222">on </FONT><FONT color="#353535">the consolidated </FONT><FONT color="#222222">statements </FONT><FONT color="#353535">of cash </FONT><FONT color="#222222">flows.</FONT></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 10</P>

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<A name="page_13">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Summary of significant accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(k)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Foreign currency translation (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify"><FONT color="#0f0f0f">Monetary assets and </FONT><FONT color="#272727">liabilities </FONT><FONT color="#0f0f0f">are translated at exchange rates prevailing at the balance sheet date. All other assets, liabilities, revenues and
expenses arising </FONT><FONT color="#272727">in </FONT><FONT color="#0f0f0f">foreign currencies are translated at the exchange rates prevailing at the date of the transactions; the resulting gains or losses on foreign exchange are included in the
results of operations.</FONT></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(l)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Earnings (loss) per share</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Earnings (loss) per share calculations are based on the weighted average number of common shares and common shares equivalents issued and outstanding during the year. Diluted earnings per share are calculated using the treasury
method which requires the calculation of diluted earnings per share by assuming that outstanding stock options, warrants and convertible debentures with an average market price that exceeds the average exercise prices of the options and warrants for
the period, are exercised and the assumed proceeds are used to repurchase shares of the Company at the average market price of the common share for the period.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(m)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Revenue recognition</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Revenue from the sale of metals is recognized in the accounts when persuasive evidence of an arrangement exists, title and risk passes to buyer, collection is reasonably assured and the price is reasonably determinable. Revenue
from the sale of metals in concentrate may be subject to adjustment upon final settlement of estimated metal prices, weights and assays. Adjustments to revenue for metal prices are recorded monthly and other adjustments are recorded on final
settlement. Refining and treatment charges are netted against revenue for sales of metal concentrate.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(n)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Stock-based compensation</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company applies the fair value method of accounting for all stock option awards. Under this method the Company recognizes a compensation expense for all stock options awarded to employees, based on the fair value of the
options on the date of grant which is determined by using the Black-Scholes option pricing model. The fair value of the options is expensed over the vesting period of the options.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(o)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Financial instruments - recognition and measurement</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Effective December 1, 2006, the Company adopted the new accounting standards,</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify"><I>Financial Instruments - Recognition and Measurement </I>(&#147;Section 3855&#148;), <I>Financial Instruments - Disclosure and Presentation </I>(&#147;Section 3861&#148;) and <I>Hedges </I>(&#147;Section 3865&#148;) that were
issued by the CICA. This accounting policy change was adopted on a retrospective basis with no restatement of prior period financial statements. The new standard and accounting policy change is as follows:</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 11</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_14">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=3>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>2.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Summary of significant accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(o)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Financial instruments - recognition and measurement (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">In accordance with this new standard, the Company now classifies all financial instruments as either held-to-maturity, available-for-sale, held for trading, loans and receivables, or other financial liabilities. Financial assets
held to maturity, loans and receivables and financial liabilities other than those held for trading, are measured at amortized cost. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other
comprehensive income. Instruments classified as held for trading are measured at fair value with unrealized gains and losses recognized on the statement of operations.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">Upon adoption of this new standard, the Company designated its cash and cash equivalents and short-term investments as held-for-trading, which is measured at fair value. The Company has designated its asset backed commercial paper
(&#147;ABCP&#148;) as available-for-sale, which is measured at fair value and unrealized gains and losses are recognized in other comprehensive income. Receivables are classified as loans and receivables, which are measured at amortized cost.
Accounts payable and accrued liabilities, short-term borrowings and long-term debt are classified as other financial liabilities, which are measured at amortized cost.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(p)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Comprehensive income</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">Effective December 1, 2006, the Company adopted the new accounting standard related to comprehensive income (&#147;Section 1530&#148;) that was issued by the CICA. The new standard and accounting policy change is as follows:</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">Comprehensive income is the change in shareholders&#146; equity during a period from transactions and other events and circumstances from non-owner sources. In accordance with this new standard, the Company now reports a statement
of comprehensive income and a new category, accumulated other comprehensive income, in the shareholders&#146; equity section of the consolidated balance sheet. The components of this new category may include unrealized gains and losses on financial
assets classified as available-for-sale, exchange gains and losses arising from the translation of financial statements of a self-sustaining foreign operation and the effective portion of the changes in fair value of cash flow hedging
instruments.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B>3.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Changes in accounting policies</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Accounting policies implemented effective January 1, 2008</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>
<TD nowrap valign=top width="5%">
(i)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Capital disclosures and financial instruments - Disclosures and presentation</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company adopted three new presentation and disclosure standards that were issued by the CICA: Handbook Section 1535, <I>Capital Disclosures </I>(&#147;Section 1535&#148;), Handbook Section 3862, <I>Financial Instruments -
Disclosures </I>(&#147;Section 3862&#148;) and Handbook Section 3863, <I>Financial Instruments - Presentation </I>(&#147;Section 3863&#148;).</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 12</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_15">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=3>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>3.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Changes in accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Accounting policies implemented effective January 1, 2008 (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>
<TD nowrap valign=top width="5%">
(i)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Capital disclosures and financial instruments - Disclosures and presentation (continued)</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Section 1535 requires the disclosure of both qualitative and quantitative information that enables users of financial statements to evaluate the entity&#146;s objectives, policies and processes for managing capital. Section 1535
specifies the disclosure of (i) an entity&#146;s objectives, policies and processes for managing capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has complied with any capital requirements; and (iv)
if it has not complied, the consequences of such non-compliance.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Sections 3862 and 3863 replace Handbook Section 3861, <I>Financial Instruments - Disclosure and Presentation</I>, revising and enhancing its disclosure requirements and carrying forward unchanged its presentation requirements for
financial instruments. Sections 3862 and 3863 place increased emphasis on disclosures about the nature and extent of risks arising from financial instruments and how the entity manages those risks.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD nowrap valign=top>
(ii)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Inventories</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">On January 1, 2008, the Company adopted Section 3031, <I>Inventories</I>, which replaces the existing Section 3030, and establishes standards for the measurement and disclosure of inventories. The new standard provides more
extensive guidance on the determination of cost, including allocation of overhead, requires impairment testing and expands the disclosure requirements. The adoption of Section 3031 did not have a material impact on the Company&#146;s consolidated
financial position and results of operations for the period ended September 30, 2008.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Accounting policies to be implemented effective January 1, 2009</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">Goodwill and intangibles</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">Effective January 1, 2009, the Company will adopt Section 3064, <I>Goodwill and Intangible Assets</I>, which replaces Section 3062, and establishes revised standards for recognition, measurement, presentation and disclosure of
goodwill and intangible assets. Concurrent with the introduction of this standard, the CICA restricted the application of EIC 27, <I>Revenues and Expenditures in the Pre-operating Period</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">(&#147;EIC 27&#148;). As a result, the Company will not be able to defer costs and revenues incurred prior to commercial production at new mine operations.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 13</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_16">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>3.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Changes in accounting policies (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(c)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>International Financial Reporting Standards</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">In February 2008, the CICA announced that Canadian generally accepted accounting principles (&#147;GAAP&#148;) for publicly accountable enterprises will be replaced by International Financial Reporting Standards (&#147;IFRS&#148;)
for fiscal years beginning on or after January 1, 2011. The conversion from Canadian GAAP to IFRS will be applicable to the Company&#146;s reporting for the first quarter of 2011 for which the current and comparative information will be prepared
under IFRS. The Company expects the transition to IFRS to impact accounting policies, financial reporting, IT systems and processes as well as certain business activities. The Company is currently in the process of developing an IFRS changeover
plan. This process involves assessing the impact of the transition to IFRS and planning to ensure that the appropriate resources are available for a timely conversion.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B>4.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Financial instruments</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, market risk and other price
risks. Where material, these risks are reviewed and monitored by the Board of Directors.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Capital risk management</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">In the management of capital, the Company includes the components of shareholders&#146; equity, short-term borrowings and long-term debt, as well as the cash and cash equivalents and short-term and long-term investments.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may
attempt to issue new shares, issue new debt, acquire or dispose of assets or sell its investments.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">In order to facilitate the management of its capital requirements, the Company prepares annual budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry
conditions. The annual and updated budgets are approved by the Board of Directors.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Prior to June 30, 2008, the Company&#146;s investment policy was to invest its cash in highly liquid, lower risk short-term interest-bearing investments with maturities of 120 days or less at the original date of acquisition,
selected with regards to the expected timing of expenditures from continuing operations.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 14</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_17">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>4.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Financial instruments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Capital risk management (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">Upon completion of the Transaction, the Company adopted a new investment policy. Going forward, the Company must invest its funds in investments with a minimum credit rating at the time of purchase of R-1 (high) from the Dominion
Bond Rating Service (&#147;DBRS&#148;) or an equivalent rating from Standards &amp; Poor and Moody&#146;s. At all times, more than 50% of the aggregate amount of permitted investments must be invested in treasury bills, bonds, notes and other
indebtedness of Canada or the Provinces of British Columbia, Alberta and Ontario. All investments must have a maximum term to maturity of six months and the average term will generally range from seven days to 90 days. Under the new policy, the
Company is no longer permitted to invest in asset backed commercial paper (&#147;ABCP&#148;) (Note 7) or auction rate securities (&#147;ARS&#148;).</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company expects its current capital resources will be sufficient to carry its exploration and development plans and operations through its current reporting period.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company has long-term note indentures (Note 9) that contain a general covenant that the Company shall work diligently toward obtaining and, once obtained, maintaining in good standing, all permits required for the operation of
its properties.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Credit risk</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Credit risk is the risk of an unexpected loss if a party to its financial instrument fails to meet its contractual obligations.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company&#146;s financial assets are primarily composed of cash and cash equivalents, investments and accounts receivable. Credit risk is primarily associated with trade receivables and investments; however it also arises on
cash and cash equivalents.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">To mitigate exposure to credit risk, the Company has established policies to limit the concentration of credit risk, to ensure counterparties demonstrate minimum acceptable worthiness, and to ensure liquidity of available
funds.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company closely monitors its financial assets and does not have any significant concentration of credit risk. The Company sells its gold exclusively to large international organizations with strong credit ratings. The
Company&#146;s revenue is comprised of gold sales for four customers. These customers are large international organizations with strong credit ratings.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The historical level of customer defaults is minimal and, as a result, the credit risk associated with gold and copper concentrate trade receivables at September 30, 2008 is not considered to be high.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 15</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_18">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>4.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Financial instruments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD nowrap valign=top width="5%">
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Credit risk (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The aging of trade receivables at the reporting date was as follows:</P>
	</TD>
</TR>
</TABLE>
&nbsp;<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left width="22%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="1%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
0-30
	</TD>
	<TD width="1%" bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right width=12% bgcolor="#FFFFFF">
31-60
	</TD>
	<TD width="1%" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
61-90
	</TD>
	<TD width="1%" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
91-120
	</TD>
	<TD width="1%" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=12% bgcolor="#FFFFFF">
Over
	</TD>
	<TD width="1%" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="22%" style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="1%" style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
days
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
days
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
days
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
days
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
120
days</TD>
	<TD style="border-bottom:3px double #000000;" align="right" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>Total</B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="22%">
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
<B>&#36;</B>
	</TD>
</TR>
<TR>
	<TD colspan=13>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="22%">
Corporate
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
<B>-</B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="22%">
Amapari
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
<B>-</B>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="22%">
Peak Mines
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
8,092
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
2,547
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
2,165
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
8,580
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
<B>21,384</B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="22%">
New Afton
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
<B>-</B>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="22%" style="border-bottom:3px double #000000;">
Cerro San Pedro
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
<B>-</B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="22%" style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
- -
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
8,092
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
2,547
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
2,165
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
8,580
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>21,384</B>
	</TD>
</TR>
</TABLE>
</div>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
&nbsp;</TD>
</TR>
<TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">A significant portion of the Company&#146;s cash and cash equivalents are held in large Canadian financial institutions. Short term investments (including those presented as part of cash and cash equivalents) are composed of
financial instruments issued by Canadian banks and companies with high investment-grade ratings.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company employs a restrictive investment policy (Note 4 (a)) as detailed in the capital risk management section.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(c)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Liquidity risk</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure and financial leverage as outlined
in Note 4 (a).</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The following are the contractual maturities of debt commitments. The amounts presented represent the future undiscounted principal and interest cash flows and therefore do not equate to the carrying amounts on the consolidated
balance sheet.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Less than
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
After
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>Total</B>
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
1
year&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
1-3 years
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
4-5 years
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
5 years
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>&#36;</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
</TR>
<TR>
	<TD colspan=11>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left width="35%">
Long-term debt
	</TD>
	<TD width="1%">
&nbsp;	</TD>
	<TD align=right width="12%">
<B>275,502</B>
	</TD>
	<TD width="1%">
&nbsp;	</TD>
	<TD align=right width="12%">
- -
	</TD>
	<TD width="1%" align="right">
&nbsp;	</TD>
	<TD align=right width="12%">
- -
	</TD>
	<TD width="1%" align="right">
&nbsp;	</TD>
	<TD align=right width="12%">
- -
	</TD>
	<TD width="1%" align="right">
&nbsp;	</TD>
	<TD align=right width="12%">
275,502
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width="35%" style="border-bottom:3px double #000000;">
 Interest payable
on long-term debt
	</TD>
	<TD width="1%" style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right width="12%" style="border-bottom:3px double #000000;">
<B>216,816</B>
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
24,956
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
49,911
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
49,911
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
92,038
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>492,318</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
24,956
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
49,911
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
49,911
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
367,540
	</TD>
</TR>
</TABLE>
</div>
<P align="right">
Page 16</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_19">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=3>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>4.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Financial instruments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(d)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Currency risk</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">The Company operates in Australia, Brazil, Canada, Chile, Mexico and the United States. As a result, the Company has foreign currency exposure with respect to items denominated in foreign currencies. The three main types of
foreign exchange risk of the Company can be categorized as follows:</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD nowrap valign=top>
(i)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Transaction exposure</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company&#146;s operations sell and incur costs in different currencies. This mismatch of currencies creates transitional exposure at the operational level, which may affect the Company&#146;s profitability as exchange rates
fluctuate. The Company has not hedged its exposure to currency fluctuations.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD nowrap valign=top>
(ii)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Translation exposure</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company&#146;s functional and reporting currency is U.S. dollars. The Company&#146;s operations translate their operating results from its host currency to U.S. dollars. Therefore, exchange rate movements in the U.S. dollar,
Brazilian real, Mexican peso, Australian dollar and Canadian dollar can have a significant impact on the Company&#146;s consolidated operating results. Some of the Company&#146;s earnings translation exposure is offset by interest on foreign
currency denominated loans and debt.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">A 10% strengthening (weakening) of the U.S. dollar against the following currencies would have decreased (increased) the Company&#146;s net loss from these financial instruments by the amounts shown below.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="85%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
2008
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
&#36;
	</TD>
</TR>
<TR>
	<TD colspan=3>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Canadian dollar
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
22,109
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left>
Australian dollar
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
266
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Mexican peso
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
47
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;">
Brazilian real
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
459
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
22,881
	</TD>
</TR>
</TABLE>
</div>
<P align="right">
Page 17</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_20">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=3>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>4.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Financial instruments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(d)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Currency risk (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD nowrap valign=top>
(iv)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Exposure to currency risk</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company is exposed to currency risk through the following assets and liabilities denominated in currencies other than the U.S. dollar: cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities
and short-term and long-term debt. The currencies of the Company&#146;s financial instruments, based on notional amounts, were as follows:</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="85%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Canadian
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Australian
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Mexican
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Brazilian
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
dollar
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
dollar
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
peso
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
real
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=13 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 Cash and cash&nbsp;equivalents
	</TD>
	<TD width="1%">
&nbsp;	</TD>
	<TD align=right width="12%">
57,799
	</TD>
	<TD align=left width="1%">
&nbsp;
	</TD>
	<TD width="1%">
&nbsp;	</TD>
	<TD align=right width="12%">
15,591
	</TD>
	<TD align=left width="1%">
&nbsp;
	</TD>
	<TD width="1%">
&nbsp;	</TD>
	<TD align=right width="12%">
7,466
	</TD>
	<TD align=left width="1%">
&nbsp;
	</TD>
	<TD width="1%">
&nbsp;	</TD>
	<TD align=right width="12%">
7,059
	</TD>
	<TD align=left width="1%">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Accounts receivable
	</TD>
	<TD width="1%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
2,535
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
37,393
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
22,169
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 Accounts payable and accruals
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(20,959
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(12,227
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(46,776
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(21,576
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
 Short-term and&nbsp;long-term debt
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
(273,705
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
)
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
(3,137
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
)
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
(16,361
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
 Gross balance sheet exposure
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(234,330
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
3,364
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(5,054
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
(8,709
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
)
	</TD>
</TR>
</TABLE>
</div>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(e)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Interest rate risk</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">Interest rate risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company is exposed to interest rate risk on its outstanding borrowings and short- term investments. In particular, the Company is exposed to interest rate changes on those ABCP investments that are expected to pay interest.
Interest is proposed to be based on the Canadian bankers&#146; acceptance rate which may fluctuate. A 1% change in the bankers&#146; acceptance rate would result in an annual difference of approximately &#36;1.6 million in the interest income to the
Company. The Company has not entered into any derivative contracts to manage this risk.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company follows the policy of issuing fixed interest rate debt to avoid future fluctuations in its debt service costs.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 18</P>

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<A name="page_21">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD colspan="2">
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>4.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD colspan="2">
<P align="justify"><B>Financial instruments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD width="5%">
<P align="justify"><I>(f) </I></P>
	</TD>
<TD>
<I>Commodity price risk</I></TD>
</TR>
</TABLE>
<P align="justify" style="margin-left: 10%">
The Company is subject to price risk for fluctuations in the market price of gold, silver and copper. The Company&#146;s earnings and cash flows are subject to price risk due to fluctuations in the market price of gold, silver and copper. World gold
prices have historically fluctuated widely. World gold prices are affected by numerous factors beyond our control, including:</P>
<ul>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
the strength of the U.S. economy and the economies of other industrialized and
developing nations; </P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
global or regional political or economic crises; </P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
the relative strength of the U.S. dollar and other currencies; </P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
expectations with respect to the rate of inflation; </P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
interest rates; </P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
purchases and sales of gold by central banks and other holders; </P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
demand for jewelry containing gold; and </P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
investment activity, including speculation, in gold as a commodity.</P>
  </li>
</ul>
<P align="justify" style="margin-left: 10%">
The Company is also subject to price risk for fluctuations in the cost of energy, principally electricity and purchased petroleum products. The Company&#146;s production costs are also affected by the prices of commodities it consumes or uses in its
operations, such as lime, reagents and explosives. The prices of such commodities are influenced by supply and demand trends affecting the mining industry in general and other factors outside the Company&#146;s control. The Company has not entered
into any hedging activities to mitigate these price risks.</P>
<P align="justify" style="margin-left: 10%">
A 10% change in commodity prices would impact the Company&#146;s net loss as follows:</P>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Nine months
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
ended
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
2008
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
</TR>
<TR>
	<TD colspan=3 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Gold price
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
3,566
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Copper price
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
473
	</TD>
</TR>
</TABLE>
</div>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(g)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Financial assets and liabilities</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company has designated its cash and cash equivalents, short-term investments as held-for-trading, which is measured at fair value. The Company has designated its ABCP as available-for-sale, which is measured at fair value and
unrealized gains and losses are recognized in other comprehensive income. Accounts receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued liabilities, short-term borrowings and
long-term debt are classified as other financial liabilities, which are measured at amortized cost. The long-term debt are financial instruments which have been recorded at fair value at the date of acquisition and will be measured at amortized cost
going forward.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 19</P>

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<A name="page_22">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=3>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>4.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Financial instruments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(g)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Financial assets and liabilities (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">The fair value of financial instruments traded in active markets (such as available-for- sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the
Company is the current bid price.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">The carrying value less impairment provision, if necessary, of trade receivables and payables are assumed to approximate their fair values.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">The Company&#146;s financial instruments primarily consist of cash, short-term money market investments, accounts receivable, accounts payable and short-term borrowings.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">For cash, short-term money market investments, and current accounts receivable and payable and short-term borrowings, carrying value is considered to be the fair value due to the short term nature of these instruments.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B>5.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Business combination and asset acquisition</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Acquisition of Metallica and NGI</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">On May 9, 2008, the Company entered into an agreement to complete a business combination (the &#147;Transaction&#148;) with Metallica and NGI.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD nowrap valign=top>
(i)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Metallica</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The acquisition of Metallica has been accounted for as a purchase transaction. Shareholders of Metallica received 0.9 of a New Gold common share and nominal cash consideration for each one common share of Metallica.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">87,447,821 common shares issued to Metallica shareholders were valued at &#36;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 on March 31, 2008. Holders of options, warrants or other convertible instruments of Metallica (&#147;Metallica equity instruments&#148;) exchanged such equity instrument 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.</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 20</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_23">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=3>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>5.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Business combination and asset acquisition (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Acquisition of Metallica and NGI (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>
<TD nowrap valign=top width="5%">
(i)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Metallica (continued)</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The preliminary allocation of the purchase price based on the consideration paid and Metallica&#146;s net assets acquired is as follows:</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="85%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 Issuance of New Gold shares (87,447,821 common&nbsp;shares)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
605,139
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Fair value of options issued
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
7,294
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Fair value of warrants issued
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
46,674
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Transaction costs
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
3,385
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
Purchase consideration
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
662,492
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=4 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Net assets acquired
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp; &nbsp;Net working capital acquired (including cash of &#36;34,154)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
20,525
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Mineral property, plant and equipment
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
656,345
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp; &nbsp;Other long-term assets
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
2,214
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Goodwill
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
130,951
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp; &nbsp;Long-term liabilities
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(2,671
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
 &nbsp; &nbsp;Future income tax liability
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
(144,872
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
662,492
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
</TABLE>
</div>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top width="5%">
&nbsp;</TD>
	<TD nowrap valign=top width="5%">
&nbsp;</TD>
	<TD nowrap valign=top width="5%">
(ii)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">NGI</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">This element of the Transaction has been accounted for as a purchase of assets and assumption of liabilities of NGI by Peak Gold.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">In accordance with the determination that Peak Gold is the accounting acquirer in this Transaction, the deemed consideration is the market value of the 37,005,717 NGI common shares and, the fair value of options, warrants and
convertible or exchangeable securities of NGI currently outstanding. As at June 30, 2008, there were options, warrants, convertible or exchangeable securities and other rights to acquire an aggregate of 30,678,500 common shares of NGI. The common
shares of NGI have been valued at &#36;7.82 per share, the share price of NGI as of June 30, 2008, the closing date of the Transaction.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 21</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_24">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=3>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>5.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=3>
<P align="justify"><B>Business combination and asset acquisition (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><I>Acquisition of Metallica and NGI (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>
<TD nowrap valign=top width="5%">
(ii)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">NGI (continued)</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The preliminary allocation of the purchase price based on the consideration paid and NGI&#146;s net assets acquired is as follows:</P>
	</TD>
</TR>
<TR><TD colspan=4>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="85%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center bgcolor="#E9F1F8">
<p align="left">Issuance of New Gold shares (37,005,717 common
shares)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
289,538
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Fair value of options issued
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
8,241
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Fair value of warrants issued
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
57,415
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Transaction costs
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
3,719
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
Purchase consideration
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
358,913
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=4 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Net working capital (including cash of &#36;103,564)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
85,687
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Mineral property, plant and equipment
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
541,187
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Other assets
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
94,629
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Long-term liabilities (Note 8)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(252,892
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Future income tax liability
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(88,094
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#E9F1F8">
Convertible debentures
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#E9F1F8">
(21,604
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
358,913
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
</TABLE>
</div>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">For the purposes of these consolidated interim financial statements, the purchase consideration has been allocated on a preliminary basis to the fair value of assets acquired and liabilities assumed, based on management&#146;s
best estimates and taking into account all available information at the time of the Transaction, as well as applicable information at the time these consolidated financial statements were prepared. The Company will complete a valuation of Metallica
and NGI using an independent party and, therefore, this preliminary allocation is subject to change.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Acquisition of Amapari and Peak Mines</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">On February 15, 2007, the Company entered into an agreement with Goldcorp Inc. (&#147;Goldcorp&#148;) to acquire Goldcorp&#146;s Amapari mine in Brazil and Peak mine in Australia (the &#147;Acquisition&#148;). The Company
completed the acquisition of the Amapari mine and the Peak mine on April 3, 2007 and April 27, 2007, respectively. In consideration for the acquisition of the Amapari and Peak mines, the Company issued to Goldcorp 155 million common shares with a
value of &#36;100 million and paid &#36;200 million in cash, respectively.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The business combination has been accounted for as a purchase transaction, with the Company as the acquirer and the Amapari and Peak Mines as the acquiree. The results of the operations of the acquired assets are included in the
consolidated financial statements of the Company from the dates of the Acquisition.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 22</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_25">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>5.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Business combination and asset acquisition (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD nowrap valign=top width="5%">
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Acquisition of Amapari and Peak Mines (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The final allocation of the assets and liabilities acquired is as follows:</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 Purchase price
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;&nbsp;Cash
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
200,000
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp;&nbsp;Common shares
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
100,000
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
 &nbsp; Acquisition costs
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
5,032
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
305,032
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=6 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=center bgcolor="#FFFFFF">
<p align="left">Net assets acquired
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; Cash and cash equivalents
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
11,212
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; Accounts receivable
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
4,391
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; Inventories and stockpiled ore
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
40,286
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; Mining interests
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
299,535
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; Intangible asset
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
14,664
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; Other
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
5,091
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; Current liabilities
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
(23,618
	</TD>
	<TD align=left>
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; Reclamation and closure cost obligations
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(16,662
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;">
 &nbsp; Future income tax liabilities, net
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
(29,867
	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
305,032
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=6 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
</TABLE>
</div>
<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right width="5%" bgcolor="#FFFFFF">
<p align="left">
<B>6.</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>Inventories and stockpiled ore</B></TD>
</TR>
</TABLE>
<div align="right">
<TABLE border=0 width="95%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="3%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="15%" bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD width="3%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=15% bgcolor="#FFFFFF">
December 31,
	</TD>
	<TD align=left width="3%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="3%" style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="15%" style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=15% style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="3%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="15%" bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=15% bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=6 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Supplies
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right width="15%">
<B>13,260</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right width=15%>
15,092
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Work-in-process (a)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="15%" bgcolor="#FFFFFF">
<B>7,172</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=15% bgcolor="#FFFFFF">
7,505
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Heap leach ore (b)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right width="15%">
<B>20,944</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right width=15%>
12,254
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Stockpiled ore (c)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="15%" bgcolor="#FFFFFF">
<B>143</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=15% bgcolor="#FFFFFF">
1,106
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;">
Finished goods
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right width="15%" style="border-bottom:3px double #000000;">
<B>2,479</B>
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right width=15% style="border-bottom:3px double #000000;">
3,835
	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="15%" style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>43,998</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=15% style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
39,792
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
</TABLE>
</div>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top width="5%">
&nbsp;</TD>
	<TD nowrap valign=top width="5%">
&nbsp;</TD>
	<TD width=100%>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top width="5%">
&nbsp;</TD>
	<TD nowrap valign=top width="5%">
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Work-in-process</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Work-in-process is the stage between the product (gold, silver and copper) as it sits as a raw material (mined or stockpiled) and when it has been converted into the finished product (dor&eacute; or concentrate).</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Heap leach ore</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The recovery of gold from certain oxide ores is achieved through the heap leaching process used at the Amapari and Cerro San Pedro mines. Under this method, ore is placed on leach pads where it is treated with a chemical solution
which dissolves the gold contained in the ore.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 23</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_26">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>6.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Inventories and stockpiled ore (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD nowrap valign=top width="5%">
<I>(c)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Stockpiled ore</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The low-grade stockpiled ore is located at Amapari and Peak mines and is forecasted to be drawn down throughout the remainder of the life of the mines.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B>7.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Investments</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">As at September 30, 2008, the Company had &#36;167 million (Cdn&#36;170 million) invested in asset backed commercial paper (&#147;ABCP&#148;) which is rated R1-high by Dominion Bond Rating Service. In mid-August 2007, a number of
non-bank sponsors of ABCP, including those with which NGI had invested, announced that they could not place ABCP due to unfavourable conditions in the Canadian capital markets. As a result, there is presently no active market for the ABCP held by
the Company.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">As at September 30, 2008, the non-bank ABCP market remained the subject of a restructuring process with the expressed intention of replacing the ABCP with a number of long-term floating rate notes. The restructuring plan would, if
the restructuring plan is completed as currently planned, see the pooling of all of the underlying assets from all the ABCP trusts with the exception of those assets designated as ineligible for pooling (&#147;Ineligible Assets&#148;) and those
series of assets backed exclusively by traditional financial assets (&#147;Traditional Series&#148;). ABCP relating to the pooled assets will be replaced with four classes of notes named A1, A2, B and C in declining order of seniority. ABCP relating
to Ineligible Assets and Traditional Series would be replaced with new tracking notes whose characteristics are designed to track the performance of the particular assets of the series to which they correspond.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">On April 25, 2008, the affected parties in the ABCP restructuring voted to approve the restructuring which has been conducted under the Companies&#146; Creditors Arrangement Act. This vote was subsequently sanctioned by the courts
and all subsequent appeals have been extinguished. The restructuring is currently planned to be completed in the fourth quarter of 2008 at which point the notes would become free trading. It is possible that the current financial market crisis may
further delay the restructuring plan. As a result, the Company classifies its holdings in ABCP as long-term investments.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 24</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_27">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>7.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Investments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">The Company has estimated the fair value of ABCP at September 30, 2008 using the following methodology and assumptions:</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD nowrap valign=top width="5%">
(a)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">The fair value estimate of the long-term floating rate notes proposed to be received under the restructuring has been calculated based on the relative contribution analysis and maturity dates as detailed in the table below.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Restructuring
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Face
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Fair value
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
categories
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
value
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
estimate
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<p style="margin-left: 10%">Maturity date
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
millions &#36;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
millions &#36;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
MAV 2 notes
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp; &nbsp;A1 (provisionally rated AA<SUP>1</SUP>)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
97.1
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
57.9
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
<p style="margin-left: 10%">December 31, 2016
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;A2 (provisionally rated AA<SUP>1</SUP>)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
30.3
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
16.9
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">December 31, 2016
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp; &nbsp;B
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
5.2
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
0.8
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
<p style="margin-left: 10%">December 31, 2016
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;C
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
4.1
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
0.3
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">December 31, 2016
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Traditional asset tracking notes
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
<p style="margin-left: 10%">&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; &nbsp;(provisionally rated AAA)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
9.0
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
8.5
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
<p style="margin-left: 10%">September 12, 2015
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Ineligible asset tracking notes
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Class 3/13/14 (Class 14
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">December 20, 2012
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
 &nbsp; &nbsp;provisionally rated BBB)
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
15.0
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
3.3
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
 <p style="margin-left: 10%">&nbsp; &nbsp;to October 24, 2016
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
160.7
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
87.7
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
<p style="margin-left: 10%">&nbsp;
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=3 bgcolor="#FFFFFF">
1 provisional ratings released by DBRS
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
<p style="margin-left: 10%">&nbsp;
	</TD>
</TR>
</TABLE>
</div>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top width="5%">
&nbsp;</TD>
	<TD nowrap valign=top width="5%">
(b)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">The A1, A2 and traditional asset tracking notes comprise the major categories of the notes contemplated to be received totaling 85% of the face value of the original investments made and 95% of the fair value estimate of the
Company&#146;s holdings. In the case of the A1 and A2 notes, it is estimated that they will pay interest at a rate 0.5% less than the bankers&#146; acceptance (&#147;BA&#148;) rate and it is estimated that prospective buyers of these notes will
require premium yields between 7% and 8% over the BA rate.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
(c)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">The traditional asset notes are estimated to generate interest of 0.5% above the BA rate and a prospective buyer of those notes is estimated to require a premium of 1.5% over the BA rate.</P>
	</TD>
</TR>
</TABLE>
<P align="justify" style="margin-left: 10%">
Using these assumptions, the Company estimates that the A1, A2 and traditional asset tracking notes will generate returns between 3.7% and 4.7% . The Company has then applied its best estimate of prospective buyers&#146; required yield and
calculated the present value of the new notes using required yield as the discount factor. Using a range of potential discount factors allows the Company to estimate a range of recoverable values.</P>
<P align="justify" style="margin-left: 10%">
An identical procedure was performed for the B, C and ineligible tracking notes. The Class B notes are not expected to pay any current interest until the Class A1 and A2 notes are paid in full, which is not anticipated until December 20, 2016. These
notes, which will be subordinate to the Class A1 and A2 notes, will not receive a credit rating and it is expected that Class B notes will initially trade at less than 10% of par value.</P>
<P align="justify" style="margin-left: 10%">
The Class C notes also will not pay any current interest and are subordinate to the Class B notes. In light of this subordination, the Class C notes are viewed as highly speculative with regard to ultimate payment of principal at maturity in 2016.
Accordingly, it is expected that Class C notes will initially trade at less than 5% of par value.</P>
<P align="right">
Page 25</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_28">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100%>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>7.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><B>Investments (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company will also receive three classes of ineligible tracking notes, two of which have direct exposure to the U.S. sub-prime mortgage market and one of which is backed by a leveraged super senior (&#147;LSS&#148;) credit
default swap. The fair value of the sub-prime backed notes is less than 10% of par value while the LSS backed note as to a fair value of less than 60% of par value.</P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">No estimate of the restructuring costs, which have been stated as being immaterial by the restructuring committee, nor any interest income which may have accrued since August 13, 2007, have been included in the fair value
assessment due to a lack of verifiable information.</P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Based upon a sensitivity analysis of the assumptions used, the expected yield required by a potential investor remains the most significant assumption included in the fair value estimate.</P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Based on this exercise the Company estimated that as at September 30, 2008 the range of recoverable amounts was between &#36;78.3 million and &#36;98.6 million. There can be no assurance that this estimate will be realized.
Subsequent adjustments, which could be material, may be required in future reporting periods.</P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company has designated the investments as available-for-sale financial instruments.</P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B>8.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><B>Mining interests</B></P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="95%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right colspan=3 style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>September 30, 2008</B>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="5%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left width="15%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="5%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="15%" bgcolor="#FFFFFF">
<B>Accumulated</B>
	</TD>
	<TD width="5%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left width="15%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width="5%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left width="15%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>depreciation</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>Net book</B>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>Cost</B>
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>and depletion</B>
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>value</B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Mining properties
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>1,271,547</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>81,196</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>1,190,351</B>
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Plant and equipment
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>327,586</B>
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>103,162</B>
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>224,424</B>
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>1,599,133</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>184,358</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
<B>1,414,775</B>
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
December 31, 2007
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Accumulated
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
depreciation
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Net book
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Cost
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
and depletion
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
value
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Mining properties
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
190,163
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
2,687
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
187,476
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Plant and equipment
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
144,641
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
16,286
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
128,355
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
334,804
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
18,973
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
315,831
	</TD>
</TR>
</TABLE>
</div>
<P align="right">
Page 26</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_29">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt;">
<TR valign="bottom">
	<TD align=right width="5%">
&nbsp;</TD>
	<TD align=left width="91%">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=right width="5%">
<p align="left">
<B>8.</B>
	</TD>
	<TD align=left width="91%">
<B>Mining interests (continued)</B></TD>
</TR>
</TABLE>&nbsp;<div align="right">
<TABLE border=0 width="95%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left colspan=13 bgcolor="#FFFFFF">
A summary of net book value by property is as follows:
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Mining properties
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Non
- -
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Plant and
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
December 31,
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Depletable
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
depletable
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Total
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
equipment
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
2008
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
2007
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="10%" bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="10%" bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD width=2% bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right width="10%" bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD width=2% bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right width="10%" bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD width=2% bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right width=10% bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD width=2% bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right width="10%" bgcolor="#FFFFFF">
&#36;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Amapari (b)
	</TD>
	<TD width=2% bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right width="10%" bgcolor="#E9F1F8">
- -
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
5,000
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
5,000
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
5,000
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
10,000
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
174,744
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Cerro San Pedro
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="10%" bgcolor="#FFFFFF">
193,558
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
64,145
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
257,703
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
69,817
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
327,520
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;-
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
El Morro project/
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; &nbsp;Other projects (a)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
320,779
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
320,779
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
320,779
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;-
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
New Afton project
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
492,386
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
492,386
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
97,273
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
589,659
	</TD>
	<TD bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;-
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Peak Mines
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
5,013
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
109,470
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
114,483
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
51,731
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
166,214
	</TD>
	<TD align="right">
&nbsp;	</TD>
	<TD align=right>
140,497
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Corporate
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
- -
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
603
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
603
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
590
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
198,571
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
991,780
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
1,190,351
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
224,424
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
1,414,775
	</TD>
	<TD style="border-bottom:1px solid #000000;" align="right">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
315,831
	</TD>
</TR>
</TABLE>
</div>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD>
&nbsp;</TD>
	<TD colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
(a)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
<P align="justify">(i)  </P>
	</TD>
	<TD colspan=2>
<P align="justify">Chile - El Morro Project</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD>
<P align="justify">&nbsp;</P>
	</TD>
<TD colspan=2>
The El Morro copper-gold project consists of the La Fortuna and El Morro areas. Xstrata has a 70% interest in the El Morro project.</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD>
<P align="justify">&nbsp;</P>
	</TD>
<TD colspan=2>
The Company has other projects in Chile that consist of copper-gold exploration concessions that are contiguous to the El Morro project.</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
(ii)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD colspan=2>
<P align="justify">Other projects include</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>
<TD nowrap valign=top width="5%">
(1)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
<P align="justify">Chile - Rio Figueroa Project</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD>
<P align="justify">The Company has an option agreement with Sociedad Contractual Minera Los Potrillos (&#147;Potrillos&#148;) to acquire a 100% interest in a copper-gold exploration project referred to as the Rio Figueroa project.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD nowrap valign=top>
(2)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
<P align="justify">USA - Liberty Bell</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD>
<P align="justify">The Company entered into an exploration agreement with the right to acquire the Liberty Bell gold project in central Alaska.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD nowrap valign=top>
(3)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD>
<P align="justify">Canada - Ajax</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD>
<P align="justify">The Company owns a 100% interest in the Ajax-Python Claim Group.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
(b)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD colspan=3>
<P align="justify">Remaining heap leachable material at the Amapari mine will be exhausted in the fourth quarter of 2009. Production beyond 2009 is subject to ongoing feasibility of mining and processing the sulphide resources underlying and
surrounding the oxide pits. As a result, the Company has recorded an impairment charge of &#36;165.3 million before tax recoveries of &#36;8.4 million.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=4>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 27</P>

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<A name="page_30">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt;">
<TR valign="bottom">
	<TD align=right width="5%">
&nbsp;</TD>
	<TD align=left width="93%">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=right width="5%">
<p align="left">
<B>9.</B>
	</TD>
	<TD align=left width="93%">
<B>Long-term debt</B></TD>
</TR>
</TABLE>&nbsp;<div align="right">
<TABLE border=0 width="95%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
Long-term debt consists of the following:
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Senior secured notes (a)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
210,557
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Embedded early redemption feature at fair value (b)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(360
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;">
Subordinated convertible debentures (c)
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
33,832
	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
244,029
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
</TABLE>
</div>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Senior secured notes</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">In accordance with the provisions of CICA Handbook Section 1581, <I>Business Combinations</I>, the Company has performed a preliminary estimate of the fair value of the senior secured notes (the &#147;Notes&#148;) using the
closing price as listed on the Toronto Stock Exchange (&#147;TSX&#148;) on June 30, 2008 for the Notes. The face value of the Notes at September 30, 2008 was Cdn&#36;237 million.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Notes, originally issued by NGI pursuant to a note indenture dated June 28, 2007, mature and become due and payable on June 28, 2017 and bear interest at the rate of 10% per annum. Under the terms of the Notes, the Company has
agreed to certain additional restrictions on its business as it relates to the New Afton assets. In particular, the Company has agreed:</P>
	</TD>
</TR>
</TABLE>
<ul>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
to grant to the Trustee under the note indenture, for the benefit of the noteholders, a first-ranking security interest on the New Afton project assets;</P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
that it will not sell or otherwise transfer any of the New Afton project assets except for transfers made in the ordinary course of business for fair market value or transfers of production from the New Afton project pursuant to any risk management
or offtake agreement;</P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
that it will not incur additional indebtedness except for certain permitted indebtedness and it will not create any security interest of any kind securing indebtedness on any New Afton project assets except for certain permitted encumbrances;
and</P>
  </li>
  <li>
<P align="justify" style="margin-left: 10%; margin-top: 0; margin-bottom: 0">
to certain limitations on its ability to make advances to its subsidiary companies for cash flow produced from the New Afton project assets.</P>
  </li>
</ul>
<P align="justify" style="margin-left: 10%">
Interest is payable in arrears in equal semi-annual instalments on January 1 and July 1 in each year.</P>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top width="5%">
&nbsp;</TD>
	<TD nowrap valign=top width="5%">
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Embedded early redemption feature at fair value</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company has the right to redeem the Notes in whole or in part at any time and from time to time prior to June 27, 2017 at a price ranging from 120% to 100% (decreasing based on the length of time the Notes are outstanding) of
the principal amount of the Notes to be redeemed.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The early redemption feature in the Notes qualifies as an embedded derivative that must be bifurcated for reporting purposes. As of September 30, 2008, the fair value of the derivative asset is &#36;0.4 million.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 28</P>

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<A name="page_31">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>9.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Long-term debt (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(c)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Subordinated convertible debentures</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">In 2007, NGI issued 55,000 convertible subordinated debentures (&#147;Debentures&#148;) for an aggregate principal amount of Cdn&#36;55 million. The Debentures, which were issued pursuant to a Debenture Indenture dated June 28,
2007 (the &#147;Debenture Indenture&#148;), each have a principal amount of &#36;1,000, bear interest at a rate of 5% per annum and are convertible by the holders into common shares of the Company at any time up to June 28, 2014 at a conversion
price of Cdn&#36;9.35 per share. The Debentures do not allow forced conversion by the Company prior to January 1, 2012 but after that date the Company may redeem the Debentures if the market price of the Company&#146;s shares is at least 125% of the
conversion price. The Debentures are classified as compound financial instruments for accounting purposes because of the holder conversion option.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Interest is payable in arrears in equal semi-annual instalments on January 1 and July 1 in each year.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Debenture Indenture provides that in the event of a change of control of the Company, as defined therein, where 10% or more of the aggregate purchase consideration is cash, the Company must offer to either (i) redeem the
outstanding Debentures at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest up to but excluding the date of redemption, or (ii) convert the outstanding Debentures into common shares at conversion prices
ranging from Cdn&#36;7.48 at inception to Cdn&#36;9.35, based on a time formula specified in the Debenture Indenture.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Debentures are subordinate to the Notes and any secured indebtedness incurred subsequent to the issue of the Debentures.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Company has allocated &#36;34.5 million of the &#36;56.2 million fair value as a liability based on the fair value of a similar debt instrument without an associated conversion option. The debt component of the Debentures will
be accreted over the expected term to maturity using the effective interest method.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">The Debenture Indenture requires the Company to comply with certain reporting and other covenants.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 29</P>

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<A name="page_32">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>10.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Share capital</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(a)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Authorized</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">Unlimited number of common shares without par value Unlimited number of preferred shares without par value</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(b)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Special warrants</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">On November 28, 2007, the Company completed a private placement financing of 14,772,333 Special Warrants at a price of Cdn&#36;7.50 per Special Warrant for total gross proceeds of Cdn&#36;110.8 million (US&#36;111.8 million) and
net proceeds after issue costs of Cdn&#36;103.2 million (US&#36;104.2 million). Each Special Warrant entitled the holder thereof to receive one unit of the Company, at no additional cost. Each unit comprised one common share of the Company and
one-half of one common share purchase warrant. Each whole common share purchase warrant entitled the holder to acquire one additional common share, at a price of Cdn&#36;9.00 until November 28, 2012.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">On February 28, 2008, the 14,772,333 Special Warrants outstanding at December 31, 2007 were converted into 14,772,333 common shares of the Company and 7,386,168 common share purchase warrants. The warrants were valued at &#36;23.7
million using the Black-Scholes pricing model and that amount is included in share purchase warrants. A fair value of approximately &#36;3.20 for each warrant was calculated using the following assumptions: no dividends are paid, volatility of 60%,
risk free interest rate of 3.4%, and expected life of five years. Every 10 warrants are exercisable into 1 New Gold common share.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(c)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Stock options</I></P>
	</TD>
</TR>
</TABLE>
<P align="justify" style="margin-left: 10%">
The Company has established a &#147;rolling&#148; stock option plan (the &#147;Plan&#148;) in compliance with the TSX Exchange&#146;s policy for granting stock options. Under the Plan, the maximum number of shares reserved for issuance may not
exceed 10% of the total number of issued and outstanding common shares. The exercise price of each option shall not be less than the market price of the Company&#146;s stock at the date of grant. Options generally vest over three years.</P>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Weighted
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
average
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Number of
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
exercise
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
options
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
price
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Cdn&#36;
	</TD>
</TR>
<TR>
	<TD colspan=6 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Balance, December 31, 2007
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
2,149,600
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
9.10
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Granted
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
3,009,700
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
7.06
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Options assumed on acquisition of Metallica
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1,930,095
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
4.07
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Options assumed on acquisition of NGI
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
2,828,500
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
7.03
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Exercised
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
(424,090
	</TD>
	<TD align=left>
)
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
3.53
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Forfeited
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
(391,200
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
)
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
9.22
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:1px solid #000000;">
Balance, September 30, 2008
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
9,102,605
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
6.98
	</TD>
</TR>
</TABLE>
</div>
<P align="right">
Page 30</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_33">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>10.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Share capital (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
<I>(c)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Stock options (continued)</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD><TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">The following table summarizes information about the stock options outstanding at September 30, 2008:</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=right colspan=3 style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Options outstanding
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right colspan=3 style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Options exercisable
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Weighted
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Weighted
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
average
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Weighted
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right bgcolor="#FFFFFF">
Number of
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
average
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
remaining
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Number of
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
average
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right bgcolor="#FFFFFF">
stock options
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
exercise
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
contractual
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
options
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
exercise
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
outstanding
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
price
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
life
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
exercisable
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
price
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Cdn&#36;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Cdn&#36;
	</TD>
</TR>
<TR>
	<TD colspan=9 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right>
184,500
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1.70
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1.2 years
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
184,500
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1.70
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right bgcolor="#FFFFFF">
103,500
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
2.74
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
1.0 years
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
103,500
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
2.74
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right>
520,187
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
3.44
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1.6 years
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
520,187
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
3.44
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right bgcolor="#FFFFFF">
600,000
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
4.60
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
1.3 years
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
600,000
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
4.60
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right>
1,225,818
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
5.53
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
3.6 years
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
959,152
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
5.55
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right bgcolor="#FFFFFF">
1,914,200
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
6.42
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
3.6 years
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
1,084,067
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
6.55
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right>
2,303,700
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
7.66
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
4.4 years
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
839,233
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
7.37
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right bgcolor="#FFFFFF">
1,773,200
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
9.29
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
3.5 years
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
641,067
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
9.27
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right style="border-bottom:3px double #000000;">
477,500
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
11.00
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
1.6 years
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
477,500
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
11.00
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
9,102,605
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
6.98
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
3.3 years
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
5,409,206
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
6.29
	</TD>
</TR>
</TABLE>
</div>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
<TD width="5%">&nbsp;</TD>
<TD width="5%">&nbsp;</TD>	<TD width=100%>
<P align="justify">On July 8, August 13, and August 18, 2008, the Company granted 1,623,700, 95,000, and 50,000 stock options, respectively, to employees and directors. These options have an exercise price of Cdn&#36;7.84, Cdn&#36;5.37, and
Cdn&#36;5.45, respectively. The options vest over a three year period and have a contractual life of five years from date of grant.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD nowrap valign=top>
<I>(d)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Stock-based compensation</I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">For the period ended September 30, 2008, the Company recorded &#36;2.53 million as stock-based compensation expense and recorded this amount in contributed surplus. The value was determined using the Black-Scholes pricing model. A
weighted average grant-date fair value of Cdn&#36;7.64 was calculated using the following assumptions: no dividends are to be paid; volatility of 50%, risk free interest rate of 3.37%; and expected life of 4.78 years.</P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 31</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_34">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>10.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Share capital (continued)</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD nowrap valign=top width="5%">
<I>(e)</I>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify"><I>Share purchase warrants</I></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>	<TD width=100%>
<P align="justify">A summary of the changes in share purchase warrants is presented below:</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Weighted
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
average
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Number of
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
exercise
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
warrants
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
price
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Cdn&#36;
	</TD>
</TR>
<TR>
	<TD colspan=5 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Balance, December 31, 2007
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
21,750,000
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
15.00
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
Issued
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
7,386,161
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
9.00
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Metallica share purchase warrants exercisable
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp; &nbsp;into New Gold shares
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
17,606,965
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
3.92
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
NGI share purchase warrants
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
27,850,000
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
15.00
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
Balance, September 30, 2008
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
74,593,126
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#E9F1F8">
11.79
	</TD>
</TR>
</TABLE>
</div>
<P align="justify" style="margin-left: 10%">
The following table summarizes information about outstanding share purchase warrants at September 30, 2008:</P>
<div align="right">
<TABLE border=0 width="90%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=right bgcolor="#FFFFFF">
Number
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Exercise
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
of warrants
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
prices
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Expiry date
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Value
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Cdn&#36;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
</TR>
<TR>
	<TD colspan=7 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right width="20%">
14,456,965
	</TD>
	<TD width="7%">
&nbsp;	</TD>
	<TD align=right width="20%">
3.44
	</TD>
	<TD width="7%">
&nbsp;	</TD>
	<TD align=left width="20%">
December 11, 2008
	</TD>
	<TD width="7%">
&nbsp;	</TD>
	<TD align=right width="20%">
39,454
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right width="20%" bgcolor="#FFFFFF">
3,150,000
	</TD>
	<TD width="7%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
6.11
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
December 20, 2009
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
6,808
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right width="20%">
21,750,000
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
15.00
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
April 3, 2012
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
57,673
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right bgcolor="#FFFFFF">
7,386,161
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
9.00
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
November 28, 2012
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
23,718
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right>
4,150,000
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
15.00
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
June 28, 2017
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
8,556
	</TD>
</TR>
<TR valign="bottom">
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
23,700,000
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
15.00
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
June 28, 2017
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
48,859
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=right style="border-bottom:1px solid #000000;">
74,593,126
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=left style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:1px solid #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;">
185,068
	</TD>
</TR>
</TABLE>
</div>
<P align="right">
Page 32</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_35">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 width=100% cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt;">
<TR valign="bottom">
	<TD align=right width="5%">
&nbsp;</TD>
	<TD align=left width="92%">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=right width="5%">
<p align="left">
<B>11.</B>
	</TD>
	<TD align=left width="92%">
<B>Supplemental cash flow information</B></TD>
</TR>
</TABLE>
<div align="right">
<TABLE border=0 width="95%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>Three months</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Three months
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>Nine months</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
Ten months
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
<B>ended</B>
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width=12% bgcolor="#FFFFFF">
ended
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
<B>ended</B>
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD width=2% bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
ended
	</TD>
	<TD align=left width=2% bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right width="12%" bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>September 30,</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
September 30,
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<B>2008</B>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
2007
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>&#36;</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Change in non-cash
working capital
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Accounts receivable
	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>3,717</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(10,708
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(5,235</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(15,276
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp; &nbsp;Inventories and stockpiled ore
	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>(1,112</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
<B>)</B>
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(3,656
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
<B>4,503</B>
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(1,710
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Accounts payable and accrued liabilities
	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(14,821</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
5,619
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>(22,493</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
921
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left style="border-bottom:3px double #000000;">
 &nbsp; &nbsp;Other
	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
<B>(33</B>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
<B>)</B>
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
(67
	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
)
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
<B>86</B>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;">
(310
	</TD>
	<TD align=left style="border-bottom:3px double #000000;">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>(12,249</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(8,812
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>(23,139</B>
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
<B>)</B>
	</TD>
	<TD style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
(16,375
	</TD>
	<TD align=left style="border-bottom:1px solid #000000;" bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
Non-cash financing and
investing activities
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Shares issued on acquisition (Note 5 (a) and 5 (b))
	</TD>
	<TD align=center bgcolor="#FFFFFF">
<p align="right">
<B>-</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>894,677</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
103,253
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
Operating activities included
the following payments
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp; &nbsp;Interest paid
	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>964</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
<B>1,103</B>
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
533
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp; &nbsp;Income taxes paid
	</TD>
	<TD align=right>
<B>3,253</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
<B>9,278</B>
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
1,299
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
</TABLE>
</div>
<P align="right">
Page 33</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_36">
<p align="left">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<P align="justify">
<B>12. </B></P>
<P align="justify" style="margin-left: 5%; margin-top: -25.5pt">
<B>Segmented information</B></P>
<P align="justify" style="margin-left: 5%">
The Company manages its operations by geographical location. These reportable operating segments are summarized in the table below:</P>
<div align="right">
<TABLE border=0 width="95%" cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" bordercolor="#111111">
<TR valign="bottom">
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Brazil
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Chile<SUP> (2</SUP>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<SUP>)</SUP>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<p align="right">Canada <SUP>(2)</SUP>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Mexico
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<SUP>(2) </SUP>Australia
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Other
<SUP>(1</SUP>
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
<SUP>)</SUP>
	</TD>
	<TD align=right style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
Total
	</TD>
	<TD align=left style="border-bottom:3px double #000000;" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
<B>Three months ended September 30, 2008</B>
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left colspan="2">
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Revenues
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
14,213
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
27,439
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
21,732
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
63,384
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp;Depletion and depreciation
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
3,020
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
5
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
3,935
	</TD>
	<TD align=left colspan="2">
&nbsp;
	</TD>
	<TD align=right>
2,683
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
23
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
9,666
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;(Loss) earnings from operations
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(170,660
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(870
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
5,618
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
6,018
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(7,694
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(167,588
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp;Total assets
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
48,681
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
320,779
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
737,789
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
510,891
	</TD>
	<TD align=left bgcolor="#E9F1F8" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
206,360
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
154,746
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
1,979,246
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Expenditures for mining interests
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
(1,641
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(40,468
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(2,269
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(9,474
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(54
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(53,906
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR>
	<TD colspan=17 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
<B>Nine months ended September 30, 2008</B>
	</TD>
	<TD width="1%" bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left width="8%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="1%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width=8% bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="1%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right width=8% bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="1%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="8%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="1%" bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=left width=8% bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="1%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="8%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="1%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="8%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left width="1%" bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp;Revenues
	</TD>
	<TD width="1%">
&nbsp;	</TD>
	<TD align=right width="8%">
52,755
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
27,439
	</TD>
	<TD align=left colspan="2">
&nbsp;
	</TD>
	<TD align=right>
78,908
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
159,102
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Depletion and depreciation
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
12,341
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
5
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
3,935
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
7,379
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
66
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
23,726
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp;(Loss) earnings from operations
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=right bgcolor="#E9F1F8">
(178,656
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD align=right bgcolor="#E9F1F8">
- -
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
(870
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD align=right bgcolor="#E9F1F8">
5,618
	</TD>
	<TD align=left bgcolor="#E9F1F8" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
26,106
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
(12,201
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD align=right bgcolor="#E9F1F8">
(160,003
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Total assets
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=right bgcolor="#FFFFFF">
48,681
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
320,779
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
737,789
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
510,891
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
206,360
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
154,746
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
1,979,246
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp;Expenditures for mining interests
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=right>
(6,107
	</TD>
	<TD align=left>
)
	</TD>
	<TD align=right>
- -
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
(40,468
	</TD>
	<TD align=left>
)
	</TD>
	<TD align=right>
(2,269
	</TD>
	<TD align=left colspan="2">
)
	</TD>
	<TD align=right>
(21,799
	</TD>
	<TD align=left>
)
	</TD>
	<TD align=right>
(80
	</TD>
	<TD align=left>
)
	</TD>
	<TD align=right>
(70,723
	</TD>
	<TD align=left>
)
	</TD>
</TR>
<TR>
	<TD colspan=17 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left colspan=17 bgcolor="#FFFFFF">
(1) Other includes corporate balances and intercompany eliminations
	</TD>
</TR>
<TR>
	<TD colspan=17 bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
	<font style="font-size: 10pt">
	Brazil


	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
	<font style="font-size: 10pt">
Australia</TD>
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
	<font style="font-size: 10pt">
Other<SUP> (1</SUP>


	</TD>
	<TD align=left bgcolor="#FFFFFF" valign="top" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
	<font style="font-size: 10pt">
<SUP>)</SUP></TD>
	<TD align=right bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
	<font style="font-size: 10pt">
Total</TD>
	<TD align=left bgcolor="#FFFFFF" style="border-top-style: none; border-top-width: medium; border-bottom-style: double; border-bottom-width: 2">
&nbsp;</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
$
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&#36;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
<B>Three months ended September 30, 2007</B>
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8" colspan="2">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Revenues
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
15,196
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
29,467
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
- -
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
44,663
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp;Depletion and depreciation
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
3,284
	</TD>
	<TD align=left bgcolor="#E9F1F8" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
9,958
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
16
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
13,258
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;(Loss) earnings from operations
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
(1,560
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
)</TD>
	<TD align=right bgcolor="#FFFFFF">
6,494
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(2,322
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
2,612
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp;Total assets
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
174,033
	</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right colspan=2>
	<font style="font-size: 10pt">
214,605</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
68,274
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
456,912
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Expenditures for mining interests
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
(1,779
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
)</TD>
	<TD align=right bgcolor="#FFFFFF">
(5,607
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(615
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
	<TD align=right bgcolor="#FFFFFF">
(8,001
	</TD>
	<TD align=left bgcolor="#FFFFFF">
)
	</TD>
</TR>
<TR>
	<TD colspan=17 bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
<B>Ten months ended September 30, 2007</B>
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp;Revenues
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;</TD>
	<TD align=right bgcolor="#E9F1F8">
30,662
	</TD>
	<TD align=left bgcolor="#E9F1F8" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
53,443
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
- -
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
84,105
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Depletion and depreciation
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
7,046
	</TD>
	<TD align=left bgcolor="#FFFFFF" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
15,677
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
16
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
22,739
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom" bgcolor="#e9f1f8">
	<TD align=left>
 &nbsp;(Loss) earnings from operations
	</TD>
	<TD>
&nbsp;	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
&nbsp;</TD>
	<TD align=left>
&nbsp;</TD>
	<TD align=right>
(4,072
	</TD>
	<TD align=left colspan="2">
)</TD>
	<TD align=right>
12,370
	</TD>
	<TD align=left>
&nbsp;
	</TD>
	<TD align=right>
(7,280
	</TD>
	<TD align=left>
)
	</TD>
	<TD align=right>
1,018
	</TD>
	<TD align=left>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#FFFFFF">
 &nbsp;Total assets
	</TD>
	<TD bgcolor="#FFFFFF">
&nbsp;	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right bgcolor="#FFFFFF">
174,033
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;</TD>
	<TD align=right colspan=2 bgcolor="#FFFFFF">
	<font style="font-size: 10pt">
214,605


	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
68,274
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
	<TD align=right bgcolor="#FFFFFF">
456,912
	</TD>
	<TD align=left bgcolor="#FFFFFF">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left bgcolor="#E9F1F8">
 &nbsp;Expenditures for mining interests
	</TD>
	<TD bgcolor="#E9F1F8">
&nbsp;	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
&nbsp;</TD>
	<TD align=left bgcolor="#E9F1F8">
&nbsp;</TD>
	<TD align=right bgcolor="#E9F1F8">
(3,142
	</TD>
	<TD align=left bgcolor="#E9F1F8" colspan="2">
&nbsp;
	</TD>
	<TD align=right bgcolor="#E9F1F8">
(12,545
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD align=right bgcolor="#E9F1F8">
(622
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
	<TD align=right bgcolor="#E9F1F8">
(16,309
	</TD>
	<TD align=left bgcolor="#E9F1F8">
)
	</TD>
</TR>
</TABLE>
</div>
<BR>
<div align="right">
<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="95%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
(1)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Other includes corporate balances and intercompany eliminations</P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
(2)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">Segments acquired on June 30, 2008 (Note 1)</P>
	</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
</div>
<P align="right">
Page 34</P>

<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">




<A name="page_37">
<p align="justify">




<A name="page_8">
<B><font size="5">New Gold Inc.<br>
</font></B><font size="4">Notes to the consolidated financial statements September 30, 2008<br>
</font>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited)</A></p>
</A>

<TABLE border=0 cellspacing=0 cellpadding=0 style="font-family: 'Times New Roman';font-size: 10pt; border-collapse:collapse" width="100%" bordercolor="#111111">
<TR>
	<TD nowrap valign=top>
&nbsp;</TD>
	<TD width=100% colspan=2>
&nbsp;</TD>
</TR>
<TR>
	<TD nowrap valign=top>
<B>13.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Commitments and contingencies</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
(a)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">The Company has entered into a number of contractual commitments related to equipment orders to purchase long lead items or critical pieces of mining equipment necessary to commence development of the New Afton project. At
September 30, 2008, these commitments totaled &#36;41 million and are expected to fall due over the next 12 months.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD nowrap valign=top>
(b)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">The Company&#146;s, subsidiary, Minera San Xavier, S.A. de C.V., settled its dispute with Washington Group Latin America for &#36;8.0 million and a mutual release and settlement agreement was signed by both parties.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD width="5%">&nbsp;</TD>	<TD nowrap valign=top width="5%">
(c)&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100%>
<P align="justify">The Company is from time to time involved in various claims, legal proceedings and complaints arising in the ordinary course of business. The Company has received notice that legal claims in the amount of approximately &#36;46
million have been filed in Brazilian courts against the Company&#146;s subsidiary, Minera&ccedil;&atilde;o Pedra Branca do Amapari Ltda (&#147;MPBA&#148;). The claims allege that MPBA has adversely impacted the quality of William Creek causing
economic loss and health concerns. The Company believes that these claims are unfounded and intends to vigorously defend against them. The Company cannot reasonably predict the likelihood or outcome of these actions. Other than the preceding, the
Company does not believe that adverse decisions in any other pending or threatened proceedings related to any matter, or any amount which may be required to be paid by reason thereof, will have a material effect on the financial condition or future
results of operations of the Company.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
	<TD nowrap valign=top>
<B>14.</B>&nbsp; &nbsp; &nbsp; 	</TD>
	<TD width=100% colspan=2>
<P align="justify"><B>Subsequent event</B></P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">Subsequent to September 30, 2008, the Company announced that it would slow development activities of the New Afton project in light of the Company&#146;s current cash position, volatile equity markets, global uncertainty in the
capital markets and increasing cost pressures. The underground mine development activities will continue at a reduced rate and surface construction activities will be wound down. This slowdown will be implemented in a manner that protects the value
of expenditure to date and facilitates the re-commencement of activities when the decision is made to resume full construction of the project. The revised schedule involves development of access to the base of the ore body by the end of 2010
followed by completion of underground development and surface construction to achieve full production in the second half of 2012. This schedule is dependent on the Company obtaining the required financing for the project by the end of 2010, and if
this financing is obtained prior to the end of 2010 the schedule can be updated accordingly.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD>	<TD width=100% colspan=2>
<P align="justify">The revised schedule projects a total cash requirement of approximately &#36;83.0 million in 2009, as compared to the existing fast track schedule which has a cash requirement of &#36;320.0 million.</P>
	</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="right">
Page 35</P>

<hr color="#000000" size="5">


</BODY>

</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exh992.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>New Gold Inc.: Exhibit 99.2 - Prepared by TNT Filings Inc.</TITLE>
<META NAME="author" CONTENT="mmaciver">
<META NAME="date" CONTENT="11/12/2008">
</HEAD>
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&nbsp;<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B>
<font size="5">NEW GOLD INC. </font> </B></P>
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<font size="4">Management&#146;s Discussion and Analysis </font> </B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
<font size="2">Nine Months Ended September 30, 2008</font></P>
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<font size="2">(in United States dollars, except where noted)</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><I>This Management&#146;s Discussion and Analysis should be read in conjunction with New Gold Inc.&#146;s (&#147;New Gold&#148;) unaudited interim consolidated financial statements for the three and nine months ended September 30, 2008</I> <I>and related notes thereto which have been prepared in accordance with Canadian Generally Accepted Accounting Principles (&#147;GAAP&#148;). This Management&#146;s Discussion and Analysis contains &#147;forward-looking statements&#148; that are subject to risk factors set out in a cautionary note contained herein. &nbsp;The reader is cautioned not to place undue reliance on forward-looking statements. All figures are in United States dollars, tabular amounts are in thousands, unless otherwise noted. This Management Discussion and Analysis has been prepared as of November 11th, 2008. Additional information
 relating to the Company is available on SEDAR at <U>www.sedar.com</U>.</I></P>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000">Further to the recent business combination of New Gold Inc. (&#147;NGI&#148;), Metallica Resources Inc. (&#147;Metallica&#148;) and Peak Gold Ltd. (&#147;Peak Gold&#148;) on June 30, 2008, unaudited interim consolidated financial statements of the newly formed company (&#147;New Gold&#148; or the &#147;Company&#148;) for the three and nine month periods ending September 30, 2008 are presented on the basis that Peak Gold is the acquirer for accounting purposes. &nbsp;</P>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">THIRD QUARTER HIGHLIGHTS</font></B></P>
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<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000"><B>Gold production of 68,801 ounces </B></P>
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<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000"><B>Gold sales of 67,156 ounces </B></P>
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<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000"><B>Total cash cost of $566 per ounce (net of by-product sales)</B><SUP> (1)</SUP></P>
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<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000"><B>Net Loss of $148.9 million after the Amapari impairment of $156.9 million net of tax recoveries</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-12pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; font-size:10pt; color:#000000"><B>&#8226;</B></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000"><B>The Company has written down its investment in Amapari by $156.9 million, net of tax recoveries, to $10.6 million</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-12pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; font-size:10pt; color:#000000"><B>&#8226;</B></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000"><B>Decision to slow development of the New Afton Project</B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align=justify><B>&nbsp;</B>(1) &#147;Total cash cost&#148; figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. &nbsp;The Gold Institute ceased operations in 2002, but the standard is the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. The Company reports total cash cost on a sales basis. &nbsp;Total cash cost includes mine site operating costs such as mining, processing, administration, royalties and production taxes, but is exclusive of amortization, reclamation, capital and exploration costs. &nbsp;T
otal cash cost is then divided by ounces sold to arrive at the total cash cost of sales. &nbsp;The measure, along with sales, is considered to be a key indicator of a company&#146;s ability to generate operating earnings and cash flow from its mining operations. &nbsp;This data is furnished to provide additional information and is a non-GAAP measure. It should not be considered in isolation as a substitute for measures of performance prepared in accordance with GAAP and is not necessarily indicative of operating costs presented under GAAP.</P>
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    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td><font FACE="Times New Roman" size="2" color="#808080">
    <p align="right"><b>1</b></font></td>
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    <td>&nbsp;</td>
    <td>&nbsp;</td>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B><I>
<font size="2">Background</font></I></B></P>
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<font size="2">The Company is a gold producer engaged in gold mining and related activities including acquisition, exploration, extraction, processing and reclamation. The Company&#146;s operating assets are comprised of the Amapari mine in Brazil, the Cerro San Pedro mine in Mexico, and the Peak mine in Australia. Significant development projects include the New Afton copper-gold project in Canada and a 30% interest in the El Morro copper-gold project in Chile. &nbsp;</font></P>
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<font size="2">With a clear direction in place, New Gold&#146;s strategy focuses on four main pillars; delivery on operational targets (safety, environment and social responsibility, production and cost); maintenance of a strong financial position; internal growth through project development and continuous improvement of our existing assets; and external growth through continued consolidation of junior gold producers. &nbsp;New Gold is working towards maximizing shareholder value through diversified production, maintaining a reduced risk profile and enhancing growth potential. The board of directors, management and the employees of New Gold are committed to achieving this in a socially responsible and sustainable manner.
</font> </P>
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<font size="2">&nbsp;</font><B><I><font size="2">Corporate Developments</font></I></B></P>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Business Combination</I></B></P>
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<font size="2">On June&nbsp;30, 2008 NGI, Metallica and Peak Gold completed a business combination and asset acquisition (the &#147;Transaction&#148;) to form New Gold. &nbsp;In accordance with the provisions of the Canadian Institute of Chartered Accountants (&#147;CICA&#148;) Handbook Section 1581, Business Combinations, Peak Gold has been identified as the acquirer for accounting purposes. &nbsp;As such, this Management&#146;s Discussion and Analysis is a continuation of the operations of Peak Gold, with the comparative information being that of Peak Gold. &nbsp;References to NGI are to the pre-transaction corporate entity whereas a reference to New Gold refers to the post-transaction consolidated entity.</font></P>
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<font size="2">Under terms of the Transaction, shareholders of Peak Gold received 0.1 shares of New Gold common shares and nominal cash consideration for each common share of Peak Gold. The Transaction has been accounted for as a purchase of assets and assumption of liabilities of NGI by Peak Gold. &nbsp;Shareholders of Metallica received 0.9 shares of New Gold common shares and nominal cash consideration for each common share of Metallica. For accounting purposes the acquisition of Metallica has been accounted for as a purchase transaction. Refer to Note 5 of the Company&#146;s unaudited interim consolidated financial statements for the three and nine months ended September 30, 2008 for further information on the Transaction.
</font> </P>
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<font size="2">The Transaction provides the Company with an improved production profile through the diversification of producing assets, increased reserves and resources and it broadens growth potential with an inventory of development and exploration stage assets.
</font> </P>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Investment in Amapari</I></B></P>
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<font size="2">The Company has reviewed the carrying value of its investment in Amapari and has concluded that there has been an impairment. Evaluation of results from the 2007/2008 drill program has not added significant amounts of oxides that would be economical to process in the existing heap leach circuit. Remaining heap leachable material will be exhausted in the fourth quarter of 2009. Production beyond 2009 is subject to ongoing studies on the feasibility of mining and processing the sulphide resources underlying and surrounding the oxide pits. As a result &nbsp;the limited mine life for the oxides and unproven economic viability of the identified sulphide resources, management has written down its investment in Amapari by $156.9 million, net of tax recoveries, to a value of $10.6 million.</font></P>
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    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">2</font></b></td>
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    <td>&nbsp;</td>
    <td>&nbsp;</td>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>New Afton Project Development Schedule</I></B></P>
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<font size="2">Due to the volatility and uncertainty of today&#146;s markets and the Company&#146;s current cash position, coupled with the funding requirements for the fast track construction of the New Afton project, the Company has made the decision to slow development of the project.</font></P>
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<font size="2">Under the revised development plan, surface construction will be shut down in an orderly fashion over the coming weeks while development of the underground workings will continue at a reduced rate to gain access to the bottom of the ore body. &nbsp;The revised schedule projects a cash requirement of approximately $83.0 million in 2009, as compared to the previous fast track schedule which had a cash requirement of $320.0 million for the coming year. &nbsp;Under the original fast track schedule operations were to commence in late 2009, ramping up to achieve full production in the second quarter of 2011. &nbsp;With the revised plan, surface construction would resume at the end of 2010 with full production achieved in the second half of 2012. &nbsp;</font></P>
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  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">3</font></b></td>
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    <td>&nbsp;</td>
    <td>&nbsp;</td>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B><I>
<font size="4">Selected Financial Information</font></I></B></P>
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<font size="2">(US dollars in thousands, except per share amounts and per ounce amounts)</font></P>
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  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three Months Ended</font><SUP><font size="2">(1)</font></SUP></B></P>
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  <font size="2">Four Months ended</font></B></P>
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  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Three Months Ended</font></B></P>
</TD></TR>
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  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">Sept 30,</font></B></P>
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  <font size="2">Jun 30,</font></B></P>
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  <font size="2">Mar 31, </font> </B></P>
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  <font size="2">Dec 31,</font></B></P>
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  <font size="2">Sept 30, </font> </B></P>
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  <font size="2">Jun 30, </font> </B></P>
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  <font size="2">Mar 31, </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">Nov 30, </font> </B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; font-size:8pt; color:#000000">&nbsp;</P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2007 </font> <SUP><font size="2">(4)</font></SUP></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">2007</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">2007 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2007 </font> <SUP><font size="2">(3)</font></SUP></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">2006</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Revenues</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$63,384 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$39,497 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$56,221 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$46,979 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$44,663 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$39,442 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="9%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Gold produced (ounces)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">68,801</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">42,052</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">43,300</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">53,430</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">53,900</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">42,500</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Gold Sales (ounces)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">67,156</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">40,540</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">51,700</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">52,351</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">55,000</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">48,000</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average Realized Price (US$/ ounce)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$870 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$898 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$933 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$793 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$697 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$662 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Depreciation and depletion</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">($9,666)</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($7,657)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($6,404)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($3,766)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($13,258)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($9,481)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Corporate administration</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$8,334 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$3,196 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$4,027 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$5,122 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$2,814 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$5,290 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$67 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$247 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Earnings (loss) from operations</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">($167,588) </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($5,895)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$13,479 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$13,090 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$2,612 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($1,525)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($67)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($247)</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Interest and other income</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$1,123 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$1,355 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$1,967 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$1,198 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$1,250 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$1,651 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$14 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Net earnings (loss)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">($148,852) </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($4,751)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$9,790 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$14,789 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$1,180 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($1,289)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($54)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$10,188 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Earnings (loss) per share</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">($0.70) </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($0.05)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$0.01 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$0.02 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$0.09 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Cash flow from (to) operating activities</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">($10,459)</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($2,987)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$18,394 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$12,944 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$7,823 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$5,856 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($3)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($63)</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Total Cash costs (per gold ounce) </font> <SUP><font size="2">(2)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$566 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$742 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$427 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$398 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$303 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$343 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Cash and Cash Equivalents</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">$251,131 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$319,179 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$197,636 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$149,924 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$77,111 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$77,388 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$643 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin-left:0pt; margin-top:0; margin-right:4; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$328 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Short term investments</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$ nil</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$32,440 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$1,110 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Investments</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$87,645 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$91,193 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="21%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Total Assets</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right><B>
  <font size="2">$1,979,246</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$2,166,962 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$590,691 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$572,398 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$456,912 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$ nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$nil</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:4; margin-top:0; margin-bottom:0" align=right>
  <font size="2">$342 </font> </P>
</TD></TR>
</TABLE>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-12pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000">
<font size="2">(1)</font></P>
<P style="margin:0pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Operating results of Amapari and Peak Mines are included from April 3, 2007 to September 30, 2008. &nbsp;Results for Cerro San Pedro and New Afton are included from the period of June 30, 2008 to September 30, 2008.</font></P>
<P style="margin:0pt; padding-left:22.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-12pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">(2)</font></P>
<P style="margin:0pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The calculation of total cash cost per ounce of gold for Peak Mines is net of by-product copper sales revenue. The calculation of total cash cost per ounce of gold for Cerro San Pedro is net of by-product silver sales revenue.</font></P>
<P style="margin:0pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-12pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">(3)</font></P>
<P style="margin:0pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company changed its fiscal year end from November 30 to December 31, commencing with the thirteen month period ending December 31, 2007. As a result, the quarter ended March 31, 2007 is a four month period.</font></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-12pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">(4)</font></P>
<P style="margin:0pt; padding-left:40.5pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">In the fourth quarter, the company finalized the purchase price allocation of the assets and liabilities acquired in the acquisition of Amapari and Peak Mines. The result of the fourth quarter includes adjustments made upon completion of the allocation of the purchase consideration of Amapari and Peak Mines.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">4</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B><I>
<font size="2">Overview of the third quarter 2008 financial results</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Net loss for the third quarter of 2008 of $148.9 million, which includes an impairment charge of $156.9 million (net of tax recovery of $8.4 million) and $2.5 million in stock-based compensation. Net earnings of $8.0 million (excluding the impairment charge of $156.9 million) compared to net earnings of $1.2 million for the third quarter of 2007. The increase is mainly attributed to a $15.5 million gain on foreign exchange in the third quarter of 2008 compared to $1.1 million foreign exchange loss in the third quarter of 2007. &nbsp;Foreign exchange gains arise mainly from Canadian dollar denominated monetary items and revaluation of foreign future income tax liabilities. Loss from operations was $167.6 million compared to earnings from operations of $2.6 million for the same period last year. Total cash cost was $566 per ounce for the third quarter of 2008 compared to $303 in the third quarter of 2007. The increase can be attributed to higher operating costs at the Amapari mine and lower copp
er concentrate sales (by-product credits) at Peak Mines compared to the same period last year and the impact of falling copper prices on copper revenues not yet received.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
&nbsp;<p>&nbsp;</p>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">5</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">Operation Review</font></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">Amapari, Brazil</font></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
<font size="2">(US dollars in thousands, except ounce and per ounce amounts)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000">&nbsp;</P>
<TABLE style="margin-left:0pt; border-collapse:collapse" width="100%" bordercolor="#111111" cellpadding="0" cellspacing="0"><TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top colspan=5>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">Three Months Ended</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top rowspan=2>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
  <font size="2">Operating Data</font></B><SUP><font size="2"> </font> </SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">Sept 30,</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">June 30,</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">Mar 31, </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">Dec 31, </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">Sept 30,</font></P>
</TD></TR>
<TR>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2008</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2008</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2007</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2007</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of ore &nbsp;mined</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">493,285</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">353,813</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">448,752</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">598,695</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:0.5pt solid #000000" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">591,993</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of low grade mined</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">260,670</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">251,042</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">177,081</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">247,485</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">162,183</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of waste removed</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">2,708,792</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">1,491,231</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">1,198,743</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2,193,579</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2,273,088</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Ratio of waste to ore</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">6.0</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">4.9</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">3.1</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">4.1</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">4.1</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of ore processed</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">517,239</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">388,000</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">384,000</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">529,800</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">519,400</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average mill head grade (grams/tonne)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">1.89</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">1.76</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2.35</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">3.41</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">2.41</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average recovery rate (%)</font><SUP><font size="2"> (1)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">76%</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">60%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">63%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">62%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">62%</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Gold (ounces) &nbsp;</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:8pt; color:#000000">
  <font size="2">&#150; Produced</font><SUP><font size="2"> (2)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">17,752</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">20,938</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">18,201</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">24,400</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">22,200</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:8pt; color:#000000">
  <font size="2">&#150; Sold</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">16,661</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">22,099</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">20,453</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">22,600</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">22,200</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average realized gold price (per ounce)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">$853 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$895 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$918 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$785 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$684 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Total cash costs (per ounce)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">$882 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$968 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$650 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$583 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$491 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
<P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">Financial Data</font></B></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <p style="margin-right: 4">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Revenues</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right><B>
  <font size="2">$14,213 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$19,775 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$18,767 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$17,710 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$15,190 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
<P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
<font size="2">(Loss) Earnings from operations*</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">($170,660)</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($7,668)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($327)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="padding:0pt; color:#000000; margin-right:4; margin-top:0pt; margin-bottom:0pt" align=right>
  <font size="2">$3,751 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=right valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">($1,560)</font></P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:-12pt; padding-left:38.25pt; padding-top:0pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align=justify>
<font size="2">(1)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:38.25pt; padding-top:0pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Gold recovery is determined when the individual leach pads are reclaimed and production is reconciled.</font></P>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:-12pt; padding-left:38.25pt; padding-top:0pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align=justify>
<font size="2">(2)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:38.25pt; padding-top:0pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Tonnes of ore processed each quarter do not necessarily correspond to ounces produced during the quarter, as there is a time delay between placing tonnes on the leach pad and pouring ounces of gold.</font></P>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:0pt; padding:0pt; text-indent:18.5pt; color:#000000" align=justify>
<font size="2">(*) &nbsp;&nbsp;&nbsp;Includes the impairment charge of $156.9 million (net of tax recoveries of $8.4 million)</font></P>
<P style="margin-left:0pt; margin-top:4.5pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Amapari&#146;s gold production for the third quarter of 2008 was 17,752 ounces compared to 22,200 ounces for the same period in 2007. The lower gold production results primarily from lower gold grades.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Total cash cost per ounce for the quarter was $882 per ounce compared to $491 per ounce in the third quarter of 2007. High cash costs result from lower production, increased cyanide and carbon costs and increased maintenance and other operating costs, partially offset by the weakening of the Brazilian currency (real) against the US dollar (&#147;USD&#148;).
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The positive results of a major overhaul of the operating systems at Amapari that commenced early in the quarter are evidenced by a significant increase of recoverable ounces on the leach pads. Recoverable ounces placed on the leach pads increased from 16,400 in the second quarter to 23,600 in the third quarter, an increase of 44 percent. Higher mobile equipment availabilities resulted in 33 percent more tonnes placed. &nbsp;Full impact on production and cash cost from the recent improved operating performance is expected to be realized in the fourth quarter.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">6</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Revenue for the quarter was $14.2 million, compared to $15.2 million in the prior year third quarter. The decrease is due to lower sales volume, which was partially offset by the higher realized gold price. &nbsp;Losses for the current quarter were $5.4 million (excluding impairment charge) compared to $1.6 million a year ago and are attributed to higher processing costs, lower gold sales and reduced grade of ore offset by partially higher realized gold prices. &nbsp;Cash flow used in operations was $5.1 million for the third quarter of 2008 compared to $0.5 million generated from operations in the third quarter of 2007. The decrease is the result of lower gold sales revenue due to lower gold grades combined with increased costs.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Evaluation of results from the 2007/2008 drill program has not added significant amounts of oxide that would be economical to process in the existing heap leach circuit. Remaining leachable material will be exhausted in the fourth quarter of 2009. &nbsp;As a result of the limited remaining life of the oxide material high operating costs and lower than expected gold grades the Company has recorded an impairment charge of $156.9 million, net of a tax recovery of $8.4 million.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">7</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">Peak Mines, Australia</font></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
<font size="2">(US dollars in thousands, except ounce and per ounce amounts)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<TABLE style="margin-left:0pt; border-collapse:collapse" width="100%" bordercolor="#111111" cellpadding="0" cellspacing="0"><TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top colspan=5>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">Three Months Ended</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top rowspan=2>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
  <font size="2">Operating Data</font></B><SUP><font size="2"> </font> </SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Sept 30,</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Jun 30,</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Mar 31,</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;Dec 31,</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Sept 30,</font></B></P>
</TD></TR>
<TR>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2007</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2007</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="40%">
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="12%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="12%">
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="12%">
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="12%">
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="12%">
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="40%">
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of ore &nbsp;milled</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;196,633 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">186,326</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">179,087</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">188,933</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">182,835</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="40%">
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average mill head grade</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Gold (grams/tonne)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">4.95</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">4.18</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">4.96</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">5.55</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">6.21</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Copper (%)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">0.67%</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">0.46%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">0.70%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">0.59%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">0.65%</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average recovery rate</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Gold (%)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">85.1%</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">84.2%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">87.9%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">86%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">87%</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Copper (%)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">81.1%</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">64.9%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">78.9%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">70%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">74%</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2"><BR></font></P>
<P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
<font size="2">Produced</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Gold (ounces)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26,662
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">21,114</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">25,099</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">29,030</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">31,703</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Copper (thousands of pounds)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,365
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">1,237</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">2,172</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">1,746</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">1,932</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Sold</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Gold (ounces)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24,425
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">18,441</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">31,247</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">29,751</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">32,800</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Copper (thousands of pounds)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,715
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">855</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">2,551</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">2,469</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">1,908</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average realized price</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Gold (per ounce)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$878
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$902 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$943 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$799 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$707 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&nbsp;&#150; Copper (per pound)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$2.76
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$4.27 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$3.75 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$2.99 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$3.47 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Total cash cost per gold ounce</font><SUP><font size="2"> (1)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">$560</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$472 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$281 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$258 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$176 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
  <font size="2">Financial Data</font></B></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; font-size:8pt; color:#000000" align=right>&nbsp;</P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; font-size:8pt; color:#000000" align=right>&nbsp;</P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; font-size:8pt; color:#000000" align=right>&nbsp;</P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; font-size:8pt; color:#000000" align=right>&nbsp;</P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Revenues</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$21,732 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$19,722 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$37,454 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$29,278 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$29,467 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <p style="margin-top: 0; margin-bottom: 0">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Earnings from operations</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$6,018
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$2,944 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$17,144 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$13,416 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0 0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$6,494 </font> </P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:-12pt; padding-left:54pt; padding-top:0pt; padding-right:36pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align=justify>
<font size="2">(1)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:54pt; padding-top:0pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">The calculation of total cash cost per ounce of gold is net of by-product sales revenue. If the copper sales were treated as a co-product, average total cash cost at Peak Mines for the three months ended September 30, 2008, would be $562 per ounce of gold and $0.83 per pound of copper compared to $309 per ounce of gold and $2.28 per pound of copper in the previous year.
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Peak Mines produced 26,662 ounces of gold and 2.37 million pounds of copper in the third quarter versus 31,703 ounces of gold and 1.93 million pounds of copper for the same period in 2007. Metal production returned to planned levels with an improvement in ore grade as mining focused on primary stopes. Mill throughput of 196,633 tonnes, remains at record levels, reflecting consistent underground production and high mill availability.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">8</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Total cash cost for the quarter was higher at $560 per ounce compared to $176 per ounce in the same quarter in 2007 as a result of a negative adjustment to copper concentrate accounts receivable due to decreased copper prices. The negative adjustment to concentrate accounts receivable increased total cash cost, net of by-product, by approximately $155 per ounce. The balance of the copper concentrate receivable at the end of September was $21.5 million compared to $25.0 million at the end of June. &nbsp;Approximately $18.9 million was received as a partial prepayment subsequent to the quarter-end however; the copper price on this amount may not be fixed until the end of 2008. Gold sales decreased to 24,425 ounces in the third quarter of 2008 from 32,800 ounces in the same quarter of 2007 due to lower gold grades mined. The average realized gold price for the quarter was $878 compared to $707 in the same quarter in 2007. Copper revenues were down for the quarter due to lower volume sold and lowe
r copper prices. &nbsp;Copper recovery rates increased to 81.1% compared to 74.0% in the third quarter of 2007. &nbsp;Cash flow provided by operations for the third quarter was $5.6 million compared to $7.8 million for the third quarter in 2007.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">9</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">Operation Review</font></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">Cerro San Pedro, Mexico</font></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
<font size="2">(US dollars in thousands, except ounce and per ounce amounts)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<TABLE style="margin-left:0pt; border-collapse:collapse" width="100%" bordercolor="#111111" cellpadding="0" cellspacing="0"><TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top rowspan=2>&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top colspan=3>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">Three Months Ended</font><SUP><font size="2"> (1)</font></SUP></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%" bgcolor="#E9F1F8">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top rowspan=2>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
  <font size="2">Operating Data</font></B><SUP><font size="2"> </font> </SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Sept 30,</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Jun 30,</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">Mar 31, </font> </B></P>
</TD></TR>
<TR>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2008</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of ore &nbsp;mined</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2,059,429</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">2,440,293</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">2,276,533</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of waste removed</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">3,831,513</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">3,074,769</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">3,051,869</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Ratio of waste to ore</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">1.86</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">1.26</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">1.34</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Tonnes of ore processed</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">2,059,429</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">2,440,293</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">2,276,533</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average mill head grade (grams/tonne)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.59
  </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">0.64</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">0.61</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average Gold recovery rate (%)</font><SUP><font size="2">
  </font> </SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">65%</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">41%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">41%</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average Silver recovery rate (%)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">18%</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">19%</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">15%</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Gold (ounces) </font> </P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
  <font size="2">&#150; </font> </B><font size="2">Produced<B><SUP> </SUP></B>
  </font><SUP><font size="2">(2)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">24,387</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">20,653</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">18,290</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&#150; </font> </B><font size="2">Sold</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">26,070</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">22,190</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">15,922</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Silver (ounces)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&#150; Produced </font> <SUP><font size="2">(2)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">282,055</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">283,749</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">228,623</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">&nbsp;&nbsp;&#150; Sold</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">305,430</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">300,728</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">203,973</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Average realized gold price (per ounce)</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">$874 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$897 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$933 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Total cash cost net Silver credits (per ounce)</font><SUP><font size="2">(3)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">$369 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$375 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$496 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000"><B>
  <font size="2">Financial Data</font></B></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">&nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top><P style="margin:0pt; padding:0pt; text-indent:0pt; font-size:8pt; color:#000000" align=right>&nbsp;</P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:0.5pt solid #000000" align=left valign=top><P style="margin:0pt; padding:0pt; text-indent:0pt; font-size:8pt; color:#000000" align=right>&nbsp;</P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">Revenues</font></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">$27,439 </font> </B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$25,050 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$18,477 </font> </P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000">
  <font size="2">(Loss) Profit from operations</font><SUP><font size="2">(4)</font></SUP></P>
</TD>
  <TD style="background-color:#E9F1F8; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right><B>
  <font size="2">$5,618</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$10,523 </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top>
  <P style="margin:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right>
  <font size="2">$7,497 </font> </P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:-12pt; padding-left:54pt; padding-top:0pt; padding-right:36pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align=justify>
<font size="2">(1)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:54pt; padding-top:0pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Commercial production at Cerro San Pedro commenced on May 1, 2007 however; the operation was still in its ramp up stage and production results are not comparable and therefore have not been presented. As such, the comparative analysis will be presented using prior quarter information.</font></P>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:-12pt; padding-left:54pt; padding-top:0pt; padding-right:36pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align=justify>
<font size="2">(2)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:54pt; padding-top:0pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Tonnes of ore processed each quarter do not necessarily correspond to ounces produced during the quarter, as there is a time delay between placing tonnes on the leach pad and pouring ounces of gold.</font></P>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:-12pt; padding-left:54pt; padding-top:0pt; padding-right:36pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align=justify>
<font size="2">(3)</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:54pt; padding-top:0pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">The calculation of total cash cost per ounce of gold is net of by-product sales revenue. If the silver sales were treated as a co-product, average total cash costs at Cerro San Pedro for the three months ended September 30, 2008, would be $455 per ounce of gold and $7.94 per ounce of silver.</font></P>
<P style="margin-left:0pt; margin-top:12pt; margin-bottom:-12pt; padding-left:54pt; padding-top:0pt; padding-right:36pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align=justify>
<font size="2">(4)</font></P>
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<font size="2">Cerro San Pedro operations are included in New Gold&#146;s operating results for the period subsequent to June 30, 2008 only. &nbsp;Prior quarter information is presented for information purposes only.</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
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<font size="2">Cerro San Pedro achieved good results in the third quarter with gold sales increasing to 26,070 ounces compared to 22,190 ounces in the second quarter. Gold and silver production for the third quarter was 24,387 ounces and 282,055 ounces, respectively compared to 20,653 and 283,749 in the prior quarter. The increase in production over the second quarter was due to a higher recovery as leach pads approach equilibrium.
</font> </P>
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&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">10</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Total cash cost net of by-product sales for the third quarter was $369 per ounce, down from $375 per ounce in the second quarter. Cash cost was lower in the third quarter mainly because of the increase in the volume of gold sold offset by the reduction in the selling price of silver, higher strip ratio and increased consumable costs. &nbsp;&nbsp;Cash flow provided by operations for the third quarter was $7.0 million.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
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<font size="2">Revenue for the third quarter increased by 10% to $27,439 compared to$25,050 in the second quarter as a result of incremental gold volume of 3,880 ounces sold in the third quarter, although the average realized price of gold fell quarter over quarter from $897 to $874 per ounce and the average realized silver price dropped from $17.13 to $15.24 per ounce.
</font> </P>
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&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">11</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B><I>
<font size="2">Project Development Review</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B>
<font size="2">New Afton Copper-Gold Project</font></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Engineering and construction activities progressed at the New Afton project during the quarter. The underground achieved 1,432 meters of advance during the third quarter compared to 1, 267 metres in the second quarter of 2008. &nbsp;The underground work also included boring of the second ventilation raise, some 430 metres in length.</font></P>
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&nbsp;</P>
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<font size="2">Surface activities continued during the quarter as the majority of the earthworks for the mill site were completed along with concrete foundation work in the mill. &nbsp;A total of 490,000 cubic meters of earth were moved during the quarter and 4,265 cubic yards of concrete were placed for the mill including SAG and Ball Mill foundations and mill building footings.
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
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<font size="2">Despite good progress on the fast track project development schedule, the Company has made the decision to slow development activities of the New Afton Project in light of the Company&#146;s current cash position, volatile equity markets, global uncertainty in the capital markets and increasing cost pressures. &nbsp;The underground mine development activities will continue at a reduced rate and surface construction activities will be wound down. &nbsp;This slowdown will be implemented in a manner that protects the value of expenditure to date and facilitates the re-commencement of activities when the decision is made to resume full construction of the project. &nbsp;The revised schedule involves development of access to the base of the ore body by the end of 2010 followed by completion of underground development and surface construction to achieve full production in the second half of 2012. &nbsp;This schedule is dependent on the Company obtaining the required financing for the project by the 
end of 2010, and if this financing is obtained prior to the end of 2010 the schedule can be revised accordingly.</font></P>
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&nbsp;</P>
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<font size="2">During this slowdown period the Company will focus on the following areas of development:</font></P>
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&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
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<font size="2">Continuing access development to the base of the ore body;</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
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<font size="2">Converting underground activities to an employee based workforce from the use of contractors;</font></P>
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<font size="2">&#8226;</font></P>
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<font size="2">Continuing programs to ensure all existing permits are maintained and further required permits are obtained;
</font> </P>
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<font size="2">&#8226;</font></P>
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<font size="2">Completing the mill enclosure for storage of equipment; </font> </P>
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<font size="2">&#8226;</font></P>
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<font size="2">Taking delivery of certain items already ordered and closing out other commitments; and</font></P>
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<font size="2">&#8226;</font></P>
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<font size="2">Completing detailed engineering, which is approximately 70% complete at the end of the third quarter.</font></P>
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&nbsp;</P>
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<font size="2">The revised schedule projects a total cash requirement of approximately $83.0 million in 2009, as compared to the existing fast track schedule which has a cash requirement of $320.0 million.
</font> </P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B>
<font size="2">El Morro Copper-Gold Project </font> </B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
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<font size="2">The El &nbsp;Morro project in Chile represents an early stage development project. &nbsp;The Company owns a 30% interest in the project with the project operator, Xstrata plc (&#147;Xstrata&#148;).</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has an agreement with Xstrata whereby Xstrata will finance, at the Company&#146;s election, 70% of the Company&#146;s 30% share of El Morro&#146;s project development costs at Xstrata&#146;s cost of financing plus 100 basis points. &nbsp;Xstrata would be repaid through 80% of the Company&#146;s share of future project cash flow. &nbsp;</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">12</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Exploration Review</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B>
<font size="2">Rio Figueroa</font></B></P>
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&nbsp;</P>
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<font size="2">In June 2008, the Company entered into an agreement with Antofagasta Minerals S.A. (&#147;Antofagasta&#148;) which provides Antofagasta an option to earn up to a 70% interest in the Company&#146;s Rio Figueroa copper-gold exploration project in Chile. &nbsp;Antofagasta will make option payments to the underlying landowners totaling $2.7 million through September 2009 to earn a 30% interest in the Rio Figueroa project. &nbsp;Antofagasta can increase its interest in the project from 30% to 50% by making qualified exploration expenditures totaling $7.0 million through June 2012. &nbsp;Antofagasta can further increase its interest in the project from 50% to 70% by making a cash payment to the Company of $5.0 million and delivering a feasibility study for the project by June 2015. &nbsp;</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Review of Financial Results</font></I></B></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Three months ended September 30, 2008 compared to the three months ended September 30, 2007</font></I></B></P>
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&nbsp;</P>
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<font size="2">Net losses amounted to $148.9 million for the three months ended September 30, 2008, compared to net earnings of $1.2 million in the same period last year. &nbsp;The loss is mainly attributable to the $156.9 million write-down of Amapari, offset by the foreign exchange gain realized due to the recent increase in value of the US dollar.</font></P>
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&nbsp;</P>
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<font size="2">The net losses for the three months ended September 30, 2008 were impacted by the following factors:</font></P>
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&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Revenues increased by $18.7 million in the third quarter of 2008 compared to the third quarter in 2007. The increase is primarily due to the inclusion of the Cerro San Pedro operating results and higher realized gold prices, which increased 25% over the previous year;
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
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<font size="2">Operating expenses &nbsp;increased by 79% compared to the same quarter in 2007 as a result of inclusion of the Cerro San Pedro operations and higher operating costs related to increases in consumables and maintenance;</font></P>
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<font size="2">&#8226;</font></P>
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<font size="2">Depreciation and depletion, which relates to mining activities, was $9.7 million for the quarter. &nbsp;Depreciation and depletion was $3.0 million for Amapari, $3.9 million for Cerro San Pedro and $2.7 million for Peak Mines. &nbsp;This was $3.6 million lower compared to the third quarter of 2007. &nbsp;In December 2007, the Company finalized its valuation of the acquisition of Amapari and Peak Mines resulting in adjustments to the fair value of depletable properties &nbsp;and a &nbsp;consequent reduction to depletion expenses;</font></P>
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<font size="2">&#8226;</font></P>
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<font size="2">Overall, corporate activities have increased as a result of merged operations from the business combination. Corporate administration was $5.5 million higher in the third quarter of 2008 due to one-time business combination related costs of approximately $2.5 million and increased stock based compensation charges. Stock-based compensation was $2.5 million for third quarter of 2008 compared to $1.0 million in the same quarter in 2007;</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
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<font size="2">The Company recorded a $15.5 million foreign exchange gain during the period as a result of the strengthening US dollar compared to the Australian dollar, Brazilian real, Mexican peso and Canadian dollar. The majority of the gain arose due to the revaluation of monetary assets and liabilities and future income tax liabilities recorded on the acquisition of Amapari, Peak Mines, Metallica and NGI.</font></P>
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&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">13</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Nine months ended September 30, 2008 compared to the ten months ended September 30, 2007</font></I></B></P>
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&nbsp;</P>
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<font size="2">It should be noted that the Company changed its fiscal year end from November 31 to December 31 in 2007 to coincide with the year ends of Amapari and Peak Mines. As a result, the Company&#146;s operating results as at September 30, 2007 reflect operations for a ten month period.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The net losses of $143.8 million for the nine months ended September 30, 2008 were impacted by the following factors:</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Revenues increased by &nbsp;89% or $75.0 million in the nine months ended September 30, 2008 as compared to the same period in 2007, primarily as result of a &nbsp;full nine months of sales for Amapari and Peak Mines compared to only six &nbsp;months of sales for the same period in 2007 and the addition of Cerro San Pedro&#146;s revenues for 3 months in 2008 and higher realized gold prices, which increased 25% over last year;</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Operating expenses increased by 118% to $108.9 million (2007 - $50.0 million), primarily due to a full nine months of &nbsp;production in 2008 for Peak Mines and Amapari and inclusion of the Cerro San Pedro mine for three months. The nine months ended September 30, 2007 includes operating results for Amapari and Peak Mines from April 3, 2007 and April 27, 2007, respectively to September 30, 2007;</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Depreciation and depletion increased by 4% to $23.7 million (2007 - $22.7 million) primarily due to a full nine months of commercial production and inclusion of the Cerro San Pedro mine for three months. In addition, the finalized purchase price allocation of assets and liabilities acquired in the acquisition of Peak Mines and Amapari were not completed until the fourth quarter of 2007. Accordingly, the nine months ended September 30, 2008 included depreciation based on finalized purchase price allocations while the same 2007 period did not; &nbsp;</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Corporate administration increased by 90% to $15.6 million (2007 - $8.2 million) as a result of increased corporate activity due to the one time only business combination costs of approximately $2.5 million</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Exploration expense increased by $3.5 million in the nine months ended September 30, 2008 as compared to the same period in 2007, as a result of continued exploration work at Amapari and Peak Mines and other properties acquired in the Transaction;</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Interest income of which the majority was earned on funds received from a private placement in December 2007 and the cash acquired in the business combination which closed on June 30, 2008 increased by $1.5 million in the nine months ended September 30, 2008 as compared to the same period in 2007;
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Net losses amounted to $143.8 million for the nine months ended September 30, 2008, compared to a net loss of $0.2 million in the same period last year. &nbsp;Higher net losses are primarily a result of the Amapari write-down, partially offset by a full nine months of commercial operations and significant increases in realized gold prices ($898 per ounce compared to $681 per ounce in the same period last year);</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:-11pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:-18pt; color:#000000" align="justify">
<font size="2">&#8226;</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Total cash costs per ounce were $568 for the nine months ended September 30, 2008 as compared to $322 in the same period in 2007. &nbsp;The increase is due to lower production at Amapari and Peak Mines, higher labour costs, rising cost of consumables, unplanned maintenance costs offset by the weakening of the Australian dollar, Brazilian real and Mexican peso.</font></P>
<P style="margin:0pt; padding-left:36pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">14</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Non-GAAP Measure &#150; Total Cash Cost per Gold Ounce Calculation</font></I></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company reports total cash cost on a sales basis. In the gold mining industry, this is a common performance measure but does not have any standardized meaning, and is a non-GAAP measure. The Company follows the recommendations of the Gold Institute standard. The Company believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate the Company&#146;s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The following table provides a reconciliation of total cash cost per ounce to the financial statements:</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<TABLE style="margin-left:0pt; border-collapse:collapse" width="100%" bordercolor="#111111" cellpadding="0" cellspacing="0"><TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">(In thousands of USD except for ounces </font> </P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
<font size="2">of gold and cash cost per ounce)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">Three months</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">ended</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">September 30,</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">Three months</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">ended</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">September &nbsp;30,</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">2007</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">Nine months ended</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">September 30,</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">&nbsp;2008</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
  <font size="2">Ten months</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">ended</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">September 30,</font></B></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="2">2007</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">Operating Expenses per financial statements</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$44,248</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$24,662</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$108,880</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$49,951</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">Treatment and refining charges </font> </P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
<font size="2">on concentrate sales</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">845</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">1,446</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">3,487</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">3,290</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">By-product copper sales</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(1,136)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(7,730)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(14,843)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(16,877)</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">Non-cash adjustments</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(5,947)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(1,713)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(6,987)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">(3,239)</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">Total cash costs </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">38,010</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">16,655</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">90,537</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">33,125</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">Ounces of gold sold</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">67,156</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">55,000</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">159,396</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">102,997</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
  <font size="2">Total cash cost per ounce of gold</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$566</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$303</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$568</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:0.5pt solid #000000" align=left valign=top>
  <P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.4pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=center>
  <font size="2">$322</font></P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">15</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000"><B><I>
<font size="2">Liquidity and Capital Resources</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">As of September 30, 2008, the Company held cash and cash equivalents of $251.1 million (December 31, 2007 - $149.9 million). &nbsp;The majority of the increase is attributed to cash and cash equivalents of $134.2 million (net of acquisition costs) acquired from the closing of the Transaction. The Company had approximately $8.6 million in short-term borrowings at Amapari at the end of the quarter.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company&#146;s cash and cash equivalents are invested in highly liquid, lower risk, interest-bearing investments with maturities of 90 days or less from the original date of acquisition. &nbsp;The counter-parties include banks, governments and government agencies. &nbsp;This does not include the asset backed commercial paper (&#147;ABCP&#148;) discussed below.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">As part of the Transaction, the Company acquired $170.0 million in ABCP which is rated R1-high by Dominion Bond Rating Service. &nbsp;In mid-August 2007, a number of non-bank sponsors of ABCP, including those with which New Gold had invested, announced that they could not place ABCP due to unfavorable conditions in the Canadian capital markets. &nbsp;Accordingly, there is presently no active market for the ABCP held by the Company. The Company classifies its holdings in ABCP as long-term investments and has estimated the fair value on ABCP at approximately $87.6 million as at September 30, 2008. &nbsp;There can be no assurance that this estimated value will be realized. Subsequent adjustments, which could be material, may be required in future reporting periods (Refer to the Risks and Uncertainties section for more information).
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">As of September 30, 2008, the Company had working capital of $260.3 million (December 31, 2007 - $214.1 million). During the quarter, the Company&#146;s working capital was negatively impacted by the decline in copper prices during the third quarter of 2008. &nbsp;As of September 30, 2008, working capital includes copper concentrate receivables at a value of $21.5 million, which has been revalued at September 30, 2008 at $2.76 per pound. Corresponding to this amount, an $18.9 million partial pre-payment was received in the fourth quarter of 2008 at a price of $1.87 per pound with final pricing and settlement expected to occur before year end. &nbsp;</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">In the opinion of management, the working capital at September 30, 2008, together with cash flows from operations, are sufficient to support the Company&#146;s normal operating requirements on an ongoing basis. &nbsp;&nbsp;However, taking into consideration the Company&#146;s current cash position, volatile equity markets, global uncertainty in the capital markets and increasing cost pressures, the Company is reviewing all expenditures, including its 2009 capital and operating budgets, and in particular, the New Afton Copper-Gold Project which will be slowed down to reduce the overall cash requirement in 2009 (refer to the New Afton Copper-Gold Project section for more information). &nbsp;The Company&#146;s focus in this overall review is on ensuring adequate liquidity and flexibility to support its growth strategy while maintaining production levels at its current operations. &nbsp;</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company had expected to receive additional funds of approximately $50.0 million from the exercise of 14,456,965 share purchase warrants at Cdn $3.44 per share which expire on December 11, 2008. &nbsp;There is a high degree of uncertainty regarding the likelihood of the funds being received due to the current share price and the difficult current market conditions.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">During the quarter ended September 30, 2008, the Company had negative operating cash flows of $(10.5) million.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">During the three months ended September 30, 2008, the Company invested a total of $53.9 million in mining interests, including $1.6 million at Amapari, $9.5 million at Peak Mines, $3.3 million at Cerro San Pedro and $39.1 million at New Afton.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">16</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B>
<font size="2">Contractual Obligations:</font></B></P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style:solid; border-bottom-width:1">
    &nbsp;</td>
    <td colspan="5" align="center" style="border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium; border-top-style:none; border-top-width:medium; border-bottom-style:solid; border-bottom-width:1">
    &nbsp;</td>
  </tr>
  <tr>
    <td style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; ">
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td colspan="5" align="center" style="border-left-style:solid; border-left-width:1; border-right-style:solid; border-right-width:1; border-bottom-style:solid; border-bottom-width:1">
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Payments Due by Period</font></td>
  </tr>
  <tr>
    <td style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium">
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Less than 1</font></td>
    <td align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
  </tr>
  <tr>
    <td style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Contractual Obligations (in
    000's USD$)</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Total</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">year</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">1-3 years</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">4-5 years</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">After 5 years</font></td>
  </tr>
  <tr>
    <td style="border-style: solid; border-width: 1"><font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Long-Term Debt</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">275,502</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">275,502</font></td>
  </tr>
  <tr>
    <td style="border-style: solid; border-width: 1"><font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Interest Payable on Long-Term
    Debt</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">216,816</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">24,956</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">49,911</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">49,911</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">92,038</font></td>
  </tr>
  <tr>
    <td style="border-style: solid; border-width: 1"><font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Commitments &amp; Permits</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">46,656</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">40,759</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">4,482</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">1,415</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
  </tr>
  <tr>
    <td style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium">
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Other</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">239</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">37</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">192</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">10</font></td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: none; border-bottom-width: medium" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
  </tr>
  <tr>
    <td style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
    <td width="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" nowrap>
    <p style="margin-left: 10; margin-right: 10">&nbsp;</td>
  </tr>
  <tr>
    <td style="border-style: solid; border-width: 1"><font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">Total Contractual Obligations</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">539,214</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">65,752</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">54,585</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">51,336</font></td>
    <td width="12%" align="right" style="border-style: solid; border-width: 1" nowrap>
    <font SIZE="2">
    <p style="margin-left: 10; margin-right: 10">367,540</font></td>
  </tr>
</table>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The majority of the Company&#146;s contractual obligations consist of long-term debt and interest payable. &nbsp;Long-term debt obligations comprise of senior secured notes and subordinated convertible debentures. &nbsp;The senior secured notes were originally issued by NGI pursuant to a note indenture dated June 28, 2007, mature and become payable on June 28, 2017 and bear interest at a rate of 10% per annum. &nbsp;At September 30, 2008 the face value of the notes totaled $223.6 million (Cdn $237.0 million) with remaining interest payable totaling $201.2 million. Interest is payable in arrears in equal semi-annual installments on January 1 and July 1 each year.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has 55,000 subordinated convertible debentures that bear interest at a rate of 5% per annum and are convertible by the holders into common shares of the Company at any time up to June 28, 2014. &nbsp;At September 30, 2008 the aggregate principal of the subordinated convertible debentures was $51.9 million (Cdn $55.0 million) with remaining interest payable totaling $15.6 million. Interest is payable in arrears in equal semi-annual installments on January 1 and July 1 each year. &nbsp;</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">As of November 11, 2008, there were 212,840,746 common shares of the Company outstanding. The Company had 9,102,605 stock options outstanding under its share option plan. In addition, the Company had 74,182,276 common share purchase warrants outstanding.</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">17</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Commitments</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has entered into a number of contractual commitments related to equipment orders to purchase long lead items or critical pieces of mining equipment necessary to commence development of the New Afton project. &nbsp;At September&nbsp;30, 2008, these commitments totaled $40.8 million and are expected to fall due over the next 12 months. &nbsp;</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Off-Balance Sheet Transactions</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has no off-balance sheet arrangements. </font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Risks and uncertainties</font></I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Readers of this Management Discussion and Analysis should give careful consideration to the information included or incorporated by reference in this document and the Company&#146;s unaudited interim consolidated financial statements and related notes. Significant risk factors for the Company are metal prices, currency fluctuations, government regulations, foreign operations, environmental compliance, the ability to obtain additional financing, risks relating to recent acquisitions, and dependence on management.</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Metals Prices</I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Gold, silver and copper prices have a direct impact on the Company&#146;s profitability. Metal prices are affected by a variety of factors including interest rates, exchange rates, international economic and political trends, inflation or deflation, fluctuations in the value of the US dollar and foreign currencies, global and regional supply and demand and the political and economic conditions of major metal producing countries throughout the world. The Company does not presently have a metals hedging policy nor has it conducted any metals hedging in the past.</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Currency Fluctuations</I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Exchange rate fluctuations may affect the costs that the Company incurs in its operations. Gold, silver and copper are sold in US dollars and the Company&#146;s costs are incurred principally in Canadian dollars, Australian dollars, Mexican pesos and Brazilian reals. The appreciation of non-US dollar currencies against the US dollar can increase the cost of gold, silver and copper production and capital expenditure in US dollar terms.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has recorded future income tax liabilities on mineral interests relating to the acquisitions of Amapari, Peak Mines, Metallica and NGI. The future income tax liabilities are monetary items, which are revalued each period end at current exchange rates, with the gain or loss recorded in income for the period.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has assessed this risk and has not presently adopted an active currency hedging program given the correlation between metal prices and the currencies in which the Company operates. In 2008, favorable changes in metal prices have mitigated the adverse effect of the appreciation of the foreign currency against the US dollar.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">18</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Government Regulations</I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The mining, processing, development and exploration activities of the Company are subject to various laws governing prospecting, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, land claims of local people and other matters. No assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could have an adverse effect on the Company&#146;s financial position and results of operations.
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Foreign Operations</I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company&#146;s operations are currently conducted in Brazil, Mexico, Canada, the United States, Chile and Australia, and as such the Company&#146;s operations are exposed to various levels of political, economic and other risks and uncertainties. These risks and uncertainties vary for each country and include, but are not limited to, extreme fluctuations in currency exchange rates; high rates of inflation; labor unrest; exploration and fluctuations in currency and exchange rates; renegotiation or nullification of existing concessions, licenses, permits and contracts; illegal mining; changes in taxation policies; restrictions on foreign exchange and repatriation; and changing political conditions, currency controls and governmental regulations that favor or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of or purchase supplies from a particular jurisdiction.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Changes, if any, in mining or investment policies or shifts in political attitude in these countries could adversely affect the Company&#146;s operations or profitability. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Failure to comply strictly with applicable laws, regulations and local practices relating to mineral right applications and tenure, could result in loss, reduction or expropriation of entitlements.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The occurrence of these various factors and uncertainties cannot be accurately predicted and could have an adverse effect on the Company&#146;s operations or profitability.
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Environmental</I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">All phases of the Company&#146;s operations are subject to environmental regulation in the various jurisdictions in which it operates. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set forth limitations on the generation, transportation, storage and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company&#146;s operations.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Government approvals and permits are currently, and may in the future be, required in connection with the Company&#146;s operations. To the extent that such approvals are required and not obtained, the Company could be curtailed or prohibited from continuing its mining operations or from proceeding with planned exploration or development of mineral properties.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">19</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Asset Backed Commercial Paper </I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">As at September 30, 2008, the non-bank ABCP market remained the subject of a restructuring process with the express intention of replacing the ABCP with a number of long-term floating rate notes. &nbsp;The restructuring plan would, if completed as currently intended, see the pooling of all of the underlying assets from all the ABCP trusts with the exception of those assets designated as ineligible for pooling (&#147;Ineligible Assets&#148;) and those series of assets backed exclusively by traditional financial assets (&#147;Traditional Series&#148;). &nbsp;ABCP relating to the pooled assets will be replaced with four classes of notes named A1, A2, B and C in declining order of seniority. &nbsp;ABCP relating to Ineligible Assets and Traditional Series would be replaced with new tracking notes whose characteristics are designed to track the performance of the particular assets of the series to which they correspond.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">On April 25, 2008, the affected parties in the ABCP restructuring voted to approve the restructuring which has been conducted under the Companies&#146; Creditors Arrangement Act. &nbsp;This vote was subsequently sanctioned by the courts and all subsequent appeals have been extinguished. The restructuring is currently planned to be completed in the fourth quarter of 2008 at which point the notes would become free funding. &nbsp;It is possible that the current financial market crisis may further delay the restructuring plans. &nbsp;As a result, the Company, following the acquisition of NGI classifies its holdings in ABCP as long-term investments.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has estimated the fair value on ABCP at September 30, 2008 by using a probability weighted cash flow approach. &nbsp;There can be no assurance that this estimate will be realized or that it will be adequate. &nbsp;Subsequent adjustments, which could be material, may be required in future reporting periods. In light of the current financial crisis, there can also be no definitive assurance that the restructuring will be implemented. &nbsp;While management takes the view that it will be implemented, failure to implement the plan could lead to significant further impairment in the fair value of the ABCP.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Additional Financing</I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company&#146;s mining, processing, development and exploration activities may require additional external financing. Failure to obtain sufficient financing could result in the delay or indefinite postponement of exploration, development or production on any or all of our projects. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable.
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Risk Relating to Recent Acquisitions</I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company recently completed a business combination of NGI, Metallica, &nbsp;and Peak Gold. &nbsp;There can be no assurances that the benefits anticipated from these acquisitions will be realized.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Peak Gold has been identified as the acquirer for accounting purposes for the business combination. The cost of the acquisition will be allocated to the assets acquired and liabilities assumed based on the fair value at the date of acquisition. The estimation of fair value for mining interests takes into account expected future cash flows associated with the life of mine plans. This allocation is not yet complete due to inherent complexities in the valuation process and revisions that may impact earnings prospectively in the future may be required.
</font> </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000">
&nbsp;</P>
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  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">20</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Dependence on Management</I></B></P>
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&nbsp;</P>
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<font size="2">The Company relies heavily on the business and technical expertise of its management team and it is unlikely that this dependence will diminish in the near term.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Title to the Company&#146;s Mineral Properties</I></B></P>
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&nbsp;</P>
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<font size="2">The acquisition of title to mineral properties is a very detailed and time-consuming process. Title to mineral concessions may be disputed. Although the Company believes it has taken reasonable measures to ensure proper title to its properties, there is no guarantee that title to any of such properties will not be challenged or impaired. Third parties may have valid claims underlying portions of the Company&#146;s interest, including prior unregistered liens, agreements, transfers or claims, including aboriginal land claims, and title may be affected by, among other things, undetected defects. As a result, the Company may be constrained in its ability to operate its properties or unable to enforce its rights with respect to the properties. An impairment to or defect in our title to certain properties could have a material adverse effect on our business, financial condition or results of operations.</font></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Exploration and Development</I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Risks related to our recent start of production at our Cerro San Pedro mine include risks associated with the operation of a mine and risks of encountering unexpected geological formations or unanticipated variations in grade.</font></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Accounting Policies implemented effective January 1, 2008</font></I></B></P>
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&nbsp;</P>
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<font size="2">The Company has adopted three new presentation and disclosure standards that were issued by the Canadian Institute of Chartered Accountant: Handbook Section 1535, Capital Disclosures (&#147;Section 1535&#148;), Handbook Section 3862, Financial Instruments &#150; Disclosures (&#147;Section 3862&#148;) and Handbook Section 3863, Financial Instruments &#150;
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Presentation (&#147;Section 3863&#148;).</font></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Section 1535 requires the disclosures of both qualitative and quantitative information that enables users of financial statements to evaluate the entity&#146;s objective, policies and processes for managing capital. Section 1535 Specifies that disclosures of (i) an entity&#146;s objective, policies and processes for managing capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has complied with any capital requirements; and (iv) if it has not complied, the consequences of such non-compliance.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Section 3862 and 3863 replace Handbook Section 3861, Financial Instruments &#150; Disclosures and Presentation, revising and enhancing its disclosure requirements and carrying forward unchanged its presentation requirements for financial instruments. Section 3862 and 3863 place increased emphasis on disclosures about the nature and extent of risk arising from financial instruments and how the entity manages those risks.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Section 3031, Inventories, which replaces the existing Section 3030, establishes standards for the measurement and disclosure of inventories. &nbsp;The new standard provides more extensive guidance on the determination of cost, including allocation of overhead, requires impairment testing and expands the disclosure requirements. &nbsp;The adoption of Section 3031 is not expected to have a material impact on the Company&#146;s consolidated financial position and results of operations.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">21</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Accounting Policies to be implemented effective January 1, 2009</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Effective January 1, 2009, the Company will adopt Section 3064, Goodwill and Intangible Assets, which replaces Section 3062, and establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets. &nbsp;Concurrent with the introduction of this standard, the CICA withdrew EIC&nbsp;27, Revenues and Expenditures in the Pre-operating Period (&#147;EIC&nbsp;27&#148;). &nbsp;As a result of the withdrawal of EIC&nbsp;27, the Company will not be able to defer costs and revenues incurred prior to commercial production at new mine operations.</font></P>
<P style="margin:0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Critical Accounting Policies and Estimates</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
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<font size="2">The preparation of its consolidated financial statements requires the Company to use estimates and assumptions that affect the reported amounts of assets and liabilities as well as revenues and expenses.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:9pt; color:#000000" align="justify">&nbsp;</P>
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<font size="2">The Company&#146;s accounting policies are described in note 2 of the notes to its September 30, 2008 unaudited interim consolidated financial statements. The Company&#146;s accounting policies relating to work-in-progress inventory valuation, depreciation and depletion of mineral property, plant and equipment and site reclamation and closure accruals are</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">critical accounting policies that are subject to estimates and assumptions regarding reserves, recoveries, future gold prices and future &nbsp;mining activities. All estimates used are subject to periodic review and are adjusted as appropriate. Life-of-mine plans are prepared each year, so all estimates relating to mining activities, reserves, recoveries and gold prices are re-assessed annually, or more frequently as determined by management. Because of the ongoing review process, the Company has been able to update its estimates on a timely basis as developments affecting the underlying assumptions have necessitated such modifications.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Inventories</I></B></P>
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&nbsp;</P>
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<font size="2">Finished goods, work-in-progress, heap leach ore and stockpile ore are valued at the lower of average production costs or net realizable value.</font></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company records the cost of mining ore stacked in its leach pads and in process at one of its mines as work-in-progress inventory and values work-in progress inventory at lower of cost or estimated net realizable value. These costs are charged to earnings and included in cost of sales on the basis of ounces of gold recovered. The assumptions used in the valuation of work-in-process inventories include estimates of gold contained in the ore stacked on leach pads, assumptions of the amount of gold stacked that is expected to be recovered from the leach pads, the amount of gold in these mill circuits and an assumption of the gold price expected to be realized when the gold is recovered. If these estimates or assumptions prove to be inaccurate, the Company could be required to write-down the recorded value of its work-in-process inventories, which would reduce the Company&#146;s earnings and working capital.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
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  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">22</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Mineral Properties</I></B></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company records mineral property acquisition expenditures and mine development expenditures at cost. In accordance with Canadian generally accepted accounting principles, the Company capitalizes pre-production expenditures net of revenues received until the commencement of commercial production.
</font> </P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">A significant portion of the Company&#146;s mineral property, plant and equipment is depreciated and amortized on a unit-of-production basis. Under the unit-of-production method, the calculation of depreciation, depletion and amortization of mineral property, plant and equipment is based on the amount of reserves expected to be recovered from each location. If these estimates of reserve prices turn out to be inaccurate, or if the Company revises its mining plan for a location due to reductions in the price of gold or otherwise, to reduce the amount of reserves expected to be recovered, the Company could be required to write-down the recorded value of the mineral property, plant and equipment or to increase the amount of future depreciation, depletion and amortization expense, both of which would reduce the Company&#146;s earnings and net assets.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">In addition, generally accepted accounting principles require the Company to consider at the end of each accounting period whether or not there has been an impairment of capitalized mineral property, plant and equipment. For producing properties, this assessment is based on whether factors that may indicate a need for a write-down are present. If the Company determines there has been an impairment because its prior estimates of future cash flows have proven to be inaccurate, due to reductions in the price of gold, increases in the costs of production, reductions in the amount of reserves expected to be received or otherwise, or because the Company has determined that the deferred costs of non-producing properties may not be recovered based on current economics or permitting considerations, the Company would be required to write-down the recorded value of its mineral property, plant and equipment, which would reduce the Company&#146;s earnings and net assets.
</font> </P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Reclamation Obligations</I></B></P>
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&nbsp;</P>
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<font size="2">The Company has an obligation to reclaim its properties after the minerals have been mined from the site and has estimated the costs necessary to comply with exiting reclamation standards. Generally accepted accounting principles require the Company to recognize the fair value of a liability for an asset retirement obligation, such as site closure and reclamation costs, in the period in which it is incurred if a reasonable estimate of fair value can be made. The Company records the estimated present value of future cash flows associated with site closure and reclamation as a liability [when the liability is incurred and increases the carrying value of the related assets by the same amount. Subsequently, these asset retirement costs are amortized to expense over the life of the related assets using the unit-of-production method. At the end of each period the liability is increased to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying any in
itial fair value measurements (additional asset retirement costs). If these estimates of costs or recoverable mineral resources prove to be inaccurate the Company could be required to write down the recorded value of its mineral property or increase the amount of future depreciation and accretion expense, or both, all of which would reduce the Company&#146;s earnings and net assets.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">23</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
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<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Future Tax Assets and Liabilities</I></B></P>
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&nbsp;</P>
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<font size="2">The Company recognizes the future tax benefit related to future income tax assets and set up a valuation allowance against any portion of those assets that it believes will, more likely than not, fail to be realized. Assessing the recoverability of future income tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. In circumstances where the applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that the changes in these estimates could occur that materially affect the amount of future income tax liabilities recorded at the balance sheet date.
</font> </P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Stock based compensation</I></B></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">CICA Handbook section 3870 Stock-based Compensation and Other Stock-Based Payments establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services. Compensation expense is determined using the Black-Scholes Option Pricing Model based on estimated fair values of all stock-based awards at the date of grant and is expensed to operations over each award&#146;s vesting period. The Black-Scholes Option Pricing Model utilizes subjective assumptions such as expected price volatility and expected life of the option. Changes in these input assumptions can significantly affect the fair value estimate.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Financial Instruments</I></B></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company&#146;s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities. The Company does not use interest rate contracts or other derivative financial instruments to manage the risks associated with its operations, and therefore, in the normal course of business are inherently exposed to currency, interest rate and commodity price fluctuations. &nbsp;(Refer to the &#147;Liquidity and Capital Resources&#148; section of this Management&#146;s Discussion and Analysis and note 4 of the Company&#146;s unaudited interim consolidated financial statements for the three and nine months ended September 30, 2008 for further discussion).</font></P>
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&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">International Financial Reporting Standards (&#147;IFRS&#148;)</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Canadian Accounting Standards Board (AcSB) recently confirmed January 1, 2011 as the date that IFRS will replace current standards and interpretations of Canadian GAAP for publically accountable enterprises. &nbsp;The change from Canadian GAAP to IFRS will fundamentally change the way Canadian companies report their financial position and results from operations. &nbsp;It may also affect certain business functions.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Currently, the Company is in the process of developing an IFRS changeover plan. &nbsp;&nbsp;This process involves analyzing &nbsp;and assessing the impact of IFRS on accounting policies, information technology and data systems, internal controls over financial reporting, disclosure controls and procedures including investor relations and external communication plans, and financial reporting expertise, including training requirements and business activities. &nbsp;&nbsp;</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">24</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B><I>
<font size="2">Controls and Procedures</font></I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Disclosure Controls and Procedures</I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and reported on a timely basis to senior management, so that appropriate decisions can be made regarding public disclosure. As at the end of the period covered by this Management&#146;s Discussion and Analysis, management evaluated the effectiveness of the Company&#146;s disclosure controls and procedures as required by Canadian securities laws.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Based on this evaluation, management has concluded that the disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the Company&#146;s interim filings was appropriately disclosed [as such term is defined under Multilateral Instrument 52-109 &#150; Certification of Disclosure in Issuers&#146; annual and interim filings is recorded, processed, summarized and reported within the time periods specified by those laws, and that material information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Internal Controls and Procedures</I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company evaluated the design of its internal control and procedures over financial reporting as defined under</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">Multilateral Instrument 52-109 for the year ended December 31, 2007 for Amapari, Peak Mines and Corporate operations. Based on this evaluation, management has concluded that the design of these internal controls and procedures over financial reporting was effective.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">There has been no change in the Company&#146;s design of internal controls and procedures over financial reporting that has materially affected, as is reasonably likely to materially affect, the Company&#146;s internal control over financial reporting during the period covered by this Management &#145;s Discussion and Analysis.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has not yet completed its evaluation of the design of its internal controls and procedures for financial reporting as defined under Multilateral Instrument 52-109 for the three month period ended September 30, 2008 for the Cerro San Pedro mine and the New Afton project &nbsp;recently acquired. However, the Company does not anticipate any significant &nbsp;deficiencies in the design of these controls. &nbsp;</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Limitations on Controls and Procedures</I></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company&#146;s management, including its President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, believe that any &nbsp;internal controls and procedures for financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, a design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented and detected. These inherent limitations include the realities that judgments in decision-making can be faulty and breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of t
wo or more people, or by unauthorized override control. The design of any system controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify">&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">25</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="justify"><B><I>Contingencies</I></B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#FF0000" align="justify">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company is from time to time involved in various claims, legal proceedings and complaints arising in the ordinary course of business. The Company does not believe that adverse decisions in any pending or threatened proceeding related to any matter, or any amount which may be required to be paid by reason thereof, will have a material effect on the financial conditions or future results of operations of the Company.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">In 2007, the Company terminated its mining contract at the Cerro San Pedro mine. The mining contractor maintained that it was not paid for all amounts owed under the mining contract, including early contract termination fees, and has filed an arbitration claim against the Company for $16.8 million plus value added taxes. The Company has filed a counter claim against the mining contractor for $2.5 million. &nbsp;The Company had recorded an $8.4 million provision for this claim. Subsequent to the period end the Company settled the matter for $8.0 million exclusive of value added taxes and a mutual release and settlement agreement was signed by both parties.</font></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
<font size="2">The Company has received a notice that legal claims in the amount of approximately $46.0 million have been filed in Brazilian courts against the Company&#146;s subsidiary, Mineracao Pedra Branca do Amapari Ltda (&#147;MPBA&#148;). The claims allege that MPBA has adversely impacted the quality of William Creek causing economic loss and health concerns. The Company believes that these claims are unfounded and intends to vigorously defend against them. The Company cannot reasonably predict the likelihood or outcome of these actions.
</font> </P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">26</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify"><B>
<font size="2">CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</font></B></P>
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align="justify">
&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify"><I>
<font size="2">This Management&#146;s Discussion and Analysis contains &#147;forward- looking statements&#148;, within the meaning of the United States Private Securities Litigation and Reform Act of 1955 and &nbsp;applicable Canadian Securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future prices of gold, silver and &nbsp;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 forwa
rd-looking terminology such as &#147;plans&#148;, &#147;expects&#148;, or &#147;does not expect&#148;, &#147;is expected&#148;, &#147;budget&#148;, &#147;scheduled&#148;, &#147;estimates&#148;, &#147;forecasts&#148; ,&#148;intends&#148; ,&#148; anticipates&#148;, or &#147;does not anticipate&#148;, or &#147;believes&#148;, or variations of such words and phrases or state that certain actions, events or results &#147;may&#148;, &#147;could&#148;, &#147;would&#148;, &#147;might&#148; or &#147;will&#148; or &#147;will be taken&#148;, &#147;occur&#148; or &#147;be achieved&#148;. 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 &nbsp;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 NGI, Peak Gold 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, Australia, Mexico and Chile; 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 Comp
any 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. In addition, there are risks and hazards associated with the business of mineral exploration, development, and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and risk of inadequate insurance or inability to obtain insurance, to cover these risks) as well as the &#147;Risks and Uncertainties&#148; included in this document and the section entitled &#147;Risk Factors&#148; in the Joint D
isclosure Booklet of the Company, Peak Gold and Metallica and the section entitled &#147;Risk Factors Relating to the Operations of the Combined Company&#148; in the Company&#146;s management information circular dated May 16, 2008, both available &nbsp;on SEDAR at www.sedar.com &nbsp;&nbsp;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.
</font> </I></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; color:#000000" align="justify">&nbsp;</P>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td><font FACE="Times New Roman" SIZE="2" color="#808080"><b>New Gold Inc.
    Management Discussion and Analysis</b></font></td>
    <td>
    <p align="right"><b><font face="Times New Roman" size="2" color="#808080">27</font></b></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<hr color="#000000" size="5">
<P style="margin:0pt; padding-left:-14.4pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000">&nbsp;</P>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>exh993.htm
<DESCRIPTION>EXHIBIT 99.3
<TEXT>
<html>

<head>
<title>New Gold Inc: Exhibit 99.3 - 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 size="2"><b>
<p align="center">Form 52-109F2 - Certification of Interim Filings</b> </p>
<p>I <b><i>Robert Gallagher, President and Chief Executive Officer of New Gold
Inc.,</i> </b>certify that: </p>
<p>1. </p>
<p style="text-indent: 5%; margin-top: -25.5pt" align="justify">I have reviewed
the interim filings (as this term is defined in Multilateral Instrument 52-109
<i>Certification of Disclosure in Issuers&#146; Annual and Interim Filings</i>) of <i>
<b>New Gold Inc.</b></i>, (the issuer) for the interim period ending <b><i>
September 30, 2008;</i> </b></p>
<p ALIGN="JUSTIFY">2. </p>
<p style="text-indent: 5%; margin-top: -25.5pt" align="justify">Based on my
knowledge, the interim filings do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated or that is necessary
to make a statement not misleading in light of the circumstances under which it
was made, with respect to the period covered by the interim filings; </p>
<p>3. </p>
<p style="text-indent: 5%; margin-top: -25.5pt" align="justify">Based on my
knowledge, the interim financial statements together with the other financial
information included in the interim filings fairly present in all material
respects the financial condition, results of operations and cash flows of the
issuer, as of the date and for the periods presented in the interim filings; </p>
<p>4. </p>
<p style="text-indent: 5%; margin-top: -25.5pt" align="justify">The issuer's
other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures and internal control over financial reporting
for the issuer, and we have: </p>
<p>(a) </p>
<p style="text-indent: 5%; margin-top: -25.5pt" align="justify">designed such
disclosure controls and procedures, or caused them to be designed under our
supervision, to provide reasonable assurance that material information relating
to the issuer, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which the
interim filings are being prepared; and </p>
<p>(b) </p>
<p style="text-indent: 5%; margin-top: -25.5pt" align="justify">designed such
internal control over financial reporting, or caused it to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with the issuer&#146;s GAAP; and </p>
<p>5. </p>
<p style="text-indent: 5%; margin-top: -25.5pt" align="justify">I have caused
the issuer to disclose in the interim MD&amp;A any change in the issuer&#146;s internal
control over financial reporting that occurred during the issuer&#146;s most recent
interim period that has materially affected, or is reasonably likely to
materially affect, the issuer&#146;s internal control over financial reporting. </p>
<p>November 12<sup>th</sup>, 2008 </p>
<i><b>
<p><u>&quot;Robert Gallagher&quot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>
</b></i>
Robert Gallagher <br>
<i>
President and Chief Executive Officer </p>
</i></font><hr color="#000000" size="5">

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>5
<FILENAME>exh994.htm
<DESCRIPTION>EXHIBIT 99.4
<TEXT>
<html>

<head>
<title>New Gold Inc: Exhibit 99.4 - 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 size="2"><b>
<p align="center">Form 52-109F2 - Certification of Interim Filings</b> </p>
<p>I <i><b>Basil Huxham, Executive Vice President and Chief Financial Officer of
New Gold Inc.,</b></i> certify that: </p>
<p>1. </p>
<p align="justify" style="text-indent: 5%; margin-top: -25.5pt">I have reviewed
the interim filings (as this term is defined in Multilateral Instrument 52-109
<i>Certification of Disclosure in Issuers&#146; Annual and Interim Filings</i>) of <i>
<b>New Gold Inc.</b></i>, (the issuer) for the interim period ending <b><i>
September 30, 2008;</i> </b></p>
<p ALIGN="JUSTIFY">2. </p>
<p ALIGN="JUSTIFY" style="text-indent: 5%; margin-top: -25.5pt">Based on my
knowledge, the interim filings do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated or that is necessary
to make a statement not misleading in light of the circumstances under which it
was made, with respect to the period covered by the interim filings; </p>
<p>3. </p>
<p align="justify" style="text-indent: 5%; margin-top: -25.5pt">Based on my
knowledge, the interim financial statements together with the other financial
information included in the interim filings fairly present in all material
respects the financial condition, results of operations and cash flows of the
issuer, as of the date and for the periods presented in the interim filings; </p>
<p>4. </p>
<p align="justify" style="text-indent: 5%; margin-top: -25.5pt">The issuer's
other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures and internal control over financial reporting
for the issuer, and we have: </p>
<p>(a) </p>
<p align="justify" style="text-indent: 5%; margin-top: -25.5pt">designed such
disclosure controls and procedures, or caused them to be designed under our
supervision, to provide reasonable assurance that material information relating
to the issuer, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which the
interim filings are being prepared; and </p>
<p>(b) </p>
<p align="justify" style="text-indent: 5%; margin-top: -25.5pt">designed such
internal control over financial reporting, or caused it to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with the issuer&#146;s GAAP; and </p>
<p>5. </p>
<p align="justify" style="text-indent: 5%; margin-top: -25.5pt">I have caused
the issuer to disclose in the interim MD&amp;A any change in the issuer&#146;s internal
control over financial reporting that occurred during the issuer&#146;s most recent
interim period that has materially affected, or is reasonably likely to
materially affect, the issuer&#146;s internal control over financial reporting. </p>
<p>November 12<sup>th</sup>, 2008 </p>
<i><b>
<p><u>&quot;Basil Huxham&quot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>
</b></i>
Basil Huxham <br>
<i>
Executive Vice President and Chief Financial Officer </p>
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