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<SEC-DOCUMENT>0001204459-09-001383.txt : 20090807
<SEC-HEADER>0001204459-09-001383.hdr.sgml : 20090807
<ACCEPTANCE-DATETIME>20090807141437
ACCESSION NUMBER:		0001204459-09-001383
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20090630
FILED AS OF DATE:		20090807
DATE AS OF CHANGE:		20090807

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			New Gold Inc. /FI
		CENTRAL INDEX KEY:			0000800166
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL MINING [1000]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A1
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31722
		FILM NUMBER:		09994856

	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>newgoldf6k.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="3">
</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 UNDER 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">
<font size="2">For the month of<b> August, 2009</b></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">Commission File Number <b>001-31722</b></font></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 office</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="2">&#163;</font><font size="2">&nbsp;</font>&nbsp;&nbsp;&nbsp;&nbsp;<font size="2">Form
40-F</font> <font face="Wingdings" size="2">x</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="2">&#163;</font></p>
<font face="Times New Roman" size="2"><b>
<p>Note</b>: Regulation S-T Rule 101(b)(1) only permits the submission in paper
of a Form 6-K if submitted solely to provide an attached annual report to
security holders. </p>
</font>
<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="2">&#163;</font></p>
<font face="Times New Roman" size="2"><b>
<p align="justify">Note: </b>Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report or other
document that the registrant foreign private issuer must furnish and make public
under the laws of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrant's &quot;home country&quot;), or under the
rules of the home country exchange on which the registrant's securities are
traded, as long as the report or other document is not a press release, is not
required to be and has not been distributed to the registrant's security
holders, and, if discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on EDGAR. </p>
</font>
<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.)&nbsp; Yes</font> <font face="Wingdings 2" size="2">&#163;</font><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No</font>
<font face="Wingdings" size="2">x</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;&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>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<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"><font color="#000000">See
the Exhibit Index hereto</font>.</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-indent: 4%; 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-indent: 4%; text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
&nbsp;</p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</p>
<table style="font-size: 10pt; border-collapse: collapse" borderColor="#111111" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <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%"><b><small><font size="2">NEW</font></small> <small>
    <font size="2">GOLD</font></small> <small><font size="2">INC.</font></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/ Susan
    Toews</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">Susan Toews</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">Corporate
    Secretary</font></td>
  </tr>
  <tr>
    <td width="50%" colSpan="2"><font size="2">Date: August 6, 2009</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>
<hr style="page-break-after: always" align="center" width="100%" color="black" noShade SIZE="5">
<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 CELLSPACING="0" BORDER="0" WIDTH="100%" DIR="ltr" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="9%"><font FACE="Times New Roman" size="2"><b><u>Exhibit</u></b></font></td>
    <td WIDTH="91%"><font FACE="Times New Roman" size="2"><b><u>Description</u></b></font></td>
  </tr>
  <tr>
    <td WIDTH="9%">&nbsp;</td>
    <td WIDTH="91%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="9%" bgcolor="#E6EFFF"><font FACE="Times New Roman" size="2">
    <a href="exh991.htm" style="text-decoration: none">99.1</a></font></td>
    <td WIDTH="91%" bgcolor="#E6EFFF"><font FACE="Times New Roman" size="2">
    <a href="exh991.htm" style="text-decoration: none">Interim consolidated
    financial statements of New Gold Inc. June 30, 2009 (unaudited)</a></font></td>
  </tr>
  <tr>
    <td WIDTH="9%"><font FACE="Times New Roman" size="2">
    <a href="exh992.htm" style="text-decoration: none">99.2</a></font></td>
    <td WIDTH="91%"><font FACE="Times New Roman" size="2">
    <a href="exh992.htm" style="text-decoration: none">New Gold Inc.
    Management's Discussion and Analysis Six Months Ended June 30, 2009</a></font></td>
  </tr>
  <tr>
    <td WIDTH="9%" bgcolor="#E6EFFF"><font FACE="Times New Roman" size="2">
    <a href="exh993.htm" style="text-decoration: none">99.3</a></font></td>
    <td WIDTH="91%" bgcolor="#E6EFFF"><font FACE="Times New Roman" size="2">
    <a href="exh993.htm" style="text-decoration: none">Form 52-109F2 CEO
    Certification Of Interim Filings Full Certificate</a></font></td>
  </tr>
  <tr>
    <td WIDTH="9%"><font FACE="Times New Roman" size="2">
    <a href="exh994.htm" style="text-decoration: none">99.4</a></font></td>
    <td WIDTH="91%"><font FACE="Times New Roman" size="2">
    <a href="exh994.htm" style="text-decoration: none">Form 52-109F2 CFO
    Certification Of Interim Filings Full Certificate</a></font></td>
  </tr>
  <tr>
    <td WIDTH="9%" bgcolor="#E6EFFF"><font FACE="Times New Roman" size="2">
    <a href="exh995.htm" style="text-decoration: none">99.5</a></font></td>
    <td WIDTH="91%" bgcolor="#E6EFFF"><font FACE="Times New Roman" size="2">
    <a href="exh995.htm" style="text-decoration: none">Press Release of August
    6, 2009</a></font></td>
  </tr>
</table>
<p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</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">&nbsp;</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">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>

<BODY style="font-size:10pt;">

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">

<HR noshade align="center" width=100% size=3 color="black">


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<!--$$/page=-->
<A name="page_1"></A>

<P align="right">
<b>Exhibit 99.1</b></P>

<P align="justify">
<FONT size=2>Interim consolidated financial statements of</FONT></P>
<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B></P>
<P align="justify">
<FONT size=2>June 30, 2009</FONT><BR>
<FONT size=2>(Unaudited) </FONT><BR>
</P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<!--$$/page=--><A name=page_2></A>
<P align=justify><B><FONT size=5>New Gold Inc.<br>
</FONT></B><FONT size=4>June 30, 2009 </FONT></P>
<P align=justify><FONT size=4>Table of contents </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Consolidated statements of
      operations and comprehensive income</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>1</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Consolidated balance sheets</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>2</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Consolidated statements of
      shareholders&#146; equity</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>3</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Consolidated statements of cash flows</FONT>
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>4</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Notes to the consolidated
      financial statements</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>5-27</FONT> </TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_3></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=2><br>
</FONT><FONT size=4>Consolidated statements of operations and
comprehensive income <br>
Three and six month periods ended June 30,</FONT><FONT size=2><br>
(Expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4 valign="bottom"><FONT
      size=2>Three months ended </FONT></TD>
    <TD align=center width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4 valign="bottom"><FONT
      size=2>Six months ended </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="23%"
    colSpan=4 valign="bottom"><FONT size=2>June 30, </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="23%"
    colSpan=4 valign="bottom"><FONT size=2>June 30, </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%" valign="bottom"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%" valign="bottom"><FONT size=2><B>2009 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%" valign="bottom"><FONT size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%" valign="bottom"><FONT size=2><B>2009 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%" valign="bottom"><FONT size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%" valign="bottom"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="10%" valign="bottom"><FONT size=2><B>$&nbsp;</B></FONT></TD>
    <TD align=center width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="10%" valign="bottom"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=center width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="10%" valign="bottom"><FONT size=2><B>$&nbsp;</B></FONT></TD>
    <TD align=center width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=center width="10%" valign="bottom"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Revenues </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2><B>61,687
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>39,497 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2><B>120,452
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>95,718 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Operating expenses </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(38,133</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(33,265</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(73,333</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(64,632</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Depreciation and depletion </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>(10,654</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>(7,657</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>(21,403</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>(14,061</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Earnings (loss) from mine operations </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>12,900
      </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT
    size=2>(1,425</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>25,716
      </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>17,025
    </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Corporation administration (i) </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(5,727</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(3,196</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(9,793</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(7,223</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Business combination
      transaction costs </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>(5,899</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>(6,583</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Exploration </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(2,431</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(1,274</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(4,445</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(2,218</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Goodwill impairment charge (Note 4 (a))
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT
      size=2><B>(189,634</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT
      size=2><B>(189,634</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom" style="border-top-style: solid; border-top-width: 1">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD width="10%" valign="bottom" style="border-top-style: solid; border-top-width: 1"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD width="1%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD width="10%" valign="bottom" style="border-top-style: solid; border-top-width: 1"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD width="1%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD width="10%" valign="bottom" style="border-top-style: solid; border-top-width: 1"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD width="1%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD width="10%" valign="bottom" style="border-top-style: solid; border-top-width: 1"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" style="border-top-style: solid; border-top-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>(Loss) earnings from
      operations </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>(190,791</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>(5,895</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>(184,739</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>7,584 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Other income (expense) </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>Realized and unrealized gain
      on gold contracts (Note 10 (a)) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>8,161 </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>8,161 </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>Realized and unrealized gain on fuel contracts (Note 10 (b)) </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>797
      </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>797
      </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>Realized and unrealized gain
      on investments (Note 7) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>9,699 </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>9,699 </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Interest and other income </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>1,810 </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>1,355 </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>2,076 </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>3,322 </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>Gain on redemption of
      long-term debt </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>- </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>14,236 </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Interest and finance fees </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(991</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(467</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(1,000</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(546</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Loss on foreign exchange </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>(31,094</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>(91</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>(33,069</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>(1,174</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD></TR>
  <TR>
    <TD valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>(Loss) earnings before taxes
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>(202,409</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>(5,098</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT
      size=2><B>(183,839</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>9,186 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>Income and mining taxes </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" valign="bottom"><FONT
      size=2><B>(437</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%" valign="bottom"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" valign="bottom"><FONT
      size=2>347 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" valign="bottom"><FONT
      size=2><B>(6,928</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%" valign="bottom"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%" valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" valign="bottom"><FONT
      size=2>(4,147</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%" valign="bottom"
    >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2><B>Net (loss) earnings and comprehensive income
      </B></FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2"><FONT
      size=2><B>(202,846</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2"><FONT
      size=2>(4,751</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2"><FONT
      size=2><B>(190,767</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2"><FONT
      size=2>5,039 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom" style="border-bottom-style: solid; border-bottom-width: 2">&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>(Loss) earnings per share
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Basic </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(0.79</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>(0.05</FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>(0.81</B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >) </TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>0.07 </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Diluted </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>(0.79</B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>(0.05</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>(0.81</B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>0.06 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Weighted average number of shares outstanding (in thousands)
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Basic </FONT></TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>258,345 </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>87,432 </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2><B>235,747 </B></FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD>
    <TD align=left width="1%" valign="bottom" >&nbsp;</TD>
    <TD align=right width="10%" valign="bottom"><FONT size=2>72,633 </FONT></TD>
    <TD align=left width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Diluted </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>258,345 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>87,432 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2><B>235,747 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff valign="bottom"><FONT size=2>81,970 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="10%" valign="bottom"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>(i) Stock option expense (a non-cash item included in corporation administration)
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2><B>(1,605</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>(617</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2><B>(2,937</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff valign="bottom"><FONT size=2>(3,178</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff valign="bottom">)
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>See accompanying notes to the unaudited
      consolidated financial statements. </FONT></TD>
    <TD align=right width="15%"><FONT size=2>Page 1
</FONT></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_4></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=2><br>
</FONT><FONT size=4>Consolidated balance sheets</FONT><FONT size=2><br>
(Expressed in thousands of U.S.
dollars) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>June 30, </B></FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>December 31, </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2><B>2009 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>$&nbsp;</B></FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2><B>Assets </B></FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Current assets </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Cash and cash equivalents </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>141,088
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>185,668
</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Restricted cash (Note 5) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>7,500 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Short-term investments
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>5,996
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Accounts receivable </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>11,724 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>11,232 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Inventories and stockpiled ore (Note 6) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>87,851
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>39,402 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>Current portion of mark-to-market gain on fuel contracts (Note 10 (b))
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2></FONT><FONT size=2><B>443
      </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2></FONT><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Future income and mining taxes </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>2,681
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>2,690 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT
      size=2>Prepaid expenses and other </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2><B>3,852 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>3,945 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>261,135
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>242,937
</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Investments (Note 7)
</FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>76,574
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>77,016 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Mining interests (Note 8) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>1,989,242 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>1,618,761 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Intangible royalty asset
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>13,982
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>14,087 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Reclamation deposits and other </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>15,808 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>4,900 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Mark-to-market gain on fuel contracts (Note
      10 (b)) </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2><B>334 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2><B>2,357,075 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2>1,957,701 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2><B>Liabilities </B></FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Current liabilities </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Accounts payable and accrued liabilities
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>43,660 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>41,382 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Short-term borrowings
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>-
    </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>7,193 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>
    Current portion of long-term debt (Note 9) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>21,223 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT size=2>Current portion of
      mark-to-market loss on gold contracts (Note 10 (a)) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2><B>8,302 </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <p style="text-indent: -20; margin-left: 30; margin-right: 10"><FONT
      size=2>Income and mining taxes payable </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2><B>8,448 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>5,126 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>81,633
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>53,701 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Reclamation and closure cost
      obligations </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>31,198
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>21,949 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Mark-to-market loss on gold contracts (Note 10
      (a)) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>46,213 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Future income and mining taxes
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>314,352
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>224,068
</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Long-term debt (Note 9) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>229,210 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>212,387 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Employee benefits and other </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2><B>4,536 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>3,808 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2><B>707,142 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>515,913 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2><B>Shareholders' equity </B></FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Common shares </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>1,697,131
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>1,321,110
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Contributed surplus </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>77,610 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>65,409 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Share purchase warrants
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2><B>157,464
      </B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>145,614
</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Equity component of convertible debentures
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2><B>21,604 </B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>21,604 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>Accumulated other
      comprehensive loss </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>&nbsp; &nbsp;
      &nbsp; &nbsp;<B>(1,566</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>(406</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>Deficit </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2><B>(302,310</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>(111,543</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2><B>(303,876</B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>(111,949</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2><B>1,649,933 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2>1,441,788 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2><B>2,357,075 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>1,957,701 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify><FONT size=1><FONT size=2>Commitments and contingencies (Note
14)</FONT></FONT></P>
<P align=justify><FONT size=1><FONT size=2>Approved by the
Board</FONT></FONT></P>
<P align=justify><u><B><I><FONT size=2>(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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I></B>
</u><FONT size=2><br>
Robert Gallagher,
Director</FONT></P>
<P align=justify><u><B><I><FONT size=2>(Signed) Paul
Sweeney&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; </FONT></I></B>
</u><FONT size=2><br>
Paul Sweeney,
Director</FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>See accompanying notes to the unaudited
      consolidated financial statements. </FONT></TD>
    <TD align=right width="15%"><FONT size=2>Page 2
</FONT></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_5></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=2><br>
</FONT><FONT size=4>Consolidated statements of shareholders' equity <br>
Six month period ended June 30,
2009<br>
</FONT><FONT size=2>(Expressed<FONT size=2> in
</FONT>thousands<FONT size=2> of U.S. dollars, except share amounts) <br>
</FONT>(Unaudited)</FONT><FONT size=1> </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">Equity </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">Accumulated </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">Share </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >component
      of&nbsp;&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">other </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">Total </TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right colspan="4" valign="bottom">
    <p align="center">&nbsp; Common shares</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">Special </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">Contributed </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">purchase </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">convertible </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">comprehensive </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">shareholders' </TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">Shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">Amount </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">warrants </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">surplus </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">warrants </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">debentures </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">(Deficit) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">equity </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">$&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><B>Balance,
      December 31, 2007 </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">72,629,140 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">339,796 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">104,166 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">6,166 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">57,673 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">(1,566</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom">(8,864</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff valign="bottom"><B>497,371 </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Exercise of special warrants </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right width="7%" valign="bottom">14,772,333 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">80,448 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">(104,166</TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">23,718 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><B>- </B></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Exercise of
      options </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">424,090 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">3,022 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">(1,664</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><B>1,358 </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Exercise of warrants </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">561,645 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">3,167 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">(1,533</TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><B>1,634 </B></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Acquisition of
      Metallica (Note 4 (b)(i)) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">87,447,821 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">605,139 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">7,294 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">46,674 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><B>659,107 </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Acquisition of NGI (Note 4
      (b)(ii)) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">37,005,717 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">289,538 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">8,241 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">57,415 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">21,604 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><B>376,798 </B></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Expiry of
      warrants </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">38,333 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">(38,333</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><B>- </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Stock-based compensation </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">7,039 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><B>7,039 </B></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Other
      comprehensive income </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">1,160 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><B>1,160 </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom">(102,679</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right valign="bottom"><B>(102,679</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left valign="bottom"
    >) </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Balance, December
      31, 2008 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">212,840,746 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">1,321,110 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">65,409 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">145,614 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">21,604 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">(406</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">(111,543</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><B>1,441,788 </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Shares issued </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">20,000 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">46 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><B>46 </B></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Acquisition of
      Western Goldfields, net of share issue costs
      (Note 4 (a)) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">142,796,287 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">375,367 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">9,749 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">11,850 </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><B>396,966 </B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Exercise of options </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">90,000 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">608 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">(485</TD>
    <TD align=left valign="bottom" >) </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><B>123 </B></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Other
      comprehensive income </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">(1,160</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom">- </TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=left  bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD align=right bgColor=#e6efff valign="bottom"><B>(1,160</B></TD>
    <TD align=left  bgColor=#e6efff valign="bottom">) </TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Stock-based compensation </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">2,937 </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom">- </TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=left valign="bottom" >&nbsp;</TD>
    <TD align=right valign="bottom"><B>2,937 </B></TD>
    <TD align=left valign="bottom" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10">Net loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom">(190,767</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff valign="bottom"><B>(190,767</B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff valign="bottom">) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom">
    <p style="text-indent: -20; margin-left: 20; margin-right: 10"><B>Balance, June 30, 2009 </B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">355,747,033 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">1,697,131 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">- </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">77,610 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">157,464 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">21,604 </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">(1,566</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom">(302,310</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right valign="bottom"><B>1,649,933 </B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left valign="bottom"
    >&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=1><FONT size=2>See accompanying notes to the
      unaudited consolidated financial statements. </FONT></FONT></TD>
    <TD align=left width="15%">
    <p align="right"><FONT size=1><FONT size=2>Page 3
    </FONT></FONT></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_6></A>
<P align=justify><B><FONT size=5>New Gold Inc. </FONT></B><FONT size=2><br>
</FONT><FONT size=4>Consolidated statements of cash flows <br>
Three and
six month periods ended June 30,<br>
</FONT><FONT size=2>(Expressed in thousands of U.S.
dollars) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4><FONT size=1><FONT size=2>Three
      months ended </FONT></FONT></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4><FONT size=2></FONT><FONT
      size=1><FONT size=2>Six months ended </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="23%"
    colSpan=4><FONT size=2></FONT><FONT size=1><FONT size=2>June 30,
      </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="23%"
    colSpan=4><FONT size=2></FONT><FONT size=1><FONT size=2>June 30,
      </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B><FONT size=1><FONT size=2>2009 </FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><FONT size=1><FONT size=2>2008 </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><B><FONT size=1><FONT size=2>2009 </FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      width="10%"><FONT size=1><FONT size=2>2008 </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" ><B><FONT size=1><FONT
      size=2></FONT></FONT></B></TD>
    <TD align=center width="10%"><B><FONT size=1><FONT
      size=2>$&nbsp;</FONT></FONT></B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" ><FONT size=1><FONT
      size=2></FONT></FONT></TD>
    <TD align=center width="10%"><FONT size=1><FONT
      size=2>$&nbsp;</FONT></FONT></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" ><B><FONT size=1><FONT
      size=2></FONT></FONT></B></TD>
    <TD align=center width="10%"><B><FONT size=1><FONT
      size=2>$&nbsp;</FONT></FONT></B></TD>
    <TD align=center width="2%" >&nbsp;</TD>
    <TD align=center width="1%" ><FONT size=1><FONT
      size=2></FONT></FONT></TD>
    <TD align=center width="10%"><FONT size=1><FONT
      size=2>$&nbsp;</FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><FONT size=1><FONT size=2>Operating activities
      </FONT></FONT></B></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp;Net (loss) earnings
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>(202,846</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>(4,751</FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>(190,767</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>5,039 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;Items not involving cash </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill impairment charge
      </FONT><FONT size=1><FONT size=2>(Note 4 (a)) </FONT></FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>189,634 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>189,634 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized and realized gain on gold
      </FONT><FONT size=1><FONT size=2>contracts </FONT></FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><B><FONT size=1><FONT
      size=2>(8,161</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><FONT size=1><FONT
      size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><B><FONT size=1><FONT
      size=2>(8,161</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><FONT size=1><FONT
      size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized gain on fuel contracts
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>(783</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT size=2>-
      </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>(783</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT size=2>-
      </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized
      foreign exchange loss </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT size=2>30,101
      </FONT></FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT
size=2>(652</FONT></FONT></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT size=2>32,849
      </FONT></FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>355
</FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and depletion </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>11,026 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>7,657 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>21,775 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>14,061 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock option
      expense </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT size=2>1,605
      </FONT></FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>617
</FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT size=2>2,937
      </FONT></FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>3,178
    </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future income and mining taxes
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>463 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>1,981 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>3,250 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>3,401 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on redemption of long-term
    </FONT><FONT
      size=2>debt </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><B><FONT size=1><FONT
      size=2>- </FONT></FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><FONT size=1><FONT
      size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><B><FONT size=1><FONT
      size=2>(14,236</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2></FONT><FONT size=1><FONT
      size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>1,760 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT size=2>175
      </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>1,824 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT size=2>263
      </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on
      investments </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(9,328</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(9,328</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>Change in non-cash working
      capital </FONT><FONT size=2>(Note 12) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>3,064 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><FONT
      size=1><FONT size=2>(8,014</FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>(4,738</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">) </TD>
    <TD align=left width="1%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><FONT
      size=1><FONT size=2>(10,890</FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-bottom-style: solid; border-bottom-width: 1">) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right
      width="10%"><B><FONT size=1><FONT size=2>16,535 </FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="10%"><FONT
      size=1><FONT size=2>(2,987</FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right
      width="10%"><B><FONT size=1><FONT size=2>24,256 </FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="10%"><FONT
      size=1><FONT size=2>15,407 </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B><FONT size=1><FONT size=2>Investing activities
      </FONT></FONT></B></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mining interests
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>(33,642</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>(9,695</FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>(60,559</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>(16,817</FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of short-term investment
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(5,996</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(5,996</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash acquired in business
      combination
      </FONT><FONT size=2>and asset acquisition (Note 4 (a))
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>20,735 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=1><FONT size=2>134,195 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>20,735 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=1><FONT size=2>134,195 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reclamation deposits
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(381</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(593</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receipt of accrued interest on
      </FONT><FONT size=2>investments </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>- </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><B><FONT
      size=1><FONT size=2>4,716 </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-bottom-style: solid; border-bottom-width: 1"><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from settlement of
      </FONT><FONT
      size=2>investments </FONT></TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><B><FONT size=1><FONT
      size=2>7,289 </FONT></FONT></B></TD>
    <TD align=left width="2%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><FONT size=1><FONT
      size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><B><FONT size=1><FONT
      size=2>7,289 </FONT></FONT></B></TD>
    <TD align=left width="2%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2></FONT><FONT size=1><FONT
      size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left
      bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="10%"
    bgColor=#e6efff><B><FONT size=1><FONT size=2>(11,995</FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="10%"
    bgColor=#e6efff><FONT size=1><FONT size=2>124,500 </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="10%"
    bgColor=#e6efff><B><FONT size=1><FONT size=2>(34,408</FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="10%"
    bgColor=#e6efff><FONT size=1><FONT size=2>117,378 </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B><FONT size=1><FONT size=2>Financing
      activities </FONT></FONT></B></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common shares issued
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT size=2>110
      </FONT></FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>30 </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT size=2>156
      </FONT></FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>30 </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from short-term borrowing
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT size=2>-
      </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT size=2>-
      </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT size=2>-
      </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT
      size=2>4,000 </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of short-term borrowings
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(4,749</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=1><FONT
      size=2>(11,749</FONT></FONT></B></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=1><FONT size=2>- </FONT></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of long-term debt
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT size=2>-
      </FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT size=2>-
      </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=1><FONT
      size=2>(25,575</FONT></FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=1><FONT size=2>-
      </FONT></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from marketable securities
      </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=1><FONT size=2>- </FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=1><FONT size=2>- </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=1><FONT size=2>- </FONT></FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=1><FONT size=2>32,440 </FONT></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><B><FONT size=2>(4,639</FONT></B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>30 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><B><FONT size=2>(37,168</FONT></B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>36,470 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of
      exchange rate changes on cash and cash
      equivalents
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=2>4,577 </FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=2>2,740 </FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Increase
      (decrease) in cash and cash equivalents </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=2>4,478 </FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>121,543 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=2>(44,580</FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>169,255 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Cash and cash equivalents,
      beginning of period </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT
      size=2>136,610 </FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2>197,636 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT
      size=2>185,668 </FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2>149,924 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B><FONT size=2>Cash and cash
      equivalents, end of </FONT></B><FONT size=2><B>period
</B></FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=2>141,088 </FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>319,179 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT size=2>141,088 </FONT></B></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>319,179 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Cash and cash
      equivalents are comprised of </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=2>74,232
      </FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>52,688
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=2>74,232
      </FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>52,688
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term money market instruments
      </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><B><FONT size=2>66,856 </FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><FONT size=2>266,491 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><B><FONT size=2>66,856 </FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><FONT size=2>266,491 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="10%"><B><FONT size=2>141,088 </FONT></B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT size=2>319,179 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="10%"><B><FONT size=2>141,088 </FONT></B></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT size=2>319,179 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;Supplemental cash flow information (Note
      12) </FONT></TD>
    <TD align=left width="15%"><FONT size=2>&nbsp; </FONT></TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=1><FONT size=2>See accompanying notes to the
      unaudited consolidated financial statements. </FONT></FONT></TD>
    <TD align=left width="15%">
    <p align="right"><FONT size=2>Page 4
    </FONT></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>


<!--$$/page=-->
<A name="page_7"></A>

<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><BR>
<FONT size=4>Notes to the consolidated financial statements June 30, 2009<br>
</FONT>
<FONT size=2>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>1.</FONT></B> 	</TD>
	<TD>
<P align="justify"><B><FONT size=2>Description of business and nature of operations</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD>
<P align="justify"><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 assets are comprised of the Amapari mine in
Brazil, the Cerro San Pedro mine in Mexico, the Peak mine in Australia, and the Mesquite mine in the United States (&#147;U.S.&#148;). Significant development projects include the New Afton copper-gold project in Canada and a 30% interest in a
copper- gold project in Chile.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>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 4 (b)). In accordance with the provisions of the Canadian Institute of Chartered Accountants (&#147;CICA&#148;) Handbook Section 1581, </FONT><I><FONT size=2>Business
Combinations</FONT></I><FONT size=2>, 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. Comparative information for the three and six months ended June 30, 2008 include only the operations of Amapari and Peak Mines.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>In the second quarter of 2009, the Company completed a business combination (&#147;Business Combination&#148; see Note 4 (a)) with Western Goldfields Inc. (&#147;Western Goldfields&#148;). The Business Combination was
completed by way of plan of arrangement that was approved by the New Gold and Western Goldfields shareholders on May 13 and May 14, 2009, respectively and which received final court approval on May 27, 2009. May 27, 2009 was determined to be the
date of acquisition and interim consolidated financial statements include the results of Western Goldfields from May 27, 2009 to June 30, 2009.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
	<TD width=5% valign=top>
<B><FONT size=2>2.</FONT></B> 	</TD>
	<TD>
<P align="justify"><B><FONT size=2>Summary of significant accounting policies</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>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 year ended December 31, 2008, as they do not contain all disclosures required by Canadian GAAP for annual financial statements.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD>
<P align="justify"><I><FONT size=2>Basis of presentation and principles of consolidation</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>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 June 30, 2009 and results of operations and comprehensive income (loss), shareholders&#146; equity and cash flows for all periods presented, have been made.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 5</FONT></P>

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<!--$$/page=--><A name=page_8></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<P align=justify><B><FONT size=2>2. </FONT></B></P>
<P align=justify style="margin-left: 5%; margin-top: -25.5pt"><B><FONT size=2>
Summary of significant accounting policies (continued)</FONT></B></P>
<P align=justify style="margin-left: 5%"><I><FONT size=2>Basis of presentation and principles of
consolidation (continued) </FONT></I></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The principal subsidiaries of the Company as of
June 30, 2009 are as follows:</FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Subsidiary</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>Interest</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Metallica Resources
      Inc.</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Metallica Resources Alaska Inc.</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Minera Metallica Resources
      Chile Limitada</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Minera San Xavier, S.A. de C.V.</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Minera&#231;&#227;o Pedra Branca do
      Amapari Ltda (&#147;Amapari&#148;)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Peak Gold Mines Pty</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Inversiones El Morro
      Limitada</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Western Goldfields Inc. (ON Canada)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Western Goldfields (USA) Inc.
      (Nevada)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Western Mesquite Mines Inc. (Nevada)</FONT>
</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>100%</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
</div>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"></TD>
    <TD colSpan=3>
      <P align=justify><FONT size=2>Variable interest entities (&#147;VIE&#146;s&#148;) as
      defined by the Accounting Standards Board in Accounting Guideline (&#147;AcG&#148;)
      15, </FONT><I><FONT size=2>Consolidation of Variable Interest
      Entities</FONT></I><FONT size=2>, 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.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=3>
      <P align=justify><FONT size=2>All intercompany transactions and balances
      are eliminated.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>3.</FONT></B> </TD>
    <TD colSpan=3>
      <P align=justify><B><FONT size=2>Changes in accounting
      policies</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(a)</FONT></I> </TD>
    <TD colSpan=2>
      <P align=justify><I><FONT size=2>Accounting policies implemented effective
      January 1, 2009</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><FONT size=2>(i)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>Effective January 1, 2009, the Company
      adopted Section 3064, </FONT><I><FONT size=2>Goodwill and Intangible
      Assets</FONT></I><FONT size=2>, 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
      Emerging Issues Committee (&#147;EIC&#148;) 27, </FONT><I><FONT size=2>Revenues and
      Expenditures in the Pre-operating Period</FONT></I><FONT size=2>. The
      adoption of Section 3064 did not have a material impact on the Company&#146;s
      consolidated financial position and results of operations for the six
      months ended June 30, 2009.</FONT></P></TD></TR></TABLE>
<P align=right><FONT size=2>Page 6</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>


<!--$$/page=-->
<A name="page_9"></A>

<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>3.</FONT></B> 	</TD>
	<TD colspan=4>
<P align="justify"><B><FONT size=2>Changes in accounting policies (continued)</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(a)</FONT></I> 	</TD>
	<TD colspan=3>
<P align="justify"><I><FONT size=2>Accounting policies implemented effective January 1, 2009 (continued)</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD width=5% valign=top>
<FONT size=2>(ii)</FONT> 	</TD>
	<TD colspan=2>
<P align="justify"><FONT size=2>Effective January 1, 2009, the Company adopted CICA Handbook Sections 1582, </FONT><I><FONT size=2>Business Combinations</FONT></I><FONT size=2>, (&#147;Section 1582&#148;), 1601, </FONT><I><FONT size=2>Consolidated
Financial Statements</FONT></I><FONT size=2>, (&#147;Section 1601&#148;) and 1602, </FONT><I><FONT size=2>Non-controlling Interests</FONT></I><FONT size=2>, (&#147;Section 1602&#148;) which replaces CICA Handbook Sections 1581, </FONT><I><FONT
size=2>Business Combinations</FONT></I><FONT size=2>, and 1600, </FONT><I><FONT size=2>Consolidated Financial Statements</FONT></I><FONT size=2>. Section 1582 establishes standards for the accounting for business combinations that is equivalent to
the business combination accounting standard under International Financial Reporting Standards (&#147;IFRS&#148;). Section 1582 is applicable for the Company&#146;s business combinations with acquisition dates on or after January 1, 2009. Section
1601 together with Section 1602 establishes standards for the preparation of consolidated financial statements. Section 1601 is applicable for the Company&#146;s interim and annual consolidated financial statements for its fiscal year beginning
January 1, 2009. The adoption of these standards had a significant impact on how the Company accounted for the business combination with Western Goldfields. The impact was as follows:</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD><TD width=5%></TD>	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD>
<P align="justify"><FONT size=2>Transaction costs were not capitalized as part of the purchase consideration and instead were expensed as incurred. As a result of this, the Company has expensed approximately &#36;6.6 million transaction
costs.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD><TD width=5%></TD>	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD>
<P align="justify"><FONT size=2>Measurement date for equity instruments issued by the Company was at the date of acquisition (May 27, 2009) and not at the average of a few days before and after the terms were agreed to and announced (March 4, 2009).
This resulted in using a share price of &#36;2.63 versus a share price of &#36;1.73. This resulted in an increase in the purchase consideration for the Business Combination of &#36;138.1 million, resulting in increased goodwill being recorded on the
balance sheet (Note 4 (a)).</FONT></P>
	</TD>
</TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD width=5% valign=top>
<FONT size=2>(iii)</FONT> 	</TD>
	<TD colspan=2>
<P align="justify"><FONT size=2>On January 20, 2009, the CICA issued EIC 173, </FONT><I><FONT size=2>Credit Risk and the Fair Value of Financial Assets and Financial Liabilities, </FONT></I><FONT size=2>which clarifies that an entity&#146;s own
credit risk and the credit risk of the counterparty should be taken into account in determining the fair value of financial assets and liabilities, including derivative instruments. EIC 173 is to be applied retrospectively without restatement of
prior periods in interim and annual financial statements for periods ending on or after the date of issuance of EIC 173. The Company adopted this recommendation January 1, 2009. The adoption of this standard had a significant impact on the fair
value of the gold forward sales at June 30, 2009. Without the inclusion of the Company&#146;s own credit risk the fair value of the gold hedge would have been &#36;61.4 million compared to &#36;54.5 million.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 7</FONT></P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">



<!--$$/page=-->
<A name="page_10"></A>

<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>3.</FONT></B> 	</TD>
	<TD colspan=2>
<P align="justify"><B><FONT size=2>Changes in accounting policies (continued)</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(b)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>International Financial Reporting Standards</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>In February 2008, the Canadian Accounting Standards Board confirmed January 1, 2011 as the date IFRS will replace current Canadian GAAP for publicly accountable enterprises. This will result in the Company reporting
under IFRS starting with the interim period ending March 31, 2011, with restatement for comparative purposes of amounts reported under Canadian GAAP. The Company expects the transition to IFRS to impact accounting policies, financing reporting, IT
systems and processes, as well as certain business activities.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>During the first quarter of 2009, the Company completed a high-level impact assessment to identify key areas that will be affected by the conversion. A project team has been established to manage the conversion
process, and a detailed IFRS conversion plan has been completed. The detailed analysis of the IFRS-Canadian GAAP differences, and the selection of accounting policy choices under IFRS has commenced and is expected to be completed by the end of the
fourth quarter of 2009. The Company will continuously monitor changes in IFRS leading up to the changeover date, and will update its conversion plan as required.</FONT></P>
	</TD>
</TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TR>
	<TD width=5% valign=top>
<B><FONT size=2>4.</FONT></B> 	</TD>
	<TD colspan=2>
<P align="justify"><B><FONT size=2>Business combination and asset acquisition</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(a)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>Acquisition of Western Goldfields Inc.</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>On March 4, 2009, the Company announced that it had entered into a definitive agreement to acquire all of the outstanding common shares of Western Goldfields. Under the agreement, the Company exchanged one common
share of Western Goldfields and Cdn&#36;0.0001 in cash for each common share of Western Goldfields. The Business Combination closed on May 27, 2009.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>142,796,287 common shares issued to Western Goldfields were valued at a &#36;2.63 per share. The value per share was determined using the May 27, 2009 closing share price of New Gold. Holders of options, warrants and
other convertible instruments of Western Goldfields exchanged such equity instruments for similar securities of New Gold at an exchange rate of one to one.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 8</FONT></P>

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<!--$$/page=--><A name=page_11></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><BR><FONT size=4>Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>4.</FONT></B> </TD>
    <TD colSpan=2>
      <P align=justify><B><FONT size=2>Business combination and asset
      acquisition (continued)</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(a)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Acquisition of Western Goldfields Inc.
      (continued)</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The preliminary allocation of the purchase
      price based on the consideration paid and on Western Goldfields net assets
      acquired is as follows:</FONT></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">$</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Issuance of New Gold shares
      (142,796,287 common</FONT> <FONT size=2>shares)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>375,554</FONT>
</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Fair value of options issued</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>9,749</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Fair value of warrants issued</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>11,850</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left><FONT
      size=2>Purchase consideration</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2>397,153</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Net assets acquired</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;<FONT size=2>Net working
      capital (including cash of $20,735)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>39,088</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;<FONT size=2>Property, plant and
      equipment</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>102,693</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;<FONT size=2>Mineral
      properties</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>234,479</FONT>
</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;<FONT size=2>Investments - reclamation and
      remediation</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>8,978</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;<FONT size=2>Other
      assets</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>1,790</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;<FONT size=2>Loss on gold contracts</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>(50,960</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;<FONT size=2>Long-term
      debt</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>(56,984</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;<FONT size=2>Reclamation and remediation
      liabilities</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>(4,882</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;<FONT size=2>Future income tax
      liability</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>(66,683</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT
      size=2>Goodwill</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>189,634</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>397,153</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<P align=justify style="margin-left: 10%"><FONT size=2>For 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,
including allocation of mining interest to depletable and non-depletable
properties, based on management&#146;s best estimates and available information at
the time of the Business Combination. The preliminary allocation is subject to
change. </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(i)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>Goodwill impairment charges</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>In preparing its first quarter consolidated
      financial statements, the Company elected to early adopt Section 1582. The
      acquisition date was determined to be May 27, 2009, the date the court
      approved the Business Combination under the Ontario Business Corporation
      Act (&#147;OBCA&#148;). On May 27, 2009, the share price was $2.63 (Cdn$2.92) which
      resulted in additional purchase consideration of $138.1 million that would
      not have been recorded under the Company&#146;s previous accounting policy. As
      a result, the Company recorded approximately $189 million in goodwill for
      the Business Combination with Western
Goldfields.</FONT></P></TD></TR></TABLE>
<P align=right><FONT size=2>Page 9</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>


<!--$$/page=-->
<A name="page_12"></A>

<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements June 30, 2009<br>
</FONT>
<FONT size=2>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>4.</FONT></B> 	</TD>
	<TD colspan=3>
<P align="justify"><B><FONT size=2>Business combination and asset acquisition (continued)</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(a)</FONT></I> 	</TD>
	<TD colspan=2>
<P align="justify"><I><FONT size=2>Acquisition of Western Goldfields Inc. (continued)</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD width=5% valign=top>
<FONT size=2>(i)</FONT> 	</TD>
	<TD>
<P align="justify"><FONT size=2>Goodwill impairment charges (continued)</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The Company allocated its goodwill to the Mesquite mine as it was the only reporting unit acquired pursuant to the Western Goldfields Business Combination. The net asset value of the Mesquite mine consist of plant and
equipment and mining properties. Plant and equipment were valued using an independent third party valuator. Mining properties were valued using the discounted cash flow of proven and probable reserves, measured, indicated and inferred resources. In
addition the Company valued the sulfide potential using prices paid for similar market transactions.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The carrying value of goodwill is reviewed at least annually and when impairment indicators exist. Asset valuations and impairment charges are based on management estimates and assumptions.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The Company has determined that it cannot support the carrying value of this goodwill as at June 30, 2009 and as a result the Company has recorded a goodwill impairment charge of &#36;189.6 million.</FONT></P>
	</TD>
</TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(b)</FONT></I> 	</TD>
	<TD colspan=2>
<P align="justify"><I><FONT size=2>Acquisition of Metallica and NGI</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD colspan=2>
<P align="justify"><FONT size=2>On May 9, 2008, the Company entered into an agreement to complete a business combination (the &#147;Transaction&#148;) with Metallica and NGI.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD width=5% valign=top>
<FONT size=2>(i)</FONT> 	</TD>
	<TD>
<P align="justify"><FONT size=2>Metallica</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>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.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>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.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 10</FONT></P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<!--$$/page=--><A name=page_13></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>4.</FONT></B> </TD>
    <TD colSpan=3>
      <P align=justify><B><FONT size=2>Business combination and asset
      acquisition (continued)</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(b)</FONT></I> </TD>
    <TD colspan="2">
      <P align=justify><I><FONT size=2>Acquisition of Metallica and NGI
      (continued)</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="5%">
      <P align=justify><FONT size=2>(i)  </FONT></P></TD>
    <TD>
      <FONT size=2>Metallica
  (continued)</FONT></TD></TR></TABLE>
<P align=justify style="margin-left: 15%"><FONT size=2>The final allocation of the purchase price based
on the consideration paid and Metallica&#146;s net assets acquired is as follows:
</FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="85%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp;$</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Issuance of New Gold shares
      (87,447,821 common</FONT> <FONT size=2>shares)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>605,139</FONT>
</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Fair value of options issued</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>7,294</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Fair value of warrants
      issued</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>46,674</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Transaction costs</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>3,651</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><FONT size=2>Purchase consideration</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>662,758</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Net assets acquired</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;<FONT size=2>Net working capital acquired
      (including cash of $34,154)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>35,340</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;<FONT size=2>Mineral property,
      plant and equipment</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>814,352</FONT>
</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;<FONT size=2>Other long-term assets</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>2,214</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;<FONT size=2>Long-term
      liabilities</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>(3,684</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;<FONT
      size=2>Future income tax liability</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>(185,464</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>662,758</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>(ii)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>NGI</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>This element of the Transaction has been
      accounted for as a purchase of assets and assumption of liabilities of NGI
      by Peak Gold.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>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 $7.82 per share, the share price of NGI
      as of June 30, 2008, the closing date of the
  Transaction.</FONT></P></TD></TR></TABLE>
<P align=right><FONT size=2>Page 11</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_14></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><BR><FONT size=4>Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>4.</FONT></B> </TD>
    <TD colSpan=3>
      <P align=justify><B><FONT size=2>Business combination and asset
      acquisition (continued)</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(b)</FONT></I> </TD>
    <TD colspan="2">
      <P align=justify><I><FONT size=2>Acquisition of Metallica and NGI
      (continued)</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="5%">
      <P align=justify><FONT size=2>(ii)  </FONT></P></TD>
    <TD>
      <FONT size=2>NGI
(continued)</FONT></TD></TR></TABLE>
<P align=justify style="margin-left: 15%"><FONT size=2>The final allocation of the purchase price based
on the consideration paid and NGI&#146;s net assets acquired is as follows:
</FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="85%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">&nbsp;$</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Issuance of New Gold shares
      (37,005,717 common</FONT> <FONT size=2>shares)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>289,538</FONT>
</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Fair value of options issued</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>8,241</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Fair value of warrants
      issued</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>57,415</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Transaction costs</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>4,011</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><FONT size=2>Purchase consideration</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>359,205</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Net working capital (including
      cash of $103,564)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>85,687</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Mineral property, plant and equipment</FONT>
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>537,720</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Other assets</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>94,631</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Long-term liabilities</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>(252,892</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Future income tax
      liability</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>(84,337</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Convertible debentures</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>(21,604</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>359,205</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<P align=justify style="margin-left: 15%"><FONT size=2>For the purposes of these consolidated financial
statements, the purchase consideration has been allocated to the fair value of
assets acquired and liabilities assumed, including allocation of mining
interests to depletable and non-depletable properties, based on management&#146;s
best estimates and all available information at the time of the Transaction.
</FONT></P>
<P align=right><FONT size=2>Page 12</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_15></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>5.</FONT></B> </TD>
    <TD>
      <P align=justify><B><FONT size=2>Restricted cash</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The Company has a term loan facility with a
      syndicate of banks (Note 9 (c)). Under the terms of this facility, the
      Company has set aside $7.5 million in a cost overrun account until the
      completion of the Mesquite mine development project, which occurs on
      satisfaction of physical and economic completion tests as set out in the
      credit agreement. At completion, unused funds will be applied to fund a
      debt service reserve account, established to hold an amount equal to the
      debt service amounts payable on the next repayment date as set out in the
      credit agreement, and thereafter any surplus funds may be returned to the
      Company. Interest earned on restricted cash is for the account of the
      Company. Completion of the Mesquite mine development project, as defined
      in the credit agreement, has not yet been reached.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>6.</FONT></B> </TD>
    <TD>
      <P align=justify><B><FONT size=2>Inventories and stockpiled
      ore</FONT></B></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B><FONT size=2>June 30,</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>December 31,</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B><FONT size=2>2009</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>2008</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B><FONT size=2>$</FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Supplies</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B><FONT
      size=2>18,022</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>12,179</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Work-in-process (a)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B><FONT size=2>11,522</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>5,008</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Heap leach ore (b)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B><FONT
      size=2>56,099</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>19,141</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Stockpiled ore (c)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B><FONT size=2>76</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>112</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Finished goods</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><B><FONT size=2>2,132</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>2,962</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      width="12%"><B><FONT size=2>87,851</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2>39,402</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
</div>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(a)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Work-in-process</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>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&#233;
      or concentrate).</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(b)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Heap leach ore</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The recovery of gold from certain oxide ores
      is achieved through the heap leaching process used at the Cerro San Pedro
      and Mesquite 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.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(c)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Stockpiled
  ore</FONT></I></P></TD></TR></TABLE>
<P align=justify style="margin-left: 5%"><FONT size=2>The low-grade stockpiled ore is located at the
Peak mines and is forecasted to be drawn down throughout the remainder of the
life of the mines. </FONT></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The amount of inventories recognized in operating
expenses for the three and six months ended June 30, 2009 is $29.8 million and
$57.9 million, respectively. There were no reversals of write-downs during the
three and six months ended June 30, 2009. </FONT></P>
<P align=right><FONT size=2>Page 13</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_16></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<P align=justify><B><FONT size=2>7. </FONT></B></P>
<P align=justify style="margin-left: 5%; margin-top: -25.5pt"><B><FONT size=2>
Investments</FONT></B><BR></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company owns Cdn$160 million of face value of
long-term asset backed notes (&#147;AB Notes&#148;). These AB Notes were issued as
replacement of asset backed commercial paper (&#147;ABCP&#148;) formerly held by the
Company. When the ABCP matured but was not redeemed in 2007, it became the
subject of a restructuring process that replaced the ABCP with long-term asset
backed securities (&#147;New Notes&#148;). The restructuring was completed and the AB
Notes were issued on January 21, 2009. </FONT></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company has estimated the fair value of the
New Notes at June 30, 2009 using the methodology and assumptions outlined below.
The fair value estimate of the New Notes under the restructuring has been
calculated based on information provided by the Pan Canadian Investor Committee,
the monitor of the restructuring, and the administrator of MAV2 and MAV3. The
table below summarizes the Company&#146;s valuation: </FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>Base case </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>fair value </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>&nbsp;Expected </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Restructuring categories </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>Face value </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>estimate* </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%" nowrap><FONT
      size=2>&nbsp;maturity date </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>&nbsp;$</FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>&nbsp;$</FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>(millions) </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>(millions) </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>MAV 2 Notes </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%" nowrap><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp; &nbsp;A1 (rated A)
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>88.5 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>57.8 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff nowrap><FONT size=2>December 31, 2016
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; &nbsp;A2 (rated A) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>27.2 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>15.4 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>December 31, 2016 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp; &nbsp;B </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>4.9 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>0.8 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff nowrap><FONT size=2>December 31, 2016
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; &nbsp;C </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>3.7 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>0.2 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>December 31, 2016 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Traditional asset tracking
      notes </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff nowrap><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; &nbsp;MAV3 - Class 9 </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>0.1 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>0.1 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>September 12, 2015 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Ineligible asset tracking
      notes </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff nowrap><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; &nbsp;MAV2 - Class 3/13/15 </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>13.6 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>2.3 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%" nowrap><FONT size=2>December 20, 2012 to </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff nowrap><FONT size=2>October 24, 2016 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT
      size=2>138.0 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT
      size=2>76.6 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="10%"><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
</div>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><FONT size=2>*</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>the range of fair values estimated by the
      Company varied between $69.6 million (Cdn$80.9 million) and $84.6 million
      (Cdn$98.3 million)</FONT></P></TD></TR></TABLE>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company&#146;s valuation methodology entails
gathering as many facts as possible about the New Notes, making assumptions and
estimates where certain facts are unavailable, and then applying its best
estimate of prospective buyers&#146; required yield for investing in such notes.
These figures are then used to calculate 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. In several
cases, the Company has been able to identify the net asset value of the assets
supporting certain of its notes and has factored these values into its analysis.
</FONT></P>
<P align=right><FONT size=2>Page 14</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>


<!--$$/page=-->
<A name="page_17"></A>

<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>7.</FONT></B> 	</TD>
	<TD colspan=2>
<P align="justify"><B><FONT size=2>Investments (continued)</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD colspan=2>
<P align="justify"><FONT size=2>The fair market value of the AB Notes has been impacted by a number of factors as follows:</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD>
<P align="justify"><FONT size=2>There has been an improvement in general corporate credit market conditions over this time period. This decrease in credit risk impacts the intrinsic value of the AB Notes due to a general lowering of default risk -
albeit a decline from historically high levels - and a decrease in the likelihood that credit risk limits built into the AB Notes will be exceeded (specifically, the spread-based margin triggers). Accordingly, the required yield on the AB Notes has
been reduced to reflect easing in the credit markets.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD>
<P align="justify"><FONT size=2>The simple passage of time. As with all debt instruments, the value of these AB Notes will approach par as the date of maturity approaches and assuming that they do not default. The reduction in the time-to-maturity
is a factor that increases the fair market value of the AB Notes this period.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD>
<P align="justify"><FONT size=2>There were two defaults in the pool of assets underlying the AB &#145;pooled&#146; notes. Two credit derivative trades that had Canadian Imperial Bank of Commerce as the counterparty were included in the pool but were
not subject to the moratorium on margin calls and were also not supported by the margin facility. These trades failed to meet a required margin call and were subsequently terminated on March 13, 2009 with a 100% loss. This loss translates into 1.1%
of the total value of the AB Notes and is realized within the most- junior &#145;C&#146; notes which represent the first 3% of the total pool. Thus, the maximum value that could be returned to investors upon the maturity of the C notes is 67% of
par.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD>
<P align="justify"><FONT size=2>The anticipated missed interest payments on the AB Notes. The interest income on the pool of assets underlying the pooled notes is variable and mostly based on the prevailing bankers&#146; acceptance rates. This
variable income must first pay the fixed expense of the Margin Funding Facility (&#147;MFF&#148;) fee before any interest is paid to noteholders. The MFF lenders are the Canadian banks, some international banks, and the federal government. If there
are not enough funds to pay the MFF fee in any given period, then the shortfall accrues and is payable in priority in future periods. There will be no interest payments on the notes until there is a rise in the prevailing interest rates and only
once any accrued MFF fees are repaid. This anticipated near-term lack of income on the notes has a negative impact on their fair market value.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<LI>&nbsp;</LI> 	</TD>
	<TD>
<P align="justify"><FONT size=2>In April 2009 the Company received principal repayments in the amount of Cdn&#36;9.4 million on an AB Note backed by traditional assets. This represented a return of principal at par for substantially all of the face value of the note. However, this note was valued at 97% of face value
prior to the repayment; the impact on the remaining portfolio of AB Notes is a re-balancing towards lower-valued notes and, therefore, a decrease in the weighted average price of the remaining portfolio.</FONT></P>
	</TD>
</TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TR>
<TD width=5%></TD>	<TD colspan=2>
<P align="justify"><FONT size=2>As a result of this analysis, the Company has estimated the fair market value of its AB Notes investment to be &#36;76.6 million (Cdn&#36;89.0 million) as at June 30, 2009.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD colspan=2>
<P align="justify"><FONT size=2>While the Company believes that it has utilized an appropriate methodology to estimate fair value, given the current state and ongoing volatility of global credit markets there can be no assurance that
management&#146;s estimate of potential recovery as at June 30, 2009 is accurate. Subsequent adjustments, either materially higher or lower, may be required in future reporting periods. The Company will continue to aggressively manage the process to
recover the maximum value from the original investments and interest due.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 15</FONT></P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<!--$$/page=--><A name=page_18></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>7.</FONT></B> </TD>
    <TD>
      <P align=justify><B><FONT size=2>Investments
  (continued)</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The secondary market for the AB Notes is
      very illiquid with only a very small number of trades reported that took
      place at very distressed sales prices. There is little bidding activity
      and it is difficult to ascertain what potential volume could be transacted
      at those bids. Investors wishing to sell their AB Notes would have to give
      up a significant liquidity discount below the intrinsic value of the
      notes. It is uncertain if or when a more liquid secondary market for the
      AB Notes will develop.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The Company has designated the investments
      as held-for-trading financial instruments.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>8.</FONT></B> </TD>
    <TD>
      <P align=justify><B><FONT size=2>Mining
  interests</FONT></B></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="37%" colspan="8"
    >&nbsp; <B><FONT size=2>June 30, 2009</FONT></B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=2>Accumulated</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=2>depreciation</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B><FONT size=2>Net book</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=2>Cost</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=2>and depletion</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=2>value</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp;<STRONG>$</STRONG></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp;<STRONG>$</STRONG></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&nbsp;<STRONG>$</STRONG></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Mining properties</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT
      size=2>1,801,491</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT
      size=2>107,756</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><B><FONT
      size=2>1,693,735</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2>Plant
      and equipment</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=2>401,338</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=2>105,831</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B><FONT size=2>295,507</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><B><FONT size=2>2,202,829</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><B><FONT size=2>213,587</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><B><FONT size=2>1,989,242</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="37%" colspan="8">
    <p align="right">&nbsp; <FONT size=2>December 31, 2008</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>Accumulated</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2>depreciation</FONT> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>Net book</FONT>
    </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>Cost</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>and depletion</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>value</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">&nbsp;$</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">&nbsp;$</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">&nbsp;$</TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Mining properties</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>1,540,195</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>98,518</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>1,441,677</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2>Plant
      and equipment</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>280,720</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>103,636</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>177,084</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>1,820,915</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>202,154</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>1,618,761</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company capitalized $9.3 million of interest
for the six months ended June 30, 2009 (December 31, 2008 - $10.6 million)
related to the New Afton project. </FONT></P>
<P align=justify style="margin-left: 5%">A summary of net book value by property is as follows: </P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD align=left style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=left width="27%" style="border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1" colspan="7">
    <p align="center"><FONT
      size=2>Mining properties</FONT></TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="7%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="7%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=left width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="7%" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-top-style: none; border-top-width: medium"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=center width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Non- </FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=right width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="7%" style="border-top-style: none; border-top-width: medium"><FONT size=2>Plant and </FONT></TD>
    <TD align=right width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="7%" style="border-top-style: none; border-top-width: medium"><FONT size=2>June 30, </FONT></TD>
    <TD align=right width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="1%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD>
    <TD align=right width="7%" style="border-top-style: none; border-top-width: medium" nowrap><FONT size=2>December 31, </FONT></TD>
    <TD align=left width="2%" style="border-top-style: none; border-top-width: medium" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>Depletable </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>depletable </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>Total </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>equipment </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>2009 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=right width="2%" >&nbsp;</TD>
    <TD align=right width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$&nbsp;</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Amapari </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>5,000 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>5,000 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>3,269 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>8,269 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>9,537 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Cerro San Pedro </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>245,087 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>84,972 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>330,059 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>62,973 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>393,032 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>399,630 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>El Morro project (a)
</FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>381,349 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>381,349 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>381,349 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>377,430 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>New Afton project </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>598,862 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>598,862 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>71,532 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>670,394 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>632,085 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Peak Mines </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>53,477 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>65,079 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>118,556 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>54,615 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>173,171 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>172,710 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Mesquite </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>189,640 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>43,936 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>233,576 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>102,481 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>336,057 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Other projects (b) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>26,333 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>26,333 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>33 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>26,366 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>26,746 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Corporate </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>- </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>- </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>- </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>604 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>604 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>623 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"
    bgColor=#e6efff><FONT size=2>488,204 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"
    bgColor=#e6efff><FONT size=2>1,205,531 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"
    bgColor=#e6efff><FONT size=2>1,693,735 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"
    bgColor=#e6efff><FONT size=2>295,507 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"
    bgColor=#e6efff><FONT size=2>1,989,242 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"
    bgColor=#e6efff><FONT size=2>1,618,761 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<P align=right><FONT size=2>Page 16</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_19></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>8.</FONT></B> </TD>
    <TD colSpan=3>
      <P align=justify><B><FONT size=2>Mining interests
      (continued)</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(a)</FONT></I> </TD>
    <TD colSpan=2>
      <P align=justify><I><FONT size=2>Chile - El Morro project (&#147;El
      Morro&#148;)</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify><FONT size=2>The El Morro copper-gold project consists of
      the La Fortuna and El Morro areas. Xstrata has a 70% interest in El
      Morro.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(b)</FONT></I> </TD>
    <TD colSpan=2>
      <P align=justify><I><FONT size=2>Other projects</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><FONT size=2>(i)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>Chile - Rio Figueroa
project</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The Company has an option agreement with
      Sociedad Contractual Minera Los Potrillos to acquire a 100% interest in a
      copper-gold exploration project referred to as the Rio Figueroa
      project.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><FONT size=2>(ii)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>USA - Liberty Bell</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The Company entered into an exploration
      agreement with the right to acquire the Liberty Bell gold project in
      central Alaska.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><FONT size=2>(iii)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>Canada - Ajax</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The Company owns a 100% interest in the
      Ajax-Python Claim Group.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>9.</FONT></B> </TD>
    <TD colSpan=3>
      <P align=justify><B><FONT size=2>Long-term
  debt</FONT></B></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>Long-term debt consists of the
      following:</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B><FONT size=2>June 30,</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>December 31,</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B><FONT size=2>2009</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>2008</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B><FONT size=2>$</FONT></B></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Senior secured notes
      (a)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B><FONT
      size=2>151,621</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>182,553</FONT>
</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Subordinated convertible debentures (b)</FONT>
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><B><FONT size=2>32,611</FONT></B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>29,834</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Term loan facility (c)</FONT>
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B><FONT
      size=2>63,891</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2>El
      Morro project funding loan (d)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B><FONT size=2>2,310</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><B><FONT
      size=2>250,433</FONT></B> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>212,387</FONT>
</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT size=2>Less:
      current portion of term loan facility</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B><FONT size=2>(21,223</FONT></B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B><FONT size=2>)</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><B><FONT size=2>229,210</FONT></B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"
    bgColor=#e6efff><FONT size=2>212,387</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(a)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Senior secured notes</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The face value of the notes at June 30, 2009
      was Cdn$187 million (December 31, 2008 - Cdn$237 million). The notes
      mature and become due and payable on June 28, 2017, and bear interest at
      the rate of 10% per annum. Interest is payable in arrears in equal
      semi-annual instalments on January 1 and July 1 in each
  year.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The notes are secured by a charge on the
      assets comprising and relating to the Company&#146;s New Afton gold-copper
      project.</FONT></P></TD></TR></TABLE>
<P align=right><FONT size=2>Page 17</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>


<!--$$/page=-->
<A name="page_20"></A>

<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements June 30, 2009<br>
</FONT>
<FONT size=2>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>9.</FONT></B> 	</TD>
	<TD colspan=2>
<P align="justify"><B><FONT size=2>Long-term debt (continued)</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(a)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>Senior secured notes (continued)</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>During the first quarter of 2009, the Company acquired Cdn&#36;50 million face value of its senior secured notes for consideration of Cdn&#36;30 million for the noteholders. This results in a reduction of
approximately Cdn&#36;5 million per year in interest payments. The Company recorded the gain on redemption of &#36;14.2 million related to this transaction.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(b)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>Subordinated convertible debentures</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The face value of the debentures as at June 30, 2009 is Cdn&#36;55 million (December 31, 2008 - Cdn&#36;55 million). Each debenture has a principal amount of Cdn&#36;1,000, bears interest at a rate of 5% per annum and
is convertible by the holders into shares of the Company at any time up to June 29, 2014 at a conversion price of Cdn&#36;9.35 per share. Interest is payable in arrears in equal semi-annual instalments on January 1 and July 1 in each
year.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The Debentures are subordinate to the notes and any secured indebtedness incurred subsequent to the issue of the Debentures.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The Debenture Indenture requires the Company to comply with certain reporting and other covenants.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(c)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>Term loan facility</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>As part of the Business Combination (Note 4 (a)), the Company acquired a term loan facility with a syndicate of banks under which the Company can borrow up to &#36;105 million in connection with the development of the
Mesquite mine. The term of the facility is until December 31, 2012 and comprises a multiple-draw term loan of which &#36;87.3 million is available as required for the development of the Mesquite mine; the remainder will be available for up to 12
months after completion for corporate purposes. The facility is secured by all of the assets of the Company&#146;s wholly-owned subsidiary, Western Mesquite Mines Inc. (&#147;WMMI&#148;) and a pledge of the shares of WMMI owned by the Company. In
addition, until completion, the facility is guaranteed by the Company. Under the terms of the facility, completion as defined by the credit agreement must be reached by June 30, 2009. The Company failed the completion test but received an extension
from the syndicate to allow an amendment to the facility to be negotiated by September 30, 2009 (see Note 14 (d)).</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>Interest on the term loan is charged at U.S. dollar LIBOR plus 2.2% prior to completion and U.S. dollar LIBOR plus 1.75% after completion. Completion occurs upon the satisfaction of certain technical and financial
criteria as defined in the credit agreement. As at June 30, 2009, the Company had drawn &#36;86.3 million less repayments of &#36;22.4 million, under the facility and incurred interest at an average rate of approximately 2.6% for the period.
Repayment of the project facility is on a semi- annual basis, from December 31, 2008 through December 31, 2012 according to an agreed schedule of percentages of the loan outstanding on the final day of the availability period. In addition to the
scheduled repayments, mandatory prepayments are required semi-annually based on excess cash flows from the Mesquite mine. At June 30, 2009, there were excess cash flows that triggered a prepayment of approximately &#36;3 million. This is expected to
be paid in the third quarter.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 18</FONT></P>

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<!--$$/page=-->
<A name="page_21"></A>

<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements June 30, 2009<br>
</FONT>
<FONT size=2>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>9.</FONT></B> 	</TD>
	<TD colspan=2>
<P align="justify"><B><FONT size=2>Long-term debt (continued)</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(d)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>El Morro project funding loan</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>Xstrata has agreed to fund 70% of the Company&#146;s program funding commitments on El Morro (Note 8 (a)) until commencement of commercial production. These amounts, plus interest, will be repaid out of the
Company&#146;s distributions once El Morro is in production. Interest is based on the Xstrata cost of financing plus 100 basis points and is compounded monthly. As of June 30, 2009, Xstrata has funded &#36;2.3 million of the Company&#146;s funding
commitments.</FONT></P>
	</TD>
</TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD><TR>
	<TD width=5% valign=top>
<B><FONT size=2>10.</FONT></B> 	</TD>
	<TD colspan=2>
<P align="justify"><B><FONT size=2>Derivative instruments</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(a)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>Mark-to-market loss on gold hedging contracts</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>Under the terms of the term loan facility (Note 9 (c)), WMMI was required, as a condition precedent to drawdown the loan, to enter into a gold hedging program acceptable to the banking syndicate. As such, the Company
has executed gold forward sales contracts for 429,000 ounces of gold at a price of &#36;801 per ounce. The hedging contracts represent a commitment of 5,500 ounces per month for 78 months that commenced July 2008 with the last commitment deliverable
in December 2014.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The Company settles these contracts, at the Company&#146;s option, by physical delivery of gold or on a net financial settlement basis. As at June 30, 2009, the Company had remaining gold forward sales contracts for
363,000 ounces of gold at a price of &#36;801 per ounce at a remaining commitment of 5,500 ounces per month for 66 months. Realized gains of &#36;0.7 million were recognized for the three month period ended June 30, 2009. The remaining contracts
were marked-to-market as at June 30, 2009 using a spot price of gold of &#36;934 per ounce. The cumulative unrealized loss of &#36;54.5 million has been disclosed as a liability as at June 30, 2009 and the Company has recorded an unrealized and
realized gain of &#36;8.2 million related to the mark-to- market adjustment required to revalue the May 27, 2007 cumulative unrealized loss of &#36;62.7 million to &#36;54.5 million.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<I><FONT size=2>(b)</FONT></I> 	</TD>
	<TD>
<P align="justify"><I><FONT size=2>Mark-to-market gain on fuel contracts</FONT></I></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The Company entered into fuel hedge contracts that represent a total commitment of 1.5 million gallons of diesel per year at prices of &#36;1.82 and &#36;2.00 per gallon in 2009 and 2010, respectively. The Company
will be financially settling 126,000 gallons of diesel per month.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>The contracts were marked-to-market as at June 30, 2009. As at June 30, 2009, the Company had a remaining commitment of 4.5 million gallons of diesel for 18 months. The cumulative unrealized gain of &#36;0.8 million
has been disclosed as an asset on the balance sheet as at June 30, 2009.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 19</FONT></P>

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<!--$$/page=--><A name=page_22></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>11.</FONT></B> </TD>
    <TD colSpan=2>
      <P align=justify><B><FONT size=2>Share capital</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(a)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Authorized</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>Unlimited number of voting common shares
      without par value</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(b)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Stock
options</FONT></I></P></TD></TR></TABLE>
<P align=justify style="margin-left: 10%"><FONT size=2>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 and have a maximum term of seven years from date of grant.
</FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>Weighted</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>average</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>Number of</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>exercise</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>options</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>price</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>Cdn$</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Balance, December 31,
      2007</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>2,149,600</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>9.10</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Granted</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>3,084,700</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>6.92</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Options assumed on acquisition
      of Metallica</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>1,930,095</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>4.07</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Options assumed on acquisition of NGI</FONT>
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>2,828,500</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>7.03</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Exercised</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT
size=2>(424,090</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>3.39</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Forfeited</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>(578,917</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>8.44</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Balance, December 31,
      2008</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>8,989,888</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>6.94</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Options assumed on acquisition of
      Western</FONT> <FONT size=2>Goldfields</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>5,698,717</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>1.58</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Granted</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>5,700,000</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>3.01</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Exercised</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>(90,000</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>1.58</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Forfeited</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>(1,485,017</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>5.95</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left><FONT
      size=2>Balance, June 30, 2009</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2>18,813,588</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="12%"><FONT
      size=2>4.23</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
</div>
<P align=right><FONT size=2>Page 20</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_23></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>11.</FONT></B> </TD>
    <TD colSpan=2>
      <P align=justify><B><FONT size=2>Share capital
    (continued)</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(b)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Stock options
    (continued)</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The following table summarizes information
      about the stock options outstanding at June 30,
  2009:</FONT></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right colSpan=3><FONT
      size=2>Options outstanding </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    colSpan=4><FONT size=2>Options exercisable </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="16%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="16%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=right width="16%"><FONT size=2>Weighted </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="16%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="16%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left width="16%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=right><FONT size=2>Weighted </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>average </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>Weighted </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right width="16%"><FONT size=2>Number of </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>average </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>remaining </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>Number of </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>average </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>stock options </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>exercise </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>contractual </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>options </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>exercise </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>outstanding </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>price </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>life </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>exercisable </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>price </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>Cdn$ </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>Cdn$ </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD >&nbsp;</TD>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>2,303,450 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>0.67 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>3.44 years
    </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>2,303,450
    </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>0.67 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>1,893,100 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>1.79 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>4.27 years </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>1,818,100 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>1.81 </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>3,964,167 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>2.67 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>5.90 years
    </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>1,658,167
    </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>2.67 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>3,394,000 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>3.21 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>6.69 years </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>- </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>- </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>146,687 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>3.55 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>2.15 years
    </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>146,687
</FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>3.55 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>600,000 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>4.60 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>0.28 years </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>600,000 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>4.60 </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>753,318 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>5.45 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>3.35 years
    </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>486,652
</FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>5.45 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>1,667,000 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>6.39 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>2.85 years </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>1,238,000 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>6.49 </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>2,107,700 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>7.70 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>3.90 years
    </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>839,233
</FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>7.41 </FONT></TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>1,731,666 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>9.29 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>2.72 years </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>1,731,666 </FONT></TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>9.29 </FONT></TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff><FONT size=2>252,500 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff><FONT size=2>11.00 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff><FONT size=2>1.58 years </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff><FONT size=2>252,500 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    bgColor=#e6efff><FONT size=2>11.00 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right><FONT
      size=2>18,813,588 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right><FONT
      size=2>4.23 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right><FONT
      size=2>4.42 years </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right><FONT
      size=2>11,074,455 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right><FONT
      size=2>4.50 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    >&nbsp;</TD></TR></TABLE>
</div>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>The Company granted 2,306,000 stock options
      on February 17, 2009 and 3,394,000 on June 2, 2009 to employees and
      directors. These options have an exercise price of Cdn$2.71 and Cdn$3.21,
      respectively. The options vest over a three year period and have a
      contractual life of five to seven years from date of
  grant.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>5,698,717 stock options were granted on June
      2, 2009 upon the acquisition of Western Goldfields (Note 4
    (a)).</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(c)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Stock-based
  compensation</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>For the three month period ended June 30,
      2009, the Company recorded $1.6 million (June 30, 2008 - $0.6 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$1.90 (June 30, 2008 -
      Cdn$8.00) was calculated using the following assumptions: no dividends are
      to be paid; volatility of 60% (June 30, 2008 - 60%), risk free interest
      rate of 2.5% (June 30, 2008 - 3.53%); and expected life of five to seven
      years (June 30, 2008 - 4.1 years).</FONT></P></TD></TR></TABLE>
<P align=right><FONT size=2>Page 21</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_24></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>11.</FONT></B> </TD>
    <TD colSpan=2>
      <P align=justify><B><FONT size=2>Share capital
    (continued)</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I><FONT size=2>(d)</FONT></I> </TD>
    <TD>
      <P align=justify><I><FONT size=2>Share purchase
  warrants</FONT></I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><FONT size=2>A summary of the changes in share purchase
      warrants is presented below:</FONT></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="90%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>Weighted</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>average</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>Number of</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>exercise</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>warrants</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><FONT
      size=2>price</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>Cdn$</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Balance, December 31,
      2007</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>21,750,000</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>15.00</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Issued</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>7,386,167</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>9.00</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Metallica share purchase
      warrants exercisable</FONT> <FONT size=2>into New Gold shares</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>17,196,115</FONT>
    </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>3.93</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>NGI share purchase warrants</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>27,825,352</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>15.00</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Expired</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>(14,046,115</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff><FONT size=2>3.44</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Balance, December 31, 2008</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>60,111,519</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%"><FONT size=2>13.80</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Issued</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>24,513</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff><FONT size=2>15.00</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>WGI share purchase warrants exercisable</FONT>
      <FONT size=2>into New Gold shares</FONT> </TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="12%" style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>6,056,180</FONT> </TD>
    <TD align=left width="2%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="12%" style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>0.83</FONT> </TD>
    <TD align=left width="2%" style="border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-top-style:solid; border-top-width:1" align=left
      bgColor=#e6efff><FONT size=2>Balance, June 30, 2009</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="12%"
    bgColor=#e6efff><FONT size=2>66,192,212</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-top-style:solid; border-top-width:1" align=right width="12%"
    bgColor=#e6efff><FONT size=2>12.61</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<P align=justify style="margin-left: 10%"><FONT size=2>The following table summarizes information about
outstanding share purchase warrants at June 30, 2009: </FONT></P>
<div align="center">
  <center>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="50%" border=0>

  <TR vAlign=top>
    <TD align=right width="30%"><FONT size=2>Number</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=right width="30%"><FONT size=2>Exercise</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="30%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="30%"><FONT size=2>of
      warrants</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>prices</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>Expiry date</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD align=right width="30%">&nbsp;<FONT size=2>Cdn$</FONT></TD>
    <TD align=center >&nbsp;</TD>
    <TD align=center >&nbsp;</TD>
    <TD align=center >&nbsp;</TD>
    <TD align=center >&nbsp;</TD>
    <TD align=center >&nbsp;</TD>
    <TD align=center >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD >&nbsp;</TD>
    <TD >&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>3,150,000</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>6.11</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>December 20,
      2009</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>2,300,000</FONT> </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>0.83</FONT> </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>June</FONT> <FONT size=2>9,
      2011</FONT> </TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>459,810</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>0.83</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>July 12,
      2011</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>21,750,000</FONT> </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>15.00</FONT> </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>April 3, 2012</FONT> </TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>3,296,370</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>0.83</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>June</FONT> <FONT
      size=2>9, 2012</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right><FONT size=2>7,386,167</FONT> </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>9.00</FONT> </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right><FONT size=2>November 28, 2012</FONT> </TD>
    <TD align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=right bgColor=#e6efff><FONT size=2>4,150,000</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>15.00</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff><FONT size=2>June</FONT> <FONT
      size=2>28, 2017</FONT> </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>23,699,865</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>15.00</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT
      size=2>June</FONT> <FONT size=2>28, 2017</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right
      bgColor=#e6efff><FONT size=2>66,192,212</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
  </center>
</div>
<P align=right><FONT size=2>Page 22</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_25></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<P align=justify><B><FONT size=2>12.
</FONT></B></P>
<P align=justify style="margin-left: 5%; margin-top: -25.5pt"><B><FONT size=2>
Supplemental cash flow information
</FONT></B></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="23%"
    colSpan=4><FONT size=2>Three months ended June 30, </FONT></TD>
    <TD style="BORDER-BOTTOM: medium none #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="23%"
    colSpan=4><FONT size=2>Six months ended June 30, </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:none; border-top-width:medium" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
size=2>&nbsp;<STRONG>$</STRONG></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>&nbsp;$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
size=2>&nbsp;<STRONG>$</STRONG></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>&nbsp;$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Change in non-cash working
      capital </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp; &nbsp;Accounts
      receivable </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>6,963</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>(5,152</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT
      size=2><B>(1,403</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>(8,952</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; &nbsp;Inventories and stockpiled
      ore </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2><B>(5,873</B></FONT></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>3,367
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2><B>(3,349</B></FONT></TD>
    <TD align=left width="2%" ><B>)</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>5,615
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp; &nbsp;Accounts payable and accrued liabilities </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT
      size=2><B>1,495</B> </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT
      size=2>(6,158</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT
      size=2><B>(1,889</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT
      size=2>(7,672</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp; &nbsp;Prepaids and other </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>479</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>(71</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>1,903</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>119 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2><B>3,064</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>(8,014</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2><B>(4,738</B></FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>(10,890</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Non-cash financing and investing activities
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Shares, options and warrants issued on acquisition (Note 4 (a) and 4 (b)) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2><B>397,153</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2>894,677 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2><B>397,153</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT
      size=2>894,677 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Operating activities included the following payments </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp; &nbsp;Interest paid
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>9,646</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>139 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>9,680</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>139 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; &nbsp;Income taxes paid </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>476</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>4,145 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>2,137</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>6,025 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
</div>
<P align=justify style="margin-left: 5%"><FONT size=2>Non-cash investing activities includes $1.3
million and $2.3 million for the three and six months ended June 30, 2009,
respectively, and represents the Company&#146;s share of contributions to the El
Morro project funded by Xstrata (Note 9 (d)). </FONT></P>
<P align=right><FONT size=2>Page 23</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_26></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<P align=justify><B><FONT size=2>13. </FONT></B></P>
<P align=justify style="margin-left: 5%; margin-top: -25.5pt"><B><FONT size=2>
Segmented information</FONT></B><BR></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company manages its operations by geographical
location. These reportable operating segments are summarized in the table below:
</FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="48%" colspan="14"
    >
    <p align="right">&nbsp; <B><FONT size=2>Three months ended June 30, 2009</FONT></B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(Loss)</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Depletion</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>earnings</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Expenditures</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>and</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>from</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Total</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>for mining</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>Revenues</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>depreciation</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>operations</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>assets</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>interests</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Brazil</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,488</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>666</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(2,320</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>32,833</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(167</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Chile </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(176</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>391,031</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(540</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Canada </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>4</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(4</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>675,015</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(23,534</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Mexico </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>27,934</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>6,117</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>5,300</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>450,208</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(242</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Australia</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>21,054</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,065</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>8,564</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>209,471</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(8,942</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>USA </FONT><SUP><FONT size=2>(3)</FONT></SUP>
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>10,211</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>1,790</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(191,313</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>415,285</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(167</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Other </FONT><SUP><FONT
      size=2>(1)</FONT></SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>28</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(10,842</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>183,232</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(50</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>61,687</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>10,670</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>(190,791</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    ><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>2,357,075</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>(33,642</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    ><FONT size=2>)</FONT> </TD></TR></TABLE>
</div>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP><FONT size=2>(1)</FONT></SUP></TD>
    <TD>
      <FONT size=2>Other includes corporate balances and intercompany
      eliminations and exploration properties</FONT></TD></TR>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP><FONT size=2>(2)</FONT></SUP> </TD>
    <TD>
      <P align=justify><FONT size=2>Segments acquired on June 30, 2008 (Note
      1)</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP><FONT size=2>(3)</FONT></SUP> </TD>
    <TD>
      <P align=justify><FONT size=2>Segment acquired on June 1, 2009 (Note 4
      (a)) - results from operations for one month
only</FONT></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="48%" colspan="14"
    >
    <p align="right">&nbsp; <FONT size=2>Three months ended June 30, 2008</FONT>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(Loss)</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Depletion</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>earnings</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Expenditures</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>and</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>from</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Total</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>for mining</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>Revenues</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>depreciation</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>operations</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>assets</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>interests</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Brazil</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>19,775</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>5,311</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(7,668</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>213,250</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(2,314</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Chile </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>320,779</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Canada </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>741,515</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Mexico </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>523,084</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Australia</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>19,722</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,324</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,944</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>195,877</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(7,357</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>USA</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Other </FONT><SUP><FONT
      size=2>(1)</FONT></SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>22</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(1,171</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>172,457</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(24</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>39,497</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>7,657</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>(5,895</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    ><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>2,166,962</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>(9,695</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    ><FONT size=2>)</FONT> </TD></TR></TABLE>
</div>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"><SUP><FONT size=2>(1)</FONT></SUP></TD>
    <TD><FONT size=2> Other includes
corporate balances and intercompany eliminations and exploration properties</FONT></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"><SUP><FONT
size=2>(2)</FONT></SUP></TD>
    <TD><FONT size=2>Segments acquired on June 30, 2008 (Note 1)</FONT></TD></TR>
  </TABLE>
<P align=right><FONT size=2>Page 24</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_27></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009<br>
</FONT><FONT size=2>(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<P align=justify><B><FONT size=2>13. </FONT></B></P>
<P align=justify style="margin-left: 5%; margin-top: -25.5pt"><B><FONT size=2>
Segmented information (continued)</FONT></B><FONT size=2> </FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="48%" colspan="14"
    >
    <p align="right">&nbsp; <B><FONT size=2>Six months ended June 30, 2009</FONT></B>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(Loss)</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Depletion</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>earnings</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Expenditures</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>and</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>from</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Total</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>for mining</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>Revenues</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>depreciation</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>operations</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>assets</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>interests</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Brazil</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>16,928</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,936</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(2,414</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>32,833</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(676</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Chile </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(313</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>391,031</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(992</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Canada </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>12</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(13</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>675,015</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(43,933</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Mexico </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>49,185</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>12,239</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>7,232</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>450,208</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(982</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Australia</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>44,128</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>4,386</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>17,732</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>209,471</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(13,608</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>USA </FONT><SUP><FONT size=2>(3)</FONT></SUP>
    </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>10,211</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>1,790</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(191,313</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>415,285</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(167</FONT></TD>
    <TD align=left width="2%" ><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Other </FONT><SUP><FONT
      size=2>(1)</FONT></SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>56</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(15,650</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>183,232</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(201</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>120,452</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>21,419</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>(184,739</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    ><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>2,357,075</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>(60,559</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    ><FONT size=2>)</FONT> </TD></TR></TABLE>
</div>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD>
      &nbsp;</TD></TR>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP><FONT size=2>(1)</FONT></SUP></TD>
    <TD>
      <FONT size=2> Other includes
corporate balances and intercompany eliminations and exploration properties</FONT></TD></TR>

  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP><FONT size=2>(2)</FONT></SUP> </TD>
    <TD>
      <P align=justify><FONT size=2>Segments acquired on June 30, 2008 (Note
      1)</FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP><FONT size=2>(3)</FONT></SUP> </TD>
    <TD>
      <P align=justify><FONT size=2>Segment acquired on June 1, 2009 (Note 4
      (a)) - results from operations for one month
only</FONT></P></TD></TR></TABLE><BR>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="48%" colspan="14"
    >
    <p align="right">&nbsp; <FONT size=2>Six months ended June 30, 2008</FONT>
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>(Loss)</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Depletion</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>earnings</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Expenditures</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>and</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>from</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>Total</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>for mining</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>Revenues</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>depreciation</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>operations</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>assets</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2>interests</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Brazil</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>38,542</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>9,321</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(7,995</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>213,250</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(4,466</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Chile </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>320,779</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Canada </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>741,515</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Mexico </FONT><SUP><FONT
      size=2>(2)</FONT></SUP> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>523,084</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Australia</FONT> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>57,176</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>4,697</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>20,088</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>195,877</FONT> </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>(12,325</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><FONT
      size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>USA</FONT> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>-</FONT> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>Other </FONT><SUP><FONT
      size=2>(1)</FONT></SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>-</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>43</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(4,509</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>172,457</FONT> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2>(26</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff><FONT size=2>)</FONT> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>95,718</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>14,061</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>7,584</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>2,166,962</FONT> </TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="7%"><FONT
      size=2>(16,817</FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    ><FONT size=2>)</FONT> </TD></TR></TABLE>
</div>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"><SUP><FONT size=2>(1)</FONT></SUP></TD>
    <TD><FONT size=2> Other includes
corporate balances and intercompany eliminations and exploration properties</FONT></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"><SUP><FONT
size=2>(2)</FONT></SUP></TD>
    <TD><FONT size=2>Segments acquired on June 30, 2008 (Note 1)</FONT></TD></TR>
  </TABLE>
<P align=right><FONT size=2>Page 25</FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_28></A>
<P align=justify><B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements
June 30, 2009</FONT><FONT size=2><br>
(Tabular amounts expressed in thousands of U.S.
dollars, except share and per share amounts) <br>
(Unaudited) </FONT></P>
<P align=justify><B><FONT size=2>13. </FONT></B></P>
<P align=justify style="margin-left: 5%; margin-top: -25.5pt"><B><FONT size=2>
Segmented information (continued)</FONT></B><BR></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company sells all of its concentrate
production to two customers under an off-take contract. The loss of this
customer or unexpected termination of the off-take contract could have a
material adverse effect on the Company&#146;s results of operations, financial
condition and cash flows.</FONT></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company is not economically dependent on a
limited number of customers for the sale of its gold because gold can be sold
through numerous commodity market traders worldwide. </FONT></P>
<P align=justify style="margin-left: 5%"><FONT size=2>The Company has five customers that account for
over 85% of the concentrate and dor&#233; sales revenue. </FONT></P>
<div align="right">
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="95%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2><I>Metal sales</I> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="23%"
    colSpan=4><FONT size=2>Three months ended June 30, </FONT></TD>
    <TD style="BORDER-BOTTOM: medium none #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="23%"
    colSpan=4><FONT size=2>Six months ended June 30, </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>Customer </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:none; border-top-width:medium" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2>2008 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>$</B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>&nbsp;<B>$</B></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>$</FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>1 </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>2,488</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>19,775 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>16,928</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>38,542 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>2 </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>27,934</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>49,185</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>3 </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>10,638</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>14,031 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>21,625</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>34,025 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>4 </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>7,707</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>5,691 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>19,794</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>23,151 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2>5 </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><FONT size=2><B>6,493</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><FONT size=2><B>6,493</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left><FONT size=2>Total
      </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT
      size=2><B>55,260</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT
      size=2>39,497 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT
      size=2><B>114,025</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"><FONT
      size=2>95,718 </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left
      bgColor=#e6efff><FONT size=2>% of total metal sales </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2><B>89.58%</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>100% </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2><B>94.66%</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=right width="10%"
    bgColor=#e6efff><FONT size=2>100% </FONT></TD>
    <TD style="BORDER-BOTTOM: 2px solid #000000; " align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
</div>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B><FONT size=2>14.</FONT></B> </TD>
    <TD colSpan=2>
      <P align=justify><B><FONT size=2>Commitments and
      contingencies</FONT></B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><FONT size=2>(a)</FONT> </TD>
    <TD>
      <P 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 and operating leases for its
      operations. At June 30, 2009, these commitments totaled $18.6 million and
      are expected to fall due over the next 12 months.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><FONT size=2>(b)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>The Company terminated various employment,
      consulting and service agreements as a result of slowing development
      activities at the New Afton project and placing Amapari on temporary care
      and maintenance. Certain of the affected parties have or may in the future
      make legal claims in response to such terminations. The Company cannot
      reasonably predict the likelihood or outcome of any such actions, but
      would vigorously defend against them.</FONT></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><FONT size=2>(c)</FONT> </TD>
    <TD>
      <P align=justify><FONT size=2>The Company has received notice that legal
      claims in the amount of approximately $38.7 million (76.9 million reals)
      have been filed in Brazilian courts against the Company&#146;s subsidiary,
      Amapari. The claims allege that Amapari 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.</FONT></P></TD></TR></TABLE>
<P align=right><FONT size=2>Page 26</FONT></P>
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<P align="justify">
<B><FONT size=5>New Gold Inc.</FONT></B><FONT size=4><br>
Notes to the consolidated financial statements June 30, 2009<br>
</FONT>
<FONT size=2>(Tabular amounts expressed in thousands of U.S. dollars, except share and per share amounts)
<br>
(Unaudited) </FONT>
</P>
<TABLE BCLLIST style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
<TR>
	<TD width=5% valign=top>
<B><FONT size=2>14.</FONT></B> 	</TD>
	<TD colspan=2>
<P align="justify"><B><FONT size=2>Commitments and contingencies (continued)</FONT></B></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<FONT size=2>(d)</FONT> 	</TD>
	<TD>
<P align="justify"><FONT size=2>Under a term loan facility in connection with the development of the Mesquite mine (Note 9 (c)), the Company&#146;s wholly-owned subsidiary, WMMI, was subject to a completion test by June 30, 2009. The Company failed
the completion test but received an extension with the syndicate to allow an amendment to the facility to be negotiated by September 30, 2009.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD><TD width=5%></TD>	<TD>
<P align="justify"><FONT size=2>In addition, production at the Mesquite Mine was below expected production levels during the second quarter agreed to in the term loan, which is considered a trigger event under the term loan facility. However, the
Company has four months to remediate the trigger event. The Company expects to be in compliance with expected production levels under the agreement during the four month period.</FONT></P>
	</TD>
</TR>
<TR><TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR><TR>
<TD width=5%></TD>	<TD width=5% valign=top>
<FONT size=2>(e)</FONT> 	</TD>
	<TD>
<P align="justify"><FONT size=2>The Company is involved in legal proceedings from time to time, arising in the ordinary course of business. Typically, the amount of the ultimate liability with respect to these actions will not materially affect the
Company&#146;s financial position, results of operations or cash flows.</FONT></P>
	</TD>
</TR>
</TABLE>
<P align="right">
<FONT size=2>Page 27</FONT></P>

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<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exh992.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>

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   <TITLE> New Gold Inc. - Exhibit 99.2 - Prepared by TNT Filings Inc.</TITLE>

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<P align=right><b>Exhibit 99.2</b></P>
<P align=justify><B><font size="3">NEW GOLD INC.<BR>Management&#146;s Discussion and
Analysis<BR></font></B>Six Months Ended June 30, 2009 <BR>(in United States dollars,
except where noted) </P>
<P align=justify><I>This Management&#146;s Discussion and Analysis should be read in
conjunction with New Gold Inc.&#146;s </I><I>unaudited interim consolidated financial
statements for the three and six month periods ended June 30, 2009</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</I><I>-</I><I>looking statements&#148; that are subject to </I><I>risk
factors set out in a cautionary note contained herein. 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</I><I>&#146;s</I><I> Discussion and Analysis has been prepared as of
August 5, 2009. Additional information relating to the Company</I><I>, including
the Company&#146;s Annual Information Form,</I><I> is available on SEDAR at
</I><I><U><FONT color=#0000ff>www.sedar.com</FONT></U></I><I>. </I></P>
<P align=justify><B>Second Quarter Financial / Operation Highlights </B></P>
<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0"><STRONG>Gold production of 55,633 ounces</STRONG>
<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0"><STRONG>Gold sales of 52,890 ounces</STRONG>
<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0"><STRONG>Total cash cost <SUP>(1) </SUP>of $468 per ounce (net
of by-product-sales)</STRONG> <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0"><STRONG>Net loss of $202.8 million or $0.79 per share. The net
loss includes a goodwill impairment charge</STRONG> <B>of $189.6 million, $5.9
million in merger costs, $31.1 million of foreign exchange losses, a
mark-to-market gain of $9.0 million on gold and fuel contracts and
realized and unrealized gain on</B> <B>investments of $9.7 million. After
adjusting in the above, the adjusted net earnings <SUP>(2)
</SUP>after taxes</B> <B>were $10.6 million or $0.04 per share compared
to adjusted net loss of $4.6 million or $0.05 per</B> <B>share in the second
quarter of 2008.</B> <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0"><STRONG>Cash and cash equivalents of $141.1 million</STRONG>
<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0"><STRONG>Closed business combination with Western Goldfields
Inc. (&#147;Western Goldfields&#148;) on June 1, 2009</STRONG> </P>
  </li>
</ul>
<TABLE
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  </TABLE>
<P align=center>1 </P>
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<!--$$/page=--><A name=page_2></A>
<P align=justify><B><I>Background </I></B></P>
<P align=justify>New Gold Inc. (&#147;New Gold&#148;) is an intermediate gold producer
with a portfolio of global assets in Mexico, Canada, Australia, Brazil, Chile
and the United States. The Company's operating assets consist of the Cerro San
Pedro (&#147;CSP&#148;) gold-silver mine in Mexico, the Peak gold-copper mine (&#147;Peak
Mines&#148;) in Australia and the Western Mesquite gold mine (&#147;WMM&#148;) in the United
States. Significant development projects include the New Afton copper-gold
project in Canada (&#147;New Afton&#148;) and a 30% interest in the El Morro
copper-gold project in Chile (&#147;El Morro&#148;). New Gold has a vision of becoming a
million ounce gold producer, with a lower than industry average total cash cost
per ounce, by 2012. New Gold will achieve this vision through:</P>
<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Delivering on operational targets (safety, cost, production and
environment and social responsibility); <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Maintaining a strong financial position;<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Internal growth through project development and the continuous
improvement of our existing operations; and <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">External growth through the continued consolidation of junior
gold producers. </P>
  </li>
</ul>
<P align=justify>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. </P>
<P align=justify><B><I>Corporate Developments </I></B></P>
<P align=justify><B><I>Business Combination with Western Goldfields </I></B></P>
<P align=justify>During the second quarter, the Company completed a business
combination (the &#147;Business Combination&#148;) with Western Goldfields Inc. (&#147;Western Goldfields&#148;). The Business
Combination was completed by way of a plan of arrangement ("Plan of
Arrangement") that was approved by the New Gold and Western Goldfields
shareholders on May 13 and 14, 2009, respectively, and which received final
court approval on May 27, 2009. The acquisition date was determined to be May
27, 2009. </P>
<P align=justify>Pursuant to the Plan of Arrangement, New Gold acquired all of
the issued and outstanding common shares of Western Goldfields in consideration
for the issuance by New Gold of one common share of New Gold and Cdn$0.0001 for
each Western Goldfields common share outstanding. All of the stock options of
Western Goldfields outstanding at the effective time of the arrangement were
replaced by options to purchase common shares of New Gold. All outstanding
warrants to acquire common shares of Western Goldfields will, pursuant to their
terms, be exercisable for common shares of New Gold and the nominal cash
consideration. </P>
<P align=justify>The closing of this transaction represents another significant
step for New Gold as the Company continues to deliver on its growth strategy and
continue to focus on growth by enhancing our operations, continuing the
development of New Afton and pursuing strategic acquisition opportunities. </P>
<P align=center>2 </P>
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<P align=justify><B><I>Goodwill Impairment Charge </I></B></P>
<P align=justify>On March 4, 2009, the Company announced that it had entered
into an agreement to acquire Western Goldfields. The share price on March 4th,
2009 was $1.61 (Cdn$2.05) and the terms of the agreement whereby the Company
exchanged one common share of New Gold and CDN$0.0001 in cash for each common
share of Western Goldfields were determined with this share price as reference.
At the time the agreement was finalized, the Company had not yet made the
decision to early adopt CICA Handbook Section 1582 which requires that the
measurement date for equity instruments exchanged in a business combination is
the date of acquisition and not the average of a few days before and after the
terms were agreed to and announced.</P>
<P align=justify>In preparing its first quarter consolidated financial
statements, the Company elected to early adopt Section 1582 and the acquisition
date was determined to be May 27, 2009, the date the court approved the Business
Combination. On May 27th, 2009, the share price was $2.63 (Cdn$2.92) which
resulted in additional purchase consideration of $138.1 million than would not
have been recorded under the guidance of CICA Handbook Section 1581. As a
result, the Company recorded approximately $189 million in goodwill for the
Business Combination with Western Goldfields. </P>
<P align=justify>The Company allocated its goodwill to the Mesquite mine as it
was the only reporting unit acquired pursuant to the Western Goldfields Business
Combination. The net asset value of the Mesquite mine consist of plant and
equipment and mining properties. Plant and equipment were valued using an
independent third party valuator. Mining Properties were valued using the
discounted cash flow of proven and probable reserves, measured, indicated and
inferred resources. In addition the company valued the sulphide potential using
prices paid for similar market transactions.</P>
<P align=justify>The Company has determined that it cannot support the carrying
value of this goodwill as at June 30, 2009 and recorded a goodwill impairment
charge of $189.6 million due mainly to $138.1 million in additional purchase
consideration as a result of the share price difference from the date of the
announcement on March 4th, 2009 of $1.61 to the share price on the date of
acquisition on May 27, 2009 of $2.63, following the adoption of a new accounting
policy. </P>
<P align=center>3 </P>
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<P align=justify><B><I>Selected Quarterly Financial Information <BR></I></B>(US
dollars in thousands, except per share amounts and per ounce amounts) </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q2</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q1</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q4</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q3</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q2</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q1</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q4</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q3</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <FONT style="font-size: 9pt"><B>Operating Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2009 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B><SUP><font style="font-size: 9pt">(4)</font></SUP></B><font style="font-size: 9pt">
    </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008 </B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    ><B><SUP><font style="font-size: 9pt">(1)</font></SUP></B><font style="font-size: 9pt">
    </font> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2007</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2007</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Gold (ounces) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&#150; Produced </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>55,633</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">54,938 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">78,950 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">68,801 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">42,052 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">43,300 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">53,430 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">53,900 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Sold </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>52,890</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">55,397 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">78,194 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">67,156 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">40,540 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">51,700 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">52,351 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">55,000 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Copper (000's pounds) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Produced </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>4,266</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">3,812 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,474 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,365 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,237 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,172 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,746 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,932 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&#150; Sold </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>2,568</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,751 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,634 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,715 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">855 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,551 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,469 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,908 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Silver (ounces) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&#150; Produced </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>414,038</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">427,439 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">290,520 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">282,055 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Sold </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>422,713</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">372,219 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">289,781 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">305,430 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Average realized prices </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Gold ($/ ounce) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>926</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">898 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">792 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">870 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">898 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">933 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">793 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">697 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&#150; Copper ($/ pound) </FONT></TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>2.07</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1.70 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1.32 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2.76 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">4.27 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">3.75 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2.99 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">3.47 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Silver ($/ ounce) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>13.84</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">12.54 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">10.09 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">15.24 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">N/A </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Total cash cost per gold ounce sold <SUP>(2)</SUP> </FONT></TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>468</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">513 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">576 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">566 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">742 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">427 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">398 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">303 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <FONT style="font-size: 9pt"><B>Financial Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Revenues </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>61,687</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">58,765 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">59,033 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">63,384 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">39,497 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">56,221 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">46,979 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">44,663 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Depreciation and depletion </FONT></TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>10,654</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">10,749 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">9,234 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">9,666 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">7,657 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">6,404 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">3,766 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">13,258 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Corporate administration <SUP>(3)</SUP> </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>5,727</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">4,066 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">7,472 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">8,334 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">3,196 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">4,027 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">5,122 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,814 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Business combination </FONT></TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>5,899</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">684 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Earnings (loss) from operations
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><STRONG>
    <FONT style="font-size: 9pt">$</FONT></STRONG><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>(190,791</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B><font style="font-size: 9pt">)</font></B><font style="font-size: 9pt">
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">6,052 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">(21,287</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><font style="font-size: 9pt">)
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">(167,588</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><font style="font-size: 9pt">)
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">(5,895</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><font style="font-size: 9pt">)
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">13,479 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">13,090 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,612 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Interest and other income </FONT></TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>1,810</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">266 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">924 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,123 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,355 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,967 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,198 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,250 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Net earnings (loss) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><STRONG>
    <FONT style="font-size: 9pt">$</FONT></STRONG><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>(202,846</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B><font style="font-size: 9pt">)</font></B><font style="font-size: 9pt">
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">12,079 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">41,135 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">(148,852</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><font style="font-size: 9pt">)
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">(4,751</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><font style="font-size: 9pt">)
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">9,790 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">14,789 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,180 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Earnings (loss) per share </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%">&nbsp;</TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Basic and diluted </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><STRONG>
    <FONT style="font-size: 9pt">$</FONT></STRONG><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>(0.79</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B><font style="font-size: 9pt">)</font></B><font style="font-size: 9pt">
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.06 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.19 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">(0.70</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><font style="font-size: 9pt">)
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">(0.05</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><font style="font-size: 9pt">)
    </font> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.13 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.20 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Cash flow from (used by)
      operating activities </FONT></TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>16,535</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">7,721 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">19,737 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">(10,459</FONT></TD>
    <TD align=left width="2%" ><font style="font-size: 9pt">) </font> </TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT><font style="font-size: 9pt">&nbsp;</font></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">(2,987</FONT></TD>
    <TD align=left width="2%" ><font style="font-size: 9pt">) </font> </TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">18,394 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">12,944 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">7,823 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Cash and cash equivalents </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>141,088</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">136,610 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">185,668 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">251,131 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">319,179 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">197,636 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">149,924 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">77,111 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Investments </FONT></TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>76,574</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">70,210 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">77,016 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">87,645 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">91,193 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">32,440 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">nil </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Total assets </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>2,357,075</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,924,400
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,957,701
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,979,246
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,166,962
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">590,691 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">572,398 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">456,912 </FONT></TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>Results for CSP and New Afton are included for the period
      of June 30, 2008 to June 30, 2009.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>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 CSP is net of by-product silver
      sales revenue.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>Corporate administration includes stock-based
      compensation (a non-cash item).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>On June 1, 2009 the Company closed the Business
      Combination with Western Goldfields. The second quarter of 2009 includes
      one month of operations for the Western Mesquite
mine.</P></TD></TR></TABLE>
<P align=center>4 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_5></A>
<P align=justify><B><I>Overview of the second quarter 2009 financial
results</I></B><B><I> </I></B></P>
<P align=justify><B>Q2 2009 compared to Q2 2008 </B></P>
<P align=justify>Net loss for the second quarter of 2009 was $202.8 million or
$0.79 per share compared to a net loss of $4.8 million or $0.05 per share in the
comparable period last year. The increase in the net loss is mainly attributable
to the goodwill impairment charge of $189.6 million, $5.9 million in business
combination expenses costs associated with the Business Combination with Western
Goldfields, an increase in corporate administration costs of $1.4 million (net
of stock based compensation) and a foreign exchange loss of $31.1 million. The
loss for the second quarter was partially offset by realized and unrealized
gains of $9.0 million on gold and fuel contracts and $9.7 million on investments
in Asset Backed Notes (&#147;AB Notes&#148;). Net earnings were also impacted by the
inclusion of CSP operations in the second quarter of 2009 compared to the second
quarter 2008, the inclusion of the Western Goldfields operations for one month
and the decision to place Amapari on care and maintenance in January 2009.</P>
<P align=justify>Adjusted net earnings <SUP>(2)</SUP> for the second quarter of
2009 was $10.6 million or $0.04 per share compared to an adjusted net loss of
$4.7 million or $0.02 per share in the second quarter of 2008. Adjusted net
earnings <SUP>(2) </SUP>included the following adjustments: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><B>Q2
      2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"><B>Q2
      2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>(Loss) earnings from operations </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(202.9</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(4.8</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left>Loss on foreign exchange </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">31.1 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">0.1 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Business combination transaction costs </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>5.9 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Realized and unrealized gain on gold and fuel contracts </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(9.0</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Realized and unrealized gains on
      investments </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(9.7</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Goodwill
      impairment charge </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">189.6
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="12%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Adjusted net earnings (loss) before tax </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;5.0 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;(4.7</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Tax effect </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">5.6
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Adjusted net earnings (loss) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;10.6 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(4.7</TD>
    <TD align=left width="2%"  bgColor=#e6efff>)
</TD></TR></TABLE>
<P align=justify>Total cash cost<SUP> (1)</SUP> per ounce was $468 for the
second quarter of 2009 compared to $742 per ounce in the second quarter of 2008.
The decrease of $274 per ounce is mainly due to decreased operating cost per
ounce at Peak ($364 per ounce vs. $472 per ounce), increased by-product revenues
of $1.5 million from Peak copper sales, the inclusion of CSP and WMM operations
in the second quarter of 2009 and the decision to cease heap leach operations at
Amapari in the first quarter of 2009. The weakening of the currencies of Mexico
and Australia against the US dollar was also contributing factors.</P>
<P align=center>5 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_6></A>
<P align=justify><B>Q2 2009 compared to Q1 2009 </B></P>
<P align=justify>Quarter over quarter, net earnings was $214.9 million lower in
Q2 relative to the comparable Q1 period. The decrease in earnings for the second
quarter was mainly due to the goodwill impairment charge of $189.6, a $29.1
million increase in foreign exchange losses, partially offset by a $9.7 million
increase in gains related to investments, $9.0 million gain on gold and fuel
contracts. The first quarter of 2009 included a gain of $14.2 million gain of
the redemption of long-term debt versus a nil gain or loss in the second quarter
of 2009. The second quarter of 2009 also included $5.9 million in business in
combination expenses compared to $0.7 million in the first quarter of 2009.
Corporate administration costs in Q2 2009 were $4.1 million (Q1 2009: $2.7
million) not including stock based compensation.</P>
<P align=justify>In the second quarter of 2009, the Company had a cash cost of
$468 per gold ounce sold (Q1 2009: $513). The $45 decrease is primarily due to
higher copper and silver revenues which led to higher by-product credits, and
higher grades and recoveries at Peak Mines and a lower strip ratio and lower
consumable costs at CSP, partially offset by lower gold ounces sold. By-product
metal prices increased quarter over quarter: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2><B>Average realized prices</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>Q2 2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>Q1 2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>change</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>%</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp;Copper ($/ pound)
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>2.07</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>1.70</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>0.37</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>21.8</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;Silver ($/ ounce) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>13.84</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>12.54</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>1.30</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>10.4</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR></TABLE>
<P align=justify><B>Six months ended June 30, 2009 compared to six months ended
June 30, 2008 </B></P>
<P align=justify>Consolidated net loss was $190.8 million in the first six
months of 2009, representing a $195.8 million reduction over the Company's
consolidated net earnings of $5.0 million in the first half of 2008. The
decrease is largely attributable to the impairment charge of $189.6, a $31.9
million increase in foreign exchange loss, $6.6 million in business combination
expenses, an increase of $2.8 million in income and mining taxes and lower metal
prices, partially offset by gains on investments and gold and fuel contracts of
$18.7 million ($9.0 million on gold and fuel contracts, $9.7 million on
investments mostly related to AB Notes), $14. 2 million gain on the buy-back of
a portion of Senior Secured notes, the inclusion of the operations of CSP,
increased sales, and lower costs of production. Changes in units sold and metal
prices are summarized below: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="36%" colSpan=7><FONT size=2><B>Six months ended
      June</B> </FONT><FONT size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>Change</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"><FONT
      size=2><B>%</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2><B>Metal sold</B> </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;Gold (ounces) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>108,287 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>92,240 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>16,047 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>17.4</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp;Copper (pounds)
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>5,319 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>3,406 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>1,913 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2><B>56.2</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;Silver (ounces) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>794,932 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>- </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>794,932 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2><B>Average realized prices</B> </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp;Gold ($/ ounce)
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>912 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>919 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>(6</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT
    size=2><B>(0.7</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp;Copper ($/ pound) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>1.88 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>3.98 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2>(2.20</FONT></TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><FONT size=2><B>(55.3</B></FONT></TD>
    <TD align=left width="2%" ><B>)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&nbsp;Silver ($/ ounce)
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>13.23 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>- </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff><FONT size=2>13.23 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=center>6 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_7></A>
<P align=justify>Adjusted net earnings <SUP>(2)</SUP> for the first half of 2009
were $7.6 million, representing an improvement of $1.0 million or 15.2% in
comparison to the adjusted net earnings of $6.6 million in the same period last
year.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=center width="27%" colSpan=4><B>Six months ended June</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>(Loss) earnings from operations </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;(190.8</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;5.0 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Loss on foreign exchange </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">33.1 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1.2 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Business combination transaction costs </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>6.6 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Gain on redemption of long-term debt </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(14.2</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Realized and unrealized gain on gold and
      fuel contracts </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(9.0</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>- </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Realized and unrealized gains on investments </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(9.7</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">- </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Goodwill impairment charge </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>189.6 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="12%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Adjusted net earnings (loss) before tax </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;5.6 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;6.2 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Tax effect </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>2.0 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>0.4 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Adjusted net earnings (loss) </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;7.6 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;6.6 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR></TABLE>
<P align=justify>When compared to the prior period, revenues in the first six
months of 2009 were higher by $24.7 million or 25.8% . The Company sold 108,287
gold ounces in the first half of 2009, representing a 17.4% increase over sales
of 92,240 gold ounces during the same period in 2008. Total cash cost<SUP> (1)
</SUP>per gold ounce sold for the six months ended June 30, 2009 decreased 13.3%
to $491 compared to $566 per gold ounce in the same period in 2008. This
reduction in cash cost per gold ounce sold is as a result of decreased
production costs and an increase in by-product revenues of $8.8 million due to
the inclusion of the silver revenues at CSP in the first half of 2009. Copper
pounds sold at Peak Mines were significantly higher in the first half of 2009,
offset by a considerable decrease in copper prices of 51.6% .<B><I> </I></B></P>
<P align=center>7 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_8></A>
<P align=justify><B><I>Operation Review <BR></I></B>(US dollars in thousands,
except ounce, per ounce per pound amounts) </P>
<P align=justify><B><I>Peak Mines, Australia </I></B></P>
<P align=justify>The Company's 100% owned Peak Mine gold and copper mining
operation is located in the Cobar Mineral Field near Cobar, New South Wales,
Australia. The Peak Mines property consists of mining and exploration licenses
totalling 845 square kilometres of prospective ground covering the Peak Mines
operation and mineralized extensions. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q2</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q1</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q4</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q3</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q2</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q1</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q4</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>Q3</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <FONT style="font-size: 9pt"><B>Operating Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2007</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">
    <FONT style="font-size: 9pt"><B>2007</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Tonnes of ore milled
</FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>199,917</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>198,612</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">206,681 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">196,633 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">186,326 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">179,087 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">188,933 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">182,835 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Average gold head grade (grams/tonne) </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>3.81</B>
      </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>3.62</B>
      </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">4.60
</FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">4.95
</FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">4.18
</FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">4.96
</FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">5.55
</FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">6.21
</FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Average copper head grade (%)
      </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>1.07%</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>0.99%</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.64% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.67% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.46% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.70% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.59% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">0.65% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Average gold recovery rate (%) </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>91.4%</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>89.2%</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">90.4% </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">85.1% </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">84.2% </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">87.9% </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">86.0% </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">87.0% </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Average copper recovery rate
      (%) </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>90.5%</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>87.6%</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">84.2% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">81.1% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">64.9% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">78.9% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">70.0% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">74.0% </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Gold (ounces) </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Produced </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>22,382</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>20,629</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">27,618 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">26,662 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">21,114 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">25,099 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">29,030 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">31,703 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&#150; Sold </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>17,939</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>20,856</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">28,815 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">24,425 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">18,441 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">31,247 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">29,751 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">32,800 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Copper (thousands of pounds)
      </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&#150; Produced </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>4,266</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>3,812</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,474 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,365 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,237 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,172 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,746 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1,932 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Sold </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>2,568</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>2,751</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,634 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,715 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">855 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,551 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">2,469 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">1,908 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Average realized prices </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="7%"><FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">&#150; Gold ($/ ounce) </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>930</B>
    </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>897</B>
    </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">788 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">878 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">902 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">943 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">799 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">707 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">&#150; Copper ($/ pound) </FONT></TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>2.07</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>1.70</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">1.32 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2.76 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">4.27 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">3.75 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2.99 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">3.47 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Total cash cost per gold ounce sold <SUP>(1)</SUP>
      </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>364</B>
    </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>337</B>
    </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">624 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">560 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">472 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">281 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">258 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">176 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>
    <FONT style="font-size: 9pt"><B>Financial Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%">
    <FONT style="font-size: 9pt">&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT style="font-size: 9pt">Revenues </FONT></TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>21,054</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt"><B>23,074</B>
      </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">16,890 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">21,732 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">19,722 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">37,454 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">29,278 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT style="font-size: 9pt">29,467 </FONT></TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT style="font-size: 9pt">Earnings from operations </FONT></TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>8,564</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt"><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt"><B>9,168</B> </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,489 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">6,018 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">2,944 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">17,144 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">13,416 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%"><FONT style="font-size: 9pt">$</FONT></TD>
    <TD align=right width="7%"><FONT style="font-size: 9pt">6,494 </FONT></TD>
    <TD align=left width="2%">&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>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 June 30, 2009, would be $487 per ounce of gold and $1.53 per pound
      of copper compared to $455 per ounce of gold and $1.72 per pound of copper
      in the previous quarter.</P></TD></TR></TABLE>
<P align=justify><B>Three months ended June 30, 2009 compared to three months
ended June 30, 2008 </B></P>
<P align=justify>Peak Mines produced 22,382 ounces of gold and 4.3 million
pounds of copper during the second quarter of 2009, a 6.0% increase in gold
production and a 244.9% increase in copper production, compared to the same
quarter in 2008. The increase in gold production was due to higher tonnes milled
and higher recovery, partially offset by lower grades due to mining shifting to
zones of higher copper and lower gold content. Mill feed grade was 8.9% lower in
gold grade and 132% higher in copper grade. Mill throughput increased by 7.3% to
199,917 tonnes for the second quarter compared to 186,326 tonnes for the same
quarter in 2008. Underground production has increased to replace New Cobar Open
Pit POX ore as mill feed resulted in improved performance of sulphide ore. </P>
<P align=center>8 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_9></A>
<P align=justify>Revenue for the second quarter in 2009 was higher than in the
same quarter in 2008 mainly due to higher gold realized prices (Q2 2009: $930
per ounce, Q2 2008: $902 per ounce) and lower gold ounces sold. Copper realized
prices decreased by $2.20 per pound to $2.07 per pound from $4.27 in the second
quarter of 2008. </P>
<P align=justify>Total cash cost<SUP> (1) </SUP>per ounce sold in the second
quarter of 2009 was $364 compared to$472 in the corresponding period of 2008.
The decrease is primarily due to higher copper revenues, a more favourable
Australian dollar exchange rate and partially offset by lower gold ounces sold
due to increased inventory attributable to the timing of the concentrate
shipments. Second quarter gold production and total cash cost are consistent
with the 2009 guidance of 90,000 to 100,000 ounces of gold and 13 million to 15
million pounds of copper at a total cash cost <SUP>(1)</SUP> per ounce of gold
sold, net of by-product sales, between $370 and $390.</P>
<P align=justify><B>Six months ended June 30, 2009 compared to six months ended
June 30, 2008 </B></P>
<P align=justify>Gold production was 43,011 ounces in the first half of 2009,
6.9% lower than the 46,213 ounces produced in the first half of 2008. The
decrease in production is due to lower grades (period ended June 2009: 3.72 g/t,
period ended June 2008: 4.56 g/t), partially offset by higher recovery rates
(90.3% versus 86.0 %) and to mining shifting to zones of higher copper content.
Gold sales in ounces for the first half of 2009 were lower by 21.9% due to lower
production and higher inventories in the first half of 2009 in comparison to the
same period in 2008. </P>
<P align=justify>For the six months ended June 30, 2009, copper production was
8.1 million pounds compared to 3.4 million pounds produced in the same period in
2008. The significant increase in copper production year over year is attributed
to the transition into the Chesney ore body which contains high copper
grades.</P>
<P align=justify>Total cash cost <SUP>(1)</SUP> per ounce of gold sold, net of
by-product sales, for the six months ended June 30, 2009 was $349 compared to
$352 in the same period last year. The decrease in cash cost<SUP>(1)</SUP> is
primarily due to higher copper revenues, and a favourable Australian dollar
exchange rate, which was partially offset by lower gold ounces sold due to an
increased inventory attributable to the timing of concentrate shipments. </P>
<P align=justify><B>Impact of foreign exchange on operations </B></P>
<P align=justify>The Peak Mines operations continue to be impacted by swings in
the valuation of the Australian dollar against the US dollar. Quarter over
quarter the value of the Australian dollar increased by 14% (Q2 2009: $0.76 to
the US dollar, Q1 2009: $0.66 to the US dollar) representing an negative impact
on operating costs of $0.8 million or $43 per gold ounce sold. In comparison to
the second quarter of 2008, the value of the Australian dollar in the second
quarter of 2009 changed to $0.76 from $0.92 or 18%, the equivalent of a positive
impact on operating costs of $1.4 million or $76 per gold ounce sold. On a year
to date basis, the average exchange rate for the Australian dollar changed by
23% (2009: $0.71 to the US dollar, 2008: $.92 to the US dollar). The change in
exchange rates year to date translates to a positive impact on operating cost of
$4.3 million or $111 per gold ounce sold.<B> </B><B></B></P>
<P align=center>9 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_10></A>
<P align=justify><B><I>Operation Review <BR></I></B>(US dollars in thousands,
except ounce and per ounce amounts) </P>
<P align=justify><B><I>Cerro San Pedro, Mexico </I></B></P>
<P align=justify>The Cerro San Pedro Mine is located in the state of San Luis
Potos&#237; in central Mexico, approximately 20 kilometres east of the city of San
Luis Potos&#237;. The project property consists of 52 mining and exploration
concessions totalling 78 square kilometres in the historic Cerro San Pedro
mining district. The current focus of exploration is on the southern half of a 2
plus kilometre San Pedro trend of gold-silver-zinc-lead mineralization that
extends south from beneath the Company's current open pit mine operation. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=center width="67%" colSpan=19><FONT size=2></FONT><FONT
      size=2></FONT><FONT size=2></FONT><FONT size=2><B>Three Months Ended</B>
      </FONT><FONT size=2></FONT><FONT size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q2</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q1</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q4</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q3</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q2</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q1</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q4</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD><FONT size=2>&nbsp; </FONT></TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2><B>Operating Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2007</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Tonnes of ore mined </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>3,074,257</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>2,540,399</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,128,235
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,059,429
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,440,293
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,276,533
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,290,846
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Tonnes of waste removed </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>4,232,530</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>4,385,860</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>4,255,114 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>3,831,513 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>3,074,769 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>3,051,869 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,706,370 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Ratio of waste to ore
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>1.38</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>1.73</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2.00 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>1.86 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>1.26 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>1.34 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>1.18 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Tonnes of ore processed </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>3,074,257</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>2,540,399</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,128,235 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,059,429 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,440,293 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,276,533 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>4,997,000 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Average gold head grade
      </FONT><FONT size=2>(grams/tonne) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>0.46</B>
      </FONT><FONT size=2></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>0.50</B>
      </FONT><FONT size=2></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>0.57 </FONT><FONT
      size=2></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>0.59 </FONT><FONT
      size=2></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>0.64 </FONT><FONT
      size=2></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>0.61 </FONT><FONT
      size=2></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>0.56 </FONT><FONT
      size=2></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Average silver head grade </FONT><FONT
      size=2>(grams/tonne) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>29.58</B> </FONT><FONT
      size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>35.30</B> </FONT><FONT
      size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>33.50 </FONT><FONT
    size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>24.22 </FONT><FONT
    size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>18.88 </FONT><FONT
    size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>20.82 </FONT><FONT
    size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>18.14 </FONT><FONT
    size=2></FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Average gold recovery rate (%)
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>53.5%</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>50.3%</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>54.8% </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>65.0% </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>41.0% </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>41.0% </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>47.9% </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Average silver recovery rate (%) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>14.1%</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>14.9%</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>12.7% </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>18.0% </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>19.0% </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>15.0% </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>22.2% </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Gold (ounces) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&#150; Produced <SUP>(2)</SUP> </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>24,210</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>20,583</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>21,231 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>24,387 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>20,653 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>18,290 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>13,621 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&#150; Sold </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>23,350</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>18,314</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>21,180 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>26,070 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>22,190 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>15,922 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>13,312 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Silver (ounces) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&#150; Produced <SUP>(1)</SUP>
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>414,038</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>427,439</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>290,520 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>282,055 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>283,749 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>228,623 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>194,539 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&#150; Sold </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>422,713</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>372,219</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>289,781 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>305,430 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>300,728 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>203,973 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>187,430 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Realized prices </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&#150; Gold ($/ ounce) </FONT></TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>946</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>906</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>799 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>874 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>897 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>933 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>790 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&#150; Silver ($/ ounce) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>13.84</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>12.54</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>10.09 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>15.24 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>17.13 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>17.62 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>14.21 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Total cash cost per gold ounce </FONT><FONT
      size=2>sold <SUP>(2)</SUP> </FONT></TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>429</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>551</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>522 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>369 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>375 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>496 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>759 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2><B>Financial Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Revenues </FONT></TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>27,934</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>21,251</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>19,846 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>27,439 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>25,050 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>18,477 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>13,172 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>(Loss) Earnings from
      </FONT><FONT size=2>operations <SUP>(3)</SUP> </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>5,300</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>1,234</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>(18,169</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>5,618 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>10,523 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>7,497 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>(3,224</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>)
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>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.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>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 cost at CSP for the three months ended June
      30, 2009, would be $537 per ounce of gold and $7.86 per ounce of
      silver.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>CSP operations are included in New Gold's operating
      results for the period subsequent to June 30, 2008 only. Prior quarter
      information, before New Gold's acquisition of Metallica, is presented for
      information purposes only.</P></TD></TR></TABLE>
<P align=center>10 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_11></A>
<P align=justify><B>Three months ended June 30, 2009 compared to three months
ended June 30, 2008 </B></P>
<P align=justify>Gold production for the second quarter of 2009 increased by
17.2% to 24,210 ounces compared to 20,653 ounces produced in the second quarter
of 2008. The increase in production over the second quarter of 2008 was due to a
higher recovery rate, which is a function of the type of material placed on the
leach pad. Silver production increased during the quarter to 414,038 ounces from
283,749 ounces in the second quarter of 2008. This increase in silver production
can be attributed to the higher silver grades mined during the second quarter of
2009.</P>
<P align=justify>Capital expenditures in the second quarter of 2009 were $0.4
million versus $4.9 million in the second quarter of 2008. As the CSP operation
was still in its ramp up stage in early 2008, initial capital investment was
required. </P>
<P align=justify>Total cash costs in the second quarter of 2009 were $429 per
ounce compared to $375 per ounce in the second quarter of 2008, an increase of
$54 per ounce of gold. This was due to a number of factors including lower
silver prices and higher consumables costs, which were partly offset by the
depreciation in the Mexican peso versus the US dollar. The increase in the
volume of gold and silver sold in the second quarter of 2009 also mitigated the
increase. </P>
<P align=justify>Revenue for the second quarter 2009 was $27.9 million which was
a 11.5% increase compared to the second quarter 2008 revenue of $25.1 million.
The main driver for this increase was increased average realized prices; gold
rose from $897 per ounce in Q2 2008 to $946 per ounce in Q2 2009. However, the
average realized silver price decreased from $17.13 to $13.84 per ounce. In
addition, silver sales volume increased by 121,985 ounces while gold ounces sold
increased from 22,190 in the second quarter of 2008 to 23,350 ounces in the
second quarter of 2009.<B> </B></P>
<P align=justify><B>Six months ended June 30, 2009 compared to six months ended
June 30, 2008 </B></P>
<P align=justify>Gold production for the first half of 2009 increased by 15.0%
to 44,793 ounces compared to 38,943 ounces produced in the first half of 2008.
The increase in production over the first half of 2008 was due to a higher
recovery rate, which is a function of the type of material placed on the leach
pad. Silver production for the first half of 2009 increased by 64.2% to 841,477
ounces compared to 512,372 ounces produced in the first half of 2008. This
increase in silver production can be attributed to the higher silver grades
mined during the first half of 2009.</P>
<P align=justify>Total cash cost <SUP>(1) </SUP>in the first half of 2009 was
$483 per ounce compared to $426 per ounce in the first half of 2008, an increase
of $57 per ounce of gold. The main drivers behind the increase were the fall in
the price of silver and an increase in total cash cost <SUP>(1) </SUP>which was
partly offset by the depreciation in the Mexican Peso versus the US dollar. The
increase in the volume of gold and silver sold in the first half 2009 also
mitigated the increase. </P>
<P align=justify>Capital expenditures in the first half of 2009 were $0.9
million versus $8.1 million in the first half of 2008 due mainly to the CSP
operations being in the ramp up stage in the first half of 2008. </P>
<P align=justify>Revenue for the first half of 2009 was $49.2 million which was
a 13.1% increase compared to the first half of 2008 revenue of $43.5 million.
The main drivers for this increase were increased average realized prices; gold
rose period over period from $912 to $928 per ounce, however, the average
realized silver price decreased from $17.33 to $13.23 per ounce, there was also
an increase of 290,231 ounces in the sales volume of silver. Additionally, there
was an increase in the volume of gold ounces sold from 38,112 in the
first half of 2008 to 41,664 ounces in the first half of 2009. </P>
<P align=center>11 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_12></A>
<P align=justify><B>Impact of foreign exchange on operations </B></P>
<P align=justify>The CSP operations continue to be impacted by swings in the
valuation of the Mexican peso to the US dollar. For the period of ownership, the
change in the value of the peso quarter over quarter is as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><B>Pesos to US</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Quarter</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>dollar</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>Change</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>%</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Q3 2008 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>10.3 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Q4 2008 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">13.0 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">2.7 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">26.2 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Q1 2009 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>14.4 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>1.4 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>10.4 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Q2 2009 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">13.3 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">(0.9</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">(7.1</TD>
    <TD align=left width="2%">) </TD></TR></TABLE>
<P align=justify>In the second quarter of 2009, the value of the peso increased
7.1% in comparison to the first quarter of 2009. The negative foreign exchange
impact on operating costs in the second quarter of 2009 was approximately $0.4
million or the equivalent of $17 per gold ounce sold. </P>
<P align=center>12 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_13></A>
<P align=justify><B><I>Operation Review <BR></I></B>(US dollars in thousands,
except ounce and per ounce amounts) </P>
<P align=justify><B><I>Western Mesquite Mine (WMM), California </I></B></P>
<P align=justify>The WMM is located in Imperial County, California,
approximately 70 kilometres (43 miles) northwest of Yuma, Arizona and 230
kilometres (144 miles) east of San Diego, California. The Mesquite Mining
District lies beneath alluvial pediment deposits at the base of the Chocolate
Mountains.</P>
<P align=justify>The Mesquite Mine originally commenced operations in 1986 and
has, over the last 23 years, been subject to significant exploration with over
6,000 reverse circulation drill holes having been completed during its life.
Recent exploration has been focused on the areas surrounding the three existing
pits: Rainbow, Big Chief and Vista. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>June
      </B><B><SUP>(3</SUP></B></FONT></TD>
    <TD align=left width="2%" ><B><SUP>)</SUP></B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q2</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q1</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q4</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q3</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q2</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Q1 </B></FONT></TD>
    <TD align=left width="2%" ><B><SUP>(1)</SUP></B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><FONT
      size=2><B>Operating Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2009</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>2008</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Tonnes of ore mined (000's)
      </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>949</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>2,216</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,589 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,429 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>2,733 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>1,801 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>1,151 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Tonnes of waste removed(000's) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>2,991</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>11,715</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>10,853 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>10,390 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>10,233 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>10,732 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>10,017 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Ratio of waste to ore
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>3.15</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>5.29</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>4.19 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>4.28 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>3.74 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>5.96 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>8.70 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Tonnes of ore processed (000's) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>949</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>2,216</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,589 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,429 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>2,733 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>1,801 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>1,151 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Average gold head grade
      </FONT><FONT size=2>(grams/tonne) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2><B>0.48</B> </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2><B>0.49</B> </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>0.40 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>0.52 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>0.77 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>1.23 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>0.56 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Average cumulative gold recovery </FONT><FONT
      size=2>rate (%) </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2></FONT><FONT size=2><B>63.20</B>
      </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2></FONT><FONT size=2><B>63.20</B>
      </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2></FONT><FONT size=2>61.50
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2></FONT><FONT size=2>54.90
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2></FONT><FONT size=2>50.20
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2></FONT><FONT size=2>39.00
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2></FONT><FONT size=2>41.40
    </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>Gold (ounces) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="7%" bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>&#150; Produced <SUP>(2)</SUP> </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>9,041</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>26,085</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>33,660 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>28,298 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>42,357 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>28,524 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2>9,146 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&#150; Sold </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>11,601</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>27,338</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>32,715 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>30,625 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>47,535 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>22,760 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>9,960 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Realized prices </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>&#150; Gold ($/ ounce) </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>880</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>854</B>
    </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>867 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>799 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>870 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>894 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>929 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Total cash cost per gold </FONT><FONT
      size=2>ounce sold </FONT></TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>708</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>647</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>573 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>521 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>390 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>548 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>939 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><FONT size=2><B>Financial Data</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="7%"
    bgColor=#e6efff><FONT size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><FONT size=2>Revenues </FONT></TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>10,211</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2><B>$</B></FONT></TD>
    <TD align=right width="7%"><FONT size=2><B>23,341</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>28,369 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>24,471 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>41,353 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>20,347 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" ><FONT size=2>$</FONT></TD>
    <TD align=right width="7%"><FONT size=2>9,256 </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><FONT size=2>(Loss) Earnings from
      </FONT><FONT size=2>operations <SUP>(4)</SUP> </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><STRONG><FONT
      size=2>$</FONT></STRONG>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2><B>(191,313</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><STRONG><FONT
      size=2>$</FONT></STRONG>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2><B>(194,704</B></FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff><B>)</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>4,295 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>4,587 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>18,624 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2>3,517 </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2>$</FONT>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2></FONT><FONT
      size=2>(3,895</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>)
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">1. </TD>
    <TD>
      <P align=justify>Commercial production at Mesquite commenced in the third
      quarter of 2007. The first gold pour from new production occurred on
      January 15, 2008. As such, the comparative analysis will be presented
      using Q1, 2008 data.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">2. </TD>
    <TD>
      <P align=justify>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.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">3. </TD>
    <TD>
      <P align=justify>Western Mesquite operations are included in New Gold's
      operating results for the period subsequent to June 1, 2009 only. Prior
      quarter information is presented for information purposes only.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">4. </TD>
    <TD>
      <P align=justify>Including goodwill impairment charge of $189.6
      million.</P></TD></TR></TABLE>
<P align=center>13 </P>
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<P align=justify><B>June 2009</B></P>
<P align=justify>The Mesquite Mine was acquired pursuant to the business
combination with Western Goldfields on May 27, 2009. The second quarter results
include production and sales during the period of ownership. </P>
<P align=justify>Mesquite produced 9,041 ounces of gold in June 2009 and had
gold sales of 11,601 ounces. Cash cost per gold ounce sold was $708 in June
2009. The focus in June 2009 was on waste removal resulting in lower levels of
ore mined as the revised 2009 mine plan was implemented.</P>
<P align=justify><B>Six months ended June 30, 2009 compared to six months ended
June 30, 2008 </B></P>
<P align=justify>Gold production for the six months ended June 30, 2009 was
59,745 ounces compared to 37,670 ounces produced in the same period in 2008. The
ratio of waste to ore was lower in the first six months of 2009 compared to 2008
(4.7 versus 7.0). In the first six months of 2009 tonnes of ore processed
increased by 1.9 million tonnes to 4.8 million tonnes. This is due to the fact
that Mesquite was in &#147;start-up&#148; mode in the first quarter of 2008. </P>
<P align=justify>Revenue for the six months ended June 30 was $51.7 million
compared to $29.6 million in the same period last year due to increased ounces
sold (60,053 versus 32,720) and partially offset by lower gold realized prices
($861 versus $905) as the Company delivered 33,000 ounces into its gold hedge
program compared to nil in 2008. </P>
<P align=justify>Total cash cost<SUP> (1)</SUP> per ounce of gold sold for the
six months ended June 2009 was $607 compared to $667 in the same period last
year. Total cash costs were higher in the first six months of 2008 as steady
state production was not achieved until the end of the first quarter of 2008.
</P>
<P align=justify>Mining at Mesquite continues to be impacted by equipment
availability, fewer ounces of gold than expected in an area of the Rainbow pit,
and increased consumption of cyanide and lime. The first two issues are in hand,
while the increased reagent consumption is necessary to achieve optimum
recovery. An additional factor is the increased total cash cost<SUP> (1)</SUP>
per gold ounce sold at Mesquite in Q2 2009 due to a one-time charge to convert
the haulage fleet from bias ply tires to radial tires. Mesquite will experience
the operational and cost benefits of the radial tires for the remainder of 2009
and going forward. In order to catch-up on waste stripping and get the mine plan
back on schedule, a mining contractor has been temporarily retained to augment
the Mesquite mining fleet.</P>
<P align=center>14 </P>
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<P align=justify><B><I>Project Development Review</I></B><I> </I></P>
<P align=justify><B><I>Amapari Mine </I></B><B><I>&#150;</I></B><B><I> Amap&#225;, Brazil
</I></B></P>
<P align=justify>The Company's 100% owned Amapari gold mine is located in the
state of Amap&#225;, Brazil approximately 130 kilometres northwest of the city of
Macap&#225;, the state capital. The Amapari property consists of a mining lease and
multiple exploration concessions covering approximately 2,450 square kilometres
of prospective ground centering on the Company's Amapari gold mining operation. </P>
<P align=justify>During the first quarter of 2009 the Company completed a 2,000
metre regional reconnaissance drilling program to assess the mineral potential
of less explored areas within the Company's greater Amapari project property
holdings. This program has been completed and analysis of the results is
in progress. </P>
<P align=justify>Amapari has previously disclosed mineral resources containing a
total of 1.14 million gold ounces in the measured and indicated categories (22.9
million tonnes at 1.54 g/t Au) of which 63% are in sulphides, and 1.04 million
gold ounces in the inferred category (13.7 million tonnes at 2.37 g/t Au) of
which 93% are in sulphides.</P>
<P align=justify>Amapari produced 13,726 ounces of gold during the first half of
2009 and sold 19,021 ounces (Q2 2009: 2,794 ounces, Q1 2009 16,227). Gold
production in Q1 2009 related to ore stacked during Q4 2008 and 16,377 tonnes
stacked in January 2009. Heap leach operations have now ceased at Amapari. </P>
<P align=justify><B><I>Cerro San Pedro Mine </I></B><B><I>&#150;</I></B><B><I> San
Luis Potos&#237;, Mexico </I></B></P>
<P align=justify>During the second quarter of 2009, the Cerro San Pedro Sulphide
drilling program continued with the completion of six holes totalling 3,576
metres to test the resource potential of a zone of sulphide mineralization that
extends from immediately beneath the current open pit mining operation to an
area of historic underground mining located approximately 500 metres to the
southwest. Since the start of drilling during the fourth quarter of 2008, twelve
holes totalling 7,216 metres have been completed under the CSP Sulphide Program.
Based on the positive results returned from these first twelve holes, a second
phase of drilling has been initiated to extend the drilling coverage into the
area of the current open pit. The second phase of drilling will involve the
completion of an additional 15 holes totalling approximately 10,000 metres,
preliminary metallurgical studies and preparation of an updated mineral resource
estimate that includes the sulphide zone mineralization.</P>
<P align=center>15 </P>
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<P align=justify><B><I>Peak Mines </I></B><B><I>&#150;</I></B><B><I> New South Wales,
Australia </I></B></P>
<P align=justify>During the second quarter of 2009 the Company's ongoing mineral
resource development program resulted in the completion of approximately 16,500
metres of diamond drilling to replace mine depletion. This is significantly
greater than the previous quarter due to the need for closer spaced infill
drilling to delineate the Perseverance ore body currently under development.
Elsewhere at Peak, exploration drilling targeting a down plunge extension of the
Jubilee lens located north of New Cobar resulted in the completion of two holes
totalling 1,300 metres. The Company's regional exploration initiative at Peak
likewise continues with surface mapping and sampling of targets identified
previously by a regional scale 3D exploration model of the Cobar Mineral Field,
with many of these targets being confirmed as potential drill targets by
favourable geology and anomalous geochemistry. Also during the second quarter,
the Company increased its property holdings with the addition of a 146 square
kilometre exploration tenement at the Nymagee East area where compilation of
exploration data generated by previous explorers has confirmed the presence of
prospective gold anomalies meriting further exploration.<B><I> </I></B></P>
<P align=justify><B><I>New Afton Project </I></B><B><I>&#150;</I></B><B><I> British
Columbia, Canada </I></B></P>
<P align=justify>The Company's 100% owned New Afton copper-gold development
project is located in Kamloops, British Columbia Canada. The New Afton project
property package consists of the 9 square kilometre Afton mining lease which
centres on the New Afton copper-gold mine currently under development as well as
111 square kilometres of exploration licenses covering multiple mineral
prospects within the historic Iron Mask mining district. </P>
<P align=justify>During the second quarter of 2009 New Afton project activities
included the preparation of a new mineral resource estimate for inclusion in an
updated mineral reserve estimate and life-of-mine plan currently scheduled for
completion during the third quarter.</P>
<P align=justify>Project spend for the first six months of 2009 was $39.2
million (Cdn$46.9 million) including capitalized interest of $9.2 million
(Cdn$10.7) compared to $54.3 million ($Cdn54.7 million) for the first six months
of 2008. For the first six months of 2009 the project remained on the slowed
down construction schedule put in place in late 2008. Project spend for the
first quarter of 2009 was $18.2 million (Cdn$22.4 million) compared to $21.0
million (Cdn$24.5 million) including capitalized interest of $9.2 million
(Cdn$10.7 million) for the second quarter of 2009, due mainly to timing of the
delivery of equipment.</P>
<P align=justify>New Gold's underground development crews advanced underground
headings a total of 424 metres for the second quarter of 2009 compared to the
advance of 195 metres during the first quarter of 2009. Shotcrete support
continued with 678 cubic metres sprayed in the development headings during Q2.
An innovative fibrecrete spraying technique was used to fully line vent raise
VR4 with shotcrete which resulted in a faster, lower cost process. This
completes the support lining for all three ventilation boreholes excavated to
date. </P>
<P align=justify>Construction activities on the surface were completed for
duration of the two year slow down. The Mill Building was structurally completed
during the second quarter. The setting of the Ball Mill shell and trunnions on
its cradle was completed by the end of May. The gear and pinion for the Ball
Mill is slated for delivery later in 2009 and will be fitted after its arrival. Construction activities were
completed to the planned intermediate stop by mid June and construction
documentation was turned over to New Gold from EPCM contractor AMEC. Engineering
is 92% complete and will remain at this level until the construction project
starts up again. Project procurement was 29% complete. Draft Effluent Discharge
permits and Draft Air Emissions permits were received in June and are currently
under review. </P>
<P align=center>16 </P>
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<P align=justify><B><I>El Morro Joint Venture </I></B><B><I>&#150;</I></B><B><I>
Region III, Chile </I></B></P>
<P align=justify>The Company's 30% owned El Morro copper-gold project is located
in Region III, Chile approximately 80 kilometres east of the city of Vallenar.
The project is a development stage project managed under a joint venture
agreement between Xstrata Copper (&#147;Xstrata&#148;), the project operator and owner of
a 70% interest. </P>
<P align=justify>During the second quarter of 2009 El Morro project activities
included the continued monitoring of progress on the Environmental Impact
Statement application submitted in November 2008 and detailed engineering and
design work for the project by Xstrata. It is anticipated that the permit will
be obtained during the first half of 2010, after which development activities
could proceed. </P>
<P align=justify>Total project spend from point of ownership to the end of June
2009 was $2.2 million including $0.5 million in the first quarter of 2009 and
$0.5 million in the second quarter of 2009. </P>
<P align=justify><B><I>Exploration Review </I></B></P>
<P align=justify><B><I>Liberty Bell Project </I></B><B><I>&#150;</I></B><B><I>
Alaska, United States </I></B></P>
<P align=justify>The Company's Liberty Bell gold project is located
approximately 110 kilometres (70 miles) southeast of Fairbanks, Alaska, USA. The
project property consists of 174 state mining claims covering approximately 52
square kilometres (20 square miles) of prospective ground that is held under
three separate option and lease agreements with various underlying claim owners.
</P>
<P align=justify>During the second quarter of 2009 the Company commenced a
reconnaissance drilling program at Liberty Bell to test the potential of
exploration targets identified during 2007 and 2008. Approximately ten holes
totalling 3,000 metres are planned for this initial phase of drilling. </P>
<P align=justify>Total project spend from point of ownership to the end of June
2009 was $0.9 million including $0.3 million in the second quarter of 2009
compared to $0.1 million in the first quarter of 2009. </P>
<P align=center>17 </P>
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<P align=justify><B><I>Review of Financial Results</I></B><B><I> </I></B></P>
<P align=justify><B><I>Three months ended June 30, 2009 compared to the three
months ended June 30, 2008 </I></B></P>
<P align=justify>Net loss of $202.9 million for the three months ended June 30,
2009 was impacted by the following factors: </P>
<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">The company recorded $189.6 million in goodwill for the
Business Combination with Western Goldfield. The Company has determined that it
cannot support the carrying value of the goodwill as at June 30, 2009 and as a
result the Company has recorded a goodwill impairment charge of $189.6 million.
<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Revenues for the second quarter of 2009 were $61.7 million, an
increase of $22.2 million or 56.2% compared to the second quarter of 2008, due
mainly to the inclusion of the CSP and Western Goldfields (one month) operations
and partially offset by the decision to place Amapari on care and maintenance in
the first quarter of 2009. The increase in revenues is attributable to increased
gold ounces sold of 12,350 ounces (Q2 2009: 52,890, Q2 2008: 40,540), an
increase in copper pounds sold, and increased gold prices, partially offset by
reduced copper prices (gold increased $28 per ounce, copper decreased by $2.20
per pound).<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Realized and unrealized gains of $9.0 million on gold and fuel
contracts due mainly to a decrease in the price of gold (May 2009, $975 per
ounce, June 2009: $935 per ounce) and an increase in the price of fuel. The gold
contracts represent a commitment of 5,500 ounces per month for 66 months ending
December 31, 2014. Realized and unrealized gains of $9.7 million on investments
in Asset Backed Notes.<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">An increase of $0.5 million in interest and other income in the
second quarter of 2009 due to interest received on AB Notes. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Operating expenses increased by $4.9 million or 14.6% to $38.1
million (Q2 2008: $33.3 million) due mainly to the inclusion of CSP for a full 3
months and Western Goldfields for one month of production for the second quarter
of 2009. Operating costs of $3.3 million at Amapari were significantly lower
which was attributable to reduced mining as a result of the mine being placed on
care and maintenance in January 2009. Operating expenses were also impacted at
Peak and CSP due to fluctuation in the currencies of Australia and Mexico
against the US dollar. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">In the second quarter of 2009, gold production increased by
32.3% to 55,633 ounces (Q2 2008: 42,052 ounces) and copper production increased
to 4.3 million pounds from 1.2 million pounds in the second quarter of 2008. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Depreciation and depletion was $10.7 million for the quarter
compared to $7.7 million in the same quarter of 2008 due to increased production
and the inclusion of CSP results for 3 months and Western Goldfields results for
1 month. Depreciation and depletion for the second quarter of 2009 was $0.7
million for Amapari, $6.1 million for CSP, $1.8 million for Western Goldfields
and $2.1 million for Peak Mines. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">The second quarter of 2009 included $5.9 million in business
combination expenses compared to nil in the second quarter of 2008.<B><I> <br>
&nbsp;</I></B></P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Overall, corporate administration (net of stock based
compensation) was $4.1 million compared $2.6 in the same period last year due to
increased corporate activities due to the business combination that occurred on
June 30, 2008 and the business combination with Western Goldfields that closed
on June 1, 2009.<B><I> <br>
&nbsp;</I></B></P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Stock-based compensation was $1.6 million for second quarter of
2009 compared to $0.6 million in the same quarter of 2008 as more stock options
were granted.<B><I> </I></B></P>
  </li>
</ul>
<P align=center>18 </P>
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<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Exploration expenses increased to $2.4 million in the second
quarter of 2009 compared to $1.3 million for the same period in 2008, as a
result of continued exploration work at Peak Mines, Amapari and other properties
acquired in the business combination on June 30, 2008. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">The Company recorded a $31.1 million foreign exchange loss
during the second quarter. The majority of the loss is attributable to the
revaluation of other monetary assets and liabilities and future income tax
liabilities recorded on the acquisition of Peak Mines, Metallica and NGI. A
portion of the loss is due to the revaluation of Canadian debt as the Canadian
dollar strengthened by 6.0% in the second quarter of 2009 compared to the first
quarter of 2009. </P>
  </li>
</ul>
<P align=center>19 </P>
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<P align=justify><B><I>Three months ended June 30, 2009 compared to the three
months ended March 31, 2009 </I></B></P>
<P align=justify>For the second quarter of 2009, the company had a net loss of
$202.9 million or $0.79 per share, compared with net earnings of $12.1 million
or $0.06 per share in the first quarter of 2009. Relative to the Q1 period, the
net losses for Q2 were impacted by the following factors: </P>
<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Goodwill impairment charge of $189.6 million.
<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Revenues for the second quarter of 2009 increased by 5.0%
compared to the first quarter of 2009. Revenues in the second quarter of 2009
were impacted by a $28 increase in gold realized prices, a $0.37 increase in
copper prices, a $1.30 increase in silver realized prices, and silver sales
volume increasing by 50,494 ounces or 13.6% offset by a decrease in gold sales
volume of 2,507 ounces or 4.53%. Gold sales were lower at Amapari due to the
ceasing of the heap leach operations, and lower at Peak Mines primarily due to
the mining shifting to zones of higher copper and lower gold contents. Revenues
for the second quarter were also impacted by the inclusion of Western Goldfields
operations for one month of production. Western Goldfields sold 9,041 ounces of
gold in the month of June 2009. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">A $31.1 million foreign exchange loss recorded in the second
quarter of 2009 compared to the $2.0 million foreign exchange loss recorded in
the first quarter of 2009.<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Gains of $8.2 million and $0.8 million, before income taxes, on
the gold and fuel contracts respectively in the second quarter of 2009. Gains
and losses on gold and fuel contracts are related to the Mesquite mine that was
acquired in the business combination with Western Goldfields that closed on June
1, 2009.<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">A gain of $9.7 million on the investments in AB Notes. There
were no similar gains or losses on AB Notes in the first quarter of 2009. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">A gain of $14.2 million on the buy back of a portion of Senior
Secured Notes in the first quarter of 2009. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Interest and other income were higher by $1.5 million in the
second quarter compared to the first quarter due to higher cash balances
attributable to the Business Combination with Western Goldfields and interest
earned on AB Notes. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Operating expenses increased by $2.9 million or 8.3% mainly due
to lower operating costs at Amapari due to ceasing of heap leach operations,
offset by the inclusion of one month's operations at Western Goldfields in the
second quarter of 2009.<B><I> <br>
&nbsp;</I></B></P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">The second quarter of 2009 included $5.9 million in business
combination expenses compared to $0.7 million in the first quarter of 2009.<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Corporate administration costs in the second quarter of 2009
increased by $1.4 million. Most of the increased administration costs are
related to audit fees, investor relations and directors' fees. The balance of
the increase is related to increased corporate activities. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Exploration expenses increased by $0.4 million mainly due to
increased activities at CSP. </P>
  </li>
</ul>
<P align=center>20 </P>
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<P align=justify><B><I>Six months ended June 30, 2009 compared to the six months
ended June 30, 2008 </I></B></P>
<P align=justify>Consolidated net loss was $190.8 million in the first half of
2009, representing a $195.8 million decrease over the Company's net earnings of $5.0 million in the first half of
2008. The decrease in earnings was attributable to the following factors: </P>
<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Goodwill impairment charge of $189.6.
<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Revenues for the first six months of 2009 increased by 25.8% to
$120.5 million (2008: $95.7 million). Gold ounces sold were higher by 16,047
ounces or 17.4% and copper sold increased by 1.9 million pounds or 56.2%. Gold
prices in the first six months of 2009 were consistent with the comparable
period in the prior year while copper decreased by $2.00 per pound. Revenues
were also impacted by the inclusion of CSP operations for six months and the
operations of Western Goldfields for one month in 2009. The addition of CSP and
Western Goldfields were partially offset by lower revenues at Amapari as heap
leach operations have now ceased. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Operating expenses increased by $8.7 million or 13.5% due
mainly to increased production due to the additional operations acquired in the
acquisition of NGI, and Metallica and the Business Combination with Western
Goldfields. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Corporate administration (net of stock based compensation)
increased by $2.8 million to $6.9 million. The majority of the increase arose
due to increased activities as a result the acquisition of Amapari, Peak Mines,
Metallica and NGI and the Business Combination with Western Goldfields that
closed on June 1, 2009. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Business combination costs of $6.6 million in the first half of
2009 compared to nil in the same period last year due to the business
combination with Western Goldfields. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Interest and other income were lower by $1.2 million due to
lower cash balances in the first six months of 2009. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Gain on investments in AB Notes of $9.7 million compared to nil
in the same period last year. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">A gain of $14. 2 million on the buy-back of a portion of Senior
Secured notes in the first half of 2009. There was no comparative gain or loss
in the comparable period in 2008. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Mark to market gains on gold and fuel contracts of $9.0 ($8.2
million on gold, $0.8 million on fuel) related to the Mesquite mine that was
acquired in the business combination that closed June 1, 2009. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">A $33.1 million foreign exchange loss recorded in the first
half of 2009 versus a loss of $1.2 million in the first half of 2008 primarily
due to revaluation of long-term debt. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Exploration expenses increased by $2.2 million mainly due to
the operations at CSP for the first six months in 2009 and increased exploration
at Amapari compared to the first half of 2008.<B><I> </I></B></P>
  </li>
</ul>
<P align=center>21 </P>
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<P align=justify><B><I>Non-GAAP Measure </I></B><B><I>&#150;</I></B><B><I> Total Cash
Cost </I></B><B><I><SUP>(1)</SUP></I></B><B><I> per Gold Ounce Calculation
</I></B></P>
<P align=justify>The Company reports total cash cost<SUP> (1)</SUP> 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'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<SUP> (1)</SUP> per ounce to the
financial statements: </P>
<TABLE
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  <TR vAlign=top>
    <TD align=left 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"><FONT size=2><STRONG>(In thousands of US dollars except for
      ounces</STRONG></FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4 style="border-top-style: solid; border-top-width: 1"><FONT size=2><B>Three months
      ended</B> </FONT></TD>
    <TD align=center width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD align=center width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4 style="border-top-style: solid; border-top-width: 1"><FONT size=2><B>Six months
      ended</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left 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>&nbsp;<STRONG>of gold and total cash cost per ounce)</STRONG>
      </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4 style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2><B>June 30</B>
    </FONT></TD>
    <TD align=center width="2%" style="border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=center width="1%" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=center width="23%" colSpan=4 style="border-bottom-style: solid; border-bottom-width: 1"><FONT size=2><B>June 30</B>
    </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2><B>2009</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2><B>2008</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2><B>2009</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2><B>2008</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1" bgcolor="#E6EFFF"><FONT size=2>Operating expenses per financial statements
      <SUP>(2)</SUP> </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>38,133 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>33,265 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>73,333 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>64,632 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1"><FONT size=2>Treatment and refining charges on concentrate
      sales </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>1,324 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>740 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>3,273 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>2,642 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1" bgcolor="#E6EFFF"><FONT size=2>By-product copper and silver sales </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>(11,555</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >) </TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>(3,832</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >) </TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>(22,545</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >) </TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>(13,707</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1"><FONT size=2>Non-cash adjustments </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>(3,148</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >) </TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>(92</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >) </TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>(888</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >) </TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>(1,358</FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >) </TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1" bgcolor="#E6EFFF"><FONT size=2>Total cash cost </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>24,754 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>30,081 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>53,170 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>52,209 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1"><FONT size=2>Ounces of gold sold </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>52,890 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>40,540 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>108,287 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT size=2>92,240 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-style: solid; border-width: 1" bgcolor="#E6EFFF"><FONT size=2>Total cash cost <SUP>(1) </SUP>per ounce of
      gold </FONT></TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>468 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>742 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>491 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD>
    <TD align=left width="1%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" ><FONT size=2>$</FONT></TD>
    <TD align=right width="10%" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF"><FONT size=2>566 </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6EFFF" >&nbsp;</TD></TR></TABLE>
<P align=justify>(2) Includes $3.3 million in operating costs at Amapari for the
period April 1 to June 30, 2009</P>
<P align=center>22 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_23></A>
<P align=justify><B><I>Liquidity and Capital Resources</I></B></P>
<P align=justify>As of June 30, 2009, the Company held cash and cash equivalents
of $141.1 million, not including $7.5 million of restricted cash related to the
Mesquite mine (December 31, 2008 - $185.7 million). In addition, the Company has
$6.0 million in short-term investments which mature on August 18, 2009 and has
unutilized credit facilities for the Mesquite mine from the combination with
Western Goldfields of $17.7 million. At present management does not anticipate
that there will be further advances under the credit facility. The increase in
cash is attributed to the following key items: </P>
<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Business combination
with Western Goldfields which contributed $20.7 million (excluding restricted
cash) as at June 30, 2009; <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Receipt of $8.0 million
(Cdn$9.4 million) as a return of capital of the $8.1 million (Cdn$9.5 million)
face value Mav3 class 9 AB Notes; which represents 99% of the original principal
invested; <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Project spend at the
New Afton Project for the quarter ended June 30, 2009 of $11.8 million (Cdn$13.8
million), not including interest, compared to $18.2 million (Cdn$22.4 million)
in the first quarter of 2009; <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Interest paid on the
Senior Secured Notes and Convertible Debentures of $9.3 million; <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Interest paid and
principal repaid on the term loan facility of $0.2 million and $4.7 million
respectively; <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Carried funding of $2.3 million, which represents 70% of the
Company's share of El Morro cash calls made during 2009; and <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Strong cash flows from gold and silver sales at the Company's
operating mines. </P>
  </li>
</ul>
<P align=justify>The Company's cash and cash equivalents are invested in highly
liquid, low risk, interest-bearing investments with maturities of 90 days or
less from the original date of acquisition. The surplus corporate funds are only
invested with approved government or bank counter-parties. This does not include
the AB Notes (refer to AB Notes section in <I>Critical Accounting Policies and Estimates</I> for further
discussion). </P>
<P align=justify>As of June 30, 2009, the Company had working capital of $172.0
million (March 31, 2009 - $152.9 million). During the quarter, the Company's
working capital increased by the sources of cash as described above, which was
partially offset by the decrease in accounts receivable at Peak Mines and the
working capital acquired pursuant to the Western Goldfields business
combination. Peak Mines accounts receivable were reduced due to a receipt of
$17.4 million during the second quarter which offset the increase in copper
prices from $1.70 per pound at the end of the first quarter to $2.20 per pound.
</P>
<P align=justify>In the opinion of management, the working capital at June 30,
2009, together with cash flows from operations, are sufficient to support the
Company's normal operating requirements on an ongoing basis. However, taking
into consideration the Company's current cash position, volatile equity markets,
global uncertainty in the capital markets and increasing cost pressures, the
Company is continually reviewing expenditures in order to ensure adequate
liquidity and flexibility to support its growth strategy while maintaining
production levels at its current operations. During the second quarter of 2009,
the Company completed the Business Combination with Western Goldfields, which
will support the Company's growth strategy. At current metal prices, it is
expected that the Company's existing assets coupled with the cash flow from
current operations will be sufficient to cover the construction of the New Afton
project. </P>
<P align=center>23 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
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<!--$$/page=--><A name=page_24></A>
<P align=justify>During the quarter ended June 30, 2009, the Company had
positive operating cash flows of $16.5 million and invested a total of $33.6
million in mining interests, including $0.2 million at Amapari, $8.9 million at
Peak, $0.2 million at CSP, $23.5 million at New Afton, $0.2 at WMM and $0.6
million on other projects. The Company repaid the $4.7 million WMM term loan
facility. </P>
<P align=justify><B><I>Liquidity and Capital Resources Outlook </I></B></P>
<P align=justify>The Company's future profits and cash position are highly
dependent on metal prices, including gold, silver and copper. Copper will become
increasingly important when the New Afton and El Morro projects are completed
post-2011. In addition to these internal growth opportunities, the Company has
other prospective properties which include, but are not limited to, Rio
Figueroa, Cerro San Pedro Deeps, Amapari sulphides, the Abacus joint venture at
New Afton and Liberty Bell in Alaska. Internal growth will focus on New Afton
and El Morro; however there are other potential development properties that may
become high priorities as further exploration and assessment is completed. In
order to supplement this internal growth, the Company will consider expansion
through mergers and acquisitions. </P>
<P align=justify>Capital expenditures for the remaining six months of 2009 are
expected to be approximately $48.4 million with $30.4 million (including
capitalized interest) allocated to the continued development of New Afton, $13.5
million allocated to Peak Mines, $2.4 million to CSP, $1.0 million to Amapari,
$0.1 million to WMM and $1.0 million to other projects.</P>
<P align=justify>Management believes that the Company will need external
financing (which may include acquisitions of cash generating mines, bank
borrowings and future debt and equity offerings) to complete all of its major
development projects. However, these development projects are not likely to
commence full construction until the second half of 2010 at the earliest. The
successful combination with Western Goldfields and current metal prices, it is
expected that the Company's existing assets coupled with the cash flow from
current operations will be sufficient to cover the construction of the New Afton
project. </P>
<P align=justify>Consistently low copper prices in the future may necessitate
the deferral of capital expenditures which may impact future production from
mining operations. In addition, the Company may need external financing to repay
its long-term debt in 2014 and 2017, however a majority of the AB Notes matures
before repayment of the Senior Secured Notes (refer to AB Notes section in
<I>Critical Accounting Policies and Estimates</I> for further discussion on the
value and collectability of AB Notes). These statements are based on the current
financial position of the Company and are subject to change if any acquisitions
or external growth opportunities are realized. </P>
<P align=center>24 </P>
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noShade SIZE=5>
<!--$$/page=--><A name=page_25></A>
<P align=justify>In May 2008, the Company entered into a one year $25.0 million
revolving credit facility, which was secured on the assets of the Metallica
group of companies and was available for general corporate purposes. However, in
May 2009 the Company decided not to renew the facility because there is no
foreseeable need for the monies in the short term. The Company had not drawn on
the facility in 2009. In addition, the Company is in advanced discussions with
the lenders of the term loan facility after not passing the completion test as
at June 30, 2009 but received an extension with the syndicate to allow an
amendment to the facility to be negotiated by September 30, 2009. In addition,
production at the Mesquite Mine was below expected production levels during the
second quarter agreed to in the term loan, which is considered a trigger event under the term loan facility.
However, the Company has four months to remediate the trigger event. The Company
expects to be in compliance with expected production levels under the agreement
during the four month period. </P>
<P align=center>25 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_26></A>
<P align=justify><B><I>Outlook </I></B></P>
<P align=justify>Global growth and economic conditions have improved again in
the second quarter of 2009. However, the general global outlook remains
challenging. The preliminary signs of recovery in the global economy and stock
markets seen during the first quarter of 2009 have continued to support base
metal prices during the second quarter, including copper which has increased
from $1.32 per pound at the end of December 2008 and broadly remained above
$2.00 per pound during the quarter ended June 30, 2009, ending at $2.20 per
pound. In addition, gold and silver prices have increased slightly from March
31, 2009 with closing prices of $917 per ounce and $13.11 per ounce to $928 and
$13.62 respectively, at the end of June 2009. The average gold and silver prices
for the second quarter were $922 and $13.76. Key factors influencing the price
of gold include currency rate fluctuations and the relative strength of the US
dollar, and the supply of and demand for gold and macroeconomic factors such as
the level of interest rates and inflation expectations. As a result of the
significant movement of these factors volatility continues to be high and
forecasting metal prices and demand, particularly base metals such as copper,
has been difficult. However, in light of the recent signs of the strengthening
of the markets management believes that the long term environment and prospects
for our business remain favourable. Western Goldfields has hedged 5,500 ounces
of gold per month at $801 per ounce until the end of 2014 as a condition of the
Western Goldfields' term loan facility. </P>
<P align=justify>These signs of recovery have also supported an improvement in
general corporate credit market conditions during the first half of 2009. In the
current volatile, yet improving, global economic environment the Company intends
to preserve capital and maximize cash balances while maintaining flexibility and
a strong balance sheet. New Gold is committed to maximizing cash balances by
increasing operating cash flow, containing costs, controlling expansion capital
and reviewing strategic alternatives for non-core assets.</P>
<P align=justify>As inflation and general price levels continue to moderate or
even decrease, the Company is experiencing and continues to expect to achieve
lower costs in the areas of consumables, steel, transportation and other
products and services. In addition, New Gold has benefited from and continues to
expect to benefit from recent favourable movements in local currencies (against
the US dollar) where the Company operates, particularly in Canada, Australia and
Mexico. In Australia, the weaker currency effectively serves as a natural hedge
to any future declining copper and other metal prices. We have not hedged metal
prices, except to meet the lenders' requirements related to the WMM term loan
facility and foreign exchange rates. </P>
<P align=justify>New Gold's growth plan is focused on organic and acquisition
led growth and the Company is seeking to maintain flexibility in the current
environment in order to be able to respond to opportunities as they arise, such
as acquisitions, debt buybacks and other transactions. In order to fund its
major development properties, namely El Morro and other projects, the Company
will need external financing. However, the Business Combination with Western
Goldfields will provide strong cash flows from the Mesquite mine. At current
metal prices, it is expected that the Company's existing assets coupled with the
cash flow from current operations will be sufficient to cover the construction
of the New Afton project. Other sources of external financing may include
acquisitions of other cash generating mines, bank borrowings and future debt and
equity offerings. There can be no assurance that financing will be available on
acceptable terms if the current economic environment deteriorates, however these
projects are of a long term nature and short term financing is not required.
</P>
<P align=center>26 </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_27></A>
<P align=justify>For the combined Company, previously announced 2009 guidance
for gold production of 330,000 to 360,000 ounces at a total cash cost
<SUP>(1)</SUP> per ounce of gold sold, net of by-product sales, of $490 to $510,
remains unchanged. For the period of New Gold ownership of WMM, the 2009
guidance of the combined company represents gold production of 270,000 to
300,000 ounces at a total cash cost <SUP>(1) </SUP>per ounce of gold sold, net
of by-product sales, of $470 to $490.</P>
<P align=justify><B><I>Contractual Obligations </I></B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:solid; border-left-width:1; border-top-style:solid; border-top-width:1" align=left><FONT
      size=2>&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-top-style:solid; border-top-width:1" align=center width="47%"
    colSpan=13><FONT size=2></FONT><FONT size=2></FONT><FONT
      size=2><B>Payments due by period</B> </FONT><FONT size=2></FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:solid; border-right-width:1; border-top-style:solid; border-top-width:1" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-left-style: solid; border-left-width: 1"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>Less</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-left-style: solid; border-left-width: 1"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>than 1</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="7%"><FONT size=2>&nbsp; </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>After 5</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:solid; border-left-width:1" align=left><FONT
      size=2><B>Contractual obligations (in 000's US$)</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>Total</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>year</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>1 - 3 years</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>4 - 5 years</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>years</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:solid; border-right-width:1" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff style="border-left-style: solid; border-left-width: 1"><FONT size=2><B>Long-term debt</B>
    </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>272,059</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>21,223</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>42,668</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>0</B>
</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff><FONT
      size=2><B>$</B></FONT></TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>208,168</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-right-style: solid; border-right-width: 1">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-left-style: solid; border-left-width: 1"><FONT size=2><B>Interest payable on long-term debt</B>
      </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>201,117</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>24,263</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>47,436</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>45,505</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>83,913</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff style="border-left-style: solid; border-left-width: 1"><FONT size=2><B>Commitments &amp;
      permits</B> </FONT></TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>22,526</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>18,655</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>3,871</B>
      </FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>0</B>
</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff><FONT size=2><B>0</B>
</FONT></TD>
    <TD align=left width="2%"  bgColor=#e6efff style="border-right-style: solid; border-right-width: 1">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left style="border-left-style: solid; border-left-width: 1"><FONT size=2><B>Asset retirement obligations</B> </FONT></TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>43,296</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>362</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>14,356</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>1,123</B> </FONT></TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="7%"><FONT size=2><B>27,456</B> </FONT></TD>
    <TD align=left width="2%" style="border-right-style: solid; border-right-width: 1" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:solid; border-left-width:1" align=left
      bgColor=#e6efff><FONT size=2><B>Other</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2><B>337</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2><B>215</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2><B>122</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2><B>0</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff><FONT size=2><B>0</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:solid; border-right-width:1" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-left-style:solid; border-left-width:1" align=left><FONT
      size=2><B>Total contractual obligations</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    ><FONT size=2><B>$</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>539,335</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    ><FONT size=2><B>$</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>64,718</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    ><FONT size=2><B>$</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>108,453</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    ><FONT size=2><B>$</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>46,628</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    ><FONT size=2><B>$</B></FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"><FONT
      size=2><B>319,537</B> </FONT></TD>
    <TD style="BORDER-BOTTOM: 1px solid #000000; ; border-right-style:solid; border-right-width:1" align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
<P align=justify><B><I>Long-term Debt </I></B></P>
<P align=justify>The majority of the Company's contractual obligations consist
of long-term debt and interest payable. Long-term debt obligations comprise of
senior secured note, subordinated convertible debentures and Western Goldfields
term loan facility. The senior secured notes (&#147;Notes&#148;), which 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. At
June 30, 2009 the face value of the Notes totalled $160.9 million (Cdn$187.0
million) with remaining interest payable totalling $173.3 (Cdn$201.5 million).
Interest is payable in arrears in equal semi-annual instalments on January 1 and
July 1 each year. Once the New Afton Project is in commercial production the
Company is obliged to offer to repay a face value amount equal to 50.0% of
excess cash flow each year, at the option of the noteholders. The Company also
has the option to prepay the Notes at a premium ranging from 117.0% to 101.0%
(decreasing based on the length of time the Notes are outstanding). These Notes
are secured on the New Afton project assets and do not have recourse to the
other assets of New Gold. </P>
<P align=justify>The Company has 55,000 subordinated convertible debentures that
bear interest at a rate of 5.0% per annum and are convertible by the holders
into common shares of the Company at any time up to June 28, 2014. At June 30,
2009 the aggregate principal of the subordinated convertible debentures was
$47.3 million (Cdn$55.0 million) with remaining interest payable totalling $13.0
million (Cdn$15.1 million). Interest is payable in arrears in equal semi-annual
instalments on January 1 and July 1 each year.</P>
<P align=center>27 </P>
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<P align=justify>As part of the Business Combination, the Company acquired a
term loan facility with a syndicate of banks under which the Company can borrow
up to $105.0 million in connection with the development of the Mesquite mine.
The term of the facility is until December 31, 2012 and comprises a
multiple-draw term loan of which $87.3 million is available as required for the
development of the Mesquite mine; the remainder will be available for up to 12
months after completion for corporate purposes. The facility is secured by all
of the assets of the Company's wholly-owned subsidiary, WMM and a pledge of the
shares of WMM owned by the Company. In addition, until completion, the facility
is guaranteed by the Company. Under the terms of the facility, completion as
defined by the credit agreement must be reached by June 30, 2009. The Company
failed the completion test but received an extension from the syndicate to allow
an amendment to the facility to be negotiated by September 30, 2009. In
addition, production at the Mesquite Mine was below expected production levels
during the second quarter agreed to in the term loan, which is considered a
trigger event under the term loan facility. However, the Company has four months
to remediate the trigger event. The Company expects to be in compliance with
expected production levels under the agreement during the four month period. </P>
<P align=justify>Interest on the term loan is charged at US dollar LIBOR plus
2.2% prior to completion and U.S. dollar LIBOR plus 1.75% after completion.
Completion occurs upon the satisfaction of certain technical and financial
criteria as defined in the credit agreement. As at June 30, 2009, the Company
had drawn $86.3 million less repayments of $22.4 million, under the facility and
incurred interest at an average rate of approximately 2.6% for the period.
Repayment of the project facility is on a semi-annual basis, from December 31,
2008 through December 31, 2012 according to an agreed schedule of percentages of
the loan outstanding on the final day of the availability period. In addition to
the scheduled repayments, mandatory prepayments are required semi-annually based
on excess cash flows from the Mesquite mine. At June 30, 2009, there were excess
cash flows that triggered a prepayment of approximately $3.0 million. This is
expected to be paid in the third quarter. </P>
<P align=justify><B><I>Forward Gold Sales Contracts </I></B></P>
<P align=justify>Under the terms of the term loan facility (as discussed above),
WMM was required, as a condition precedent to drawdown the loan, to enter into a
gold hedging program acceptable to the banking syndicate. As such, at the time
of the agreement, the Company has executed gold forward sales contracts for
429,000 ounces of gold at a price of $801 per ounce. The gold contracts
represented a remaining commitment of 5,500 ounces per month for 66 months with
the last commitment deliverable in December 2014. </P>
<P align=justify>The Company settles these contracts, at the Company's option,
by physical delivery of gold or on a net financial settlement basis. As at June
30, 2009, the Company had remaining gold forward sales contracts for 363,000
ounces of gold at a price of $801 per ounce at a remaining commitment of 5,500
ounces per month for 66 months. Realized gains of $0.7 million were recognized
for the three month period ended June 30, 2009. The remaining contracts were
marked-to-market as at June 30, 2009 using a spot price of gold of $934 per
ounce. The cumulative unrealized loss of $54.5 million has been disclosed as a
liability as at June 30, 2009 and the Company has recorded an unrealized and
realized gain of $8.2 million. </P>
<P align=center>28 </P>
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<P align=justify><B><I>Fuel Contracts </I></B></P>
<P align=justify>The Company entered into fuel hedge contracts that represent a
total commitment of 1.5 million gallons of diesel per year at prices of $1.82
and $2.00 per gallon in 2009 and 2010, respectively. The Company will be
financially settling 126,000 gallons of diesel per month. </P>
<P align=justify>The contracts were marked-to-market as at June 30, 2009. As at
June 30, 2009, the Company had a remaining commitment of 4.5 million gallons of
diesel for 18 months. The cumulative unrealized gain of $0.8 million has been
disclosed as an asset on the balance sheet as at June 30, 2009.</P>
<P align=justify><B><I>Commitments </I></B></P>
<P align=justify>The Company has entered into a number of contractual
commitments related to equipment to purchase long lead items or critical pieces
of mining equipment related to the New Afton Project. At June 30, 2009, these
commitments totalled $6.7 million and are expected to fall due over the next 12
months.</P>
<P align=justify>In addition to the above, 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 at its operating mines. At June 30,
2009, these commitments totalled $11.9 million and are expected to be paid over
the next 12 months. </P>
<P align=justify><B><I>Contingencies </I></B></P>
<P align=justify>The Company terminated various employment, consulting and
service agreements as a result of slowing development activities at the New
Afton project and placing Amapari on temporary care and maintenance. Certain of
the affected parties may make legal claims in response to such terminations, but
to date no such claims have been commenced. The Company cannot reasonably
predict the likelihood or outcome of any such actions, but would vigorously
defend against them.<B><I> </I></B></P>
<P align=justify>The Company has received notice that legal claims in the amount
of approximately $38.7 million (76.9 million reals) have been filed in Brazilian
courts against the Company's subsidiary, Minera&#231;&#227;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.
</P>
<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,
including challenges related to its Environmental Impact Statement at Cerro San
Pedro Mine. The Company cannot reasonably predict the likelihood or outcome of
these actions. 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 therein, will have a material effect on the
financial condition or future results of operations. </P>
<P align=center>29 </P>
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<P align=justify>In assessing the loss contingencies related to legal
proceedings that are pending against the Company or unasserted claims that may
result in such proceeding, the Company and its legal counsel evaluate the
perceived merits of any legal proceedings or unasserted claims as well as the
perceived merits of the amount of relief sought or expected to be sought. If the
assessment of a contingency suggests that a loss is probable, and the amount can
easily be estimated, then a loss is recorded. When a contingent loss is not
probable but it reasonably possible, or is probable but the amount of the loss
cannot be reliably estimated, then details of the contingent loss are disclosed.
Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the Company discloses the nature of the
quantities. Legal fees incurred in connection with pending legal proceedings are
expensed as incurred. </P>
<P align=justify><B><I>Off-Balance Sheet Transactions </I></B></P>
<P align=justify>The Company has no off-balance sheet arrangements.</P>
<P align=justify><B><I>Outstanding Shares </I></B></P>
<P align=justify>As of July 31, 2009, there were 356,232,033 common shares of
the Company outstanding. The Company had 18,248,335 stock options outstanding
under its share option plan. In addition, the Company had 66,192,212 common
share purchase warrants outstanding. </P>
<P align=center>30 </P>
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<A name="page_31"></A>

<P align="justify">
<B><I>Accounting Policies implemented effective January 1, 2009 </I></B></P>
<P align="justify">
Effective January 1, 2009, the Company adopted 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.
Concurrent with the introduction of this standard, the CICA withdrew EIC 27, Revenues and Expenditures in the Pre-operating Period (&#147;EIC 27&#148;). The adoption of Section 3064 did not have a material impact on the
Company's consolidated
financial position and results of operations for the period ended June
30, 2009.</P>
<P align="justify">
Effective January 1, 2009, the Company adopted CICA Handbook Sections 1582, Business Combinations, (&#147;Section 1582&#148;), 1601, Consolidated Financial Statements, (&#147;Section 1601&#148;) and 1602, Non-controlling Interests, (&#147;Section
1602&#148;) which replaces CICA Handbook Sections 1581, Business Combinations, and 1600, Consolidated Financial Statements. Section 1582 establishes standards for the accounting for business combinations that is equivalent to the business
combination accounting standard under International Financial Reporting Standards (&#147;IFRS&#148;). Section 1582 is applicable for the
Company's business combinations with acquisition dates on or after January 1, 2009. Section 1601 together with
Section 1602 establishes standards for the preparation of consolidated financial statements. Section 1601 is applicable for the
Company's interim and annual consolidated financial statements for its fiscal year beginning January 1, 2009.</P>
<P align="justify">
The adoption of these standards had a significant impact on how the Company accounted for the business combination with Western Goldfields. The impact was as follows: </P>
<ul>
  <li>
<P align="justify" style="margin-top: 0; margin-bottom: 0">
 Transaction costs were not capitalized as part of the purchase consideration and instead were expensed as incurred. As a result of this, the Company has expensed approximately &#36;6.6 million transaction costs for six months ended June 30, 2009.
 <br>
&nbsp;</P>
  </li>
  <li>
<P align="justify" style="margin-top: 0; margin-bottom: 0">
 Measurement date for equity instruments issued by the Company was at the date of acquisition (May 27, 2009) and not at the average of a few days before and after the terms were agreed to and announced (March 4, 2009).
This resulted in using a share price of &#36;2.63 versus a share price of &#36;1.73. This resulted in an increase in the purchase consideration for the Business Combination of &#36;138.1 million, resulting in increased goodwill being recorded on the
balance sheet. </P>
  </li>
</ul>
<P align="justify">
<B><I>Critical Accounting Policies and Estimates</I></B> </P>
<P align="justify">
In preparing financial statements, management has to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Based on historical experience, current market conditions and expert advice,
management makes assumptions that are believed to be reasonable under the circumstances. These estimates and assumptions form the basis for judgments about the carrying value of assets and liabilities and reported amounts for revenues and expenses.
The Company'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 critical accounting policies that are subject to
estimates and assumptions regarding reserves, recoveries, future metal prices and future 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. </P>
<P align="center">
31 </P>

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<P align=justify><B><I>Asset Backed Notes (AB Notes) </I></B></P>
<P align=justify>The Company owns Cdn$160 million of face value of long-term
asset backed notes. These AB Notes were issued as replacement of asset backed
commercial paper (&#147;ABCP&#148;) formerly held by the Company. When the ABCP matured
but was not redeemed in 2007, it became the subject of a restructuring process
that replaced the ABCP with long-term asset backed securities. The restructuring
was completed and the AB Notes were issued on January 21, 2009. </P>
<P align=justify>The Company has estimated the fair value of the New Notes at
June 30, 2009 using the methodology and assumptions outlined below. The fair
value estimate of the New Notes under the restructuring has been calculated
based on information provided by the Pan Canadian Investor Committee, Ernst
&amp; Young, the monitor of the restructuring, and Blackrock, the administrator
of MAV2 and MAV3. </P>
<P align=justify>The Company's valuation methodology entails gathering as many
facts as possible about the New Notes, making assumptions and estimates where
certain facts are unavailable, and then applying its best estimate of
prospective buyers' required yield for investing in such notes. These figures
are then used to calculate 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. In several cases, the
Company has been able to identify the net asset value of the assets supporting
certain of its notes and has factored these values into its analysis. </P>
<P align=justify>The fair market value of the AB Notes has been impacted by a
number of factors as follows:</P>
<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">There has been an improvement in general corporate credit
market conditions over this time period. This decrease in credit risk impacts
the intrinsic value of the AB Notes due to a general lowering of default risk -
albeit a decline from historically high levels - and a decrease in the
likelihood that credit risk limits built into the AB Notes will be exceeded
(specifically, the spread-based margin triggers). Accordingly, the required
yield on the AB Notes has been reduced to reflect easing in the credit markets.
<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">The simple passage of time. As with all debt instruments, the
value of these AB Notes will approach par as the date of maturity approaches and
assuming that they do not default. The reduction in the time-to-maturity is a
factor that increases the fair market value of the AB Notes this period.<br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">There were two defaults in the pool of assets underlying the AB
'pooled' notes. Two credit derivative trades that had Canadian Imperial Bank of
Commerce as the counterparty were included in the pool but were not subject to
the moratorium on margin calls and were also not supported by the margin
facility. These trades failed to meet a required margin call and were
subsequently terminated on March 13, 2009 with a 100% loss. This loss translates
into 1.1% of the total value of the AB Notes and is realized within the
most-junior 'C' notes which represent the first 3% of the total pool. Thus, the maximum value that could
be returned to investors upon the maturity of the C notes is 67% of par.</P>
  </li>
</ul>
<P align=center>32 </P>
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<ul>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">The anticipated missed interest payments on the AB Notes. The
interest income on the pool of assets underlying the pooled notes is variable
and mostly based on the prevailing bankers' acceptance rates. This variable
income must first pay the fixed expense of the Margin Funding Facility (&#147;MFF&#148;)
fee before any interest is paid to noteholders. The MFF lenders are the Canadian
banks, some international banks, and the federal government. If there are not
enough funds to pay the MFF fee in any given period, then the shortfall accrues
and is payable in priority in future periods. There will be no interest payments
on the notes until there is a rise in the prevailing interest rates and only
once any accrued MFF fees are repaid. This anticipated near-term lack of income
on the notes has a negative impact on their fair market value. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">In April 2009 the Company received principal repayments in the
amount of Cdn$9.4 million on an AB Note backed by traditional assets. This
represented a return of principal at par for substantially all of the face value
of the note. However, this note was valued at 97% of face value prior to the
repayment; the impact on the remaining portfolio of AB Notes is a re-balancing
towards lower-valued notes and, therefore, a decrease in the weighted average
price of the remaining portfolio.</P>
  </li>
</ul>
<P align=justify>As a result of this analysis, the Company has estimated the
fair market value of its AB Notes investment to be $76.6 million (Cdn$89.0
million) as at June 30, 2009.</P>
<P align=justify>While the Company believes that it has utilized an appropriate
methodology to estimate fair value, given the current state and ongoing
volatility of global credit markets there can be no assurance that management's
estimate of potential recovery as at June 30, 2009 is accurate. Subsequent
adjustments, either materially higher or lower, may be required in future
reporting periods. The Company will continue to aggressively manage the process
to recover the maximum value from the original investments and interest due.
</P>
<P align=justify>The secondary market for the AB Notes is very illiquid with
only a very small number of trades reported that took place at very distressed
sales prices. There is little bidding activity and it is difficult to ascertain
what potential volume could be transacted at those bids. Investors wishing to
sell their AB Notes would have to give up a significant liquidity discount below
the intrinsic value of the notes. It is uncertain if or when a more liquid
secondary market for the AB Notes will develop.<B><I> </I></B></P>
<P align=justify><B><I>Inventories </I></B></P>
<P align=justify>Finished goods, work-in-progress, heap leach ore and stockpile
ore are valued at the lower of average production costs or net realizable value.
</P>
<P align=justify>The Company records the cost of mining ore stacked on its leach
pads and in process at 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 metal contained in the ore
stacked on leach pads, assumptions of the amount of metal stacked that is expected to
be recovered from the leach pads, the amount of metal in these mill circuits and
an assumption of the metal price expected to be realized when the metal 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's earnings and working capital. </P>
<P align=center>33 </P>
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<P align=justify><B><I>Mineral Properties</I></B> </P>
<P align=justify>The Company records mineral property acquisition expenditures
and mine development expenditures at cost. The Company capitalizes
pre-production expenditures net of revenues received until the commencement of
commercial production in accordance with GAAP.</P>
<P align=justify>A significant portion of the Company'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's earnings and net
assets. </P>
<P align=justify>In addition, GAAP requires 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. Based on management's current
view of future metal prices, foreign exchange rates, and cost assumptions, the
carrying value of its projects were not impaired at the end of the current
accounting period.</P>
<P align=justify>For producing properties, this assessment is based on whether
factors are present that may indicate a need for a write-down. 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's earnings and net assets. The Company confirms
that there were no factors present that would indicate a write-down was
necessary at the end of the current accounting period. </P>
<P align=justify><B><I>Goodwill and Impairment Testing </I></B></P>
<P align=justify>The Company's business combinations are accounted for using the
purchase method of accounting whereby assets acquired and liabilities assumed
are recorded at their fair market values as of the date of acquisition and any
excess of the purchase price over such fair value is recorded as goodwill. As of
the date of acquisition, goodwill is allocated to reporting units by determining
estimates of the fair value of each reporting unit and comparing this amount to
the fair value of assets and liabilities in the reporting unit. </P>
<P align=center>34 </P>
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<P align=justify>The Company evaluates, on an annual basis, the carrying amount
of goodwill to determine whether current events and circumstances indicate that
such carrying amount may no longer be recoverable. To accomplish this, the
Company compares the fair value of its reporting units to their 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.</P>
<P align=justify>The Business Combination with Western Goldfields has been
accounted for in accordance with CICA Handbook Section 1582, Business
Combinations. The acquisition date has been determined to be May 27, 2009,
resulting in purchase considerations of approximately $397.2 million and
resulting goodwill of $189.6 million. The Company has determined that it cannot
support the carrying value of the goodwill as at June 30, 2009 and the Company
has recorded a goodwill impairment charge of $189.6 million. <B><I></I></B></P>
<P align=justify><B><I>Reclamation Obligations </I></B></P>
<P align=justify>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 existing 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 initial 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's earnings and net
assets. </P>
<P align=justify><B><I>Future Tax Assets and Liabilities </I></B></P>
<P align=justify>The Company recognizes the future tax benefit related to future
income tax assets and sets 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 forecast cash flows from
operations and the application of existing tax laws in each jurisdiction.</P>
<P align=justify>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 and
materially affect the amount of future income tax liabilities recorded at the
balance sheet date.</P>
<P align=center>35 </P>
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<P align=justify><B><I>Derivative Instruments </I></B></P>
<P align=justify>All derivative financial instruments are classified as held for
trading and are measured at fair value. The fair value of these derivative
instruments is adjusted at each balance sheet date with changes in fair value
recorded in the determination of net income. Fair value estimates for derivative
contracts are based on quoted market prices for comparable contracts and
represent the amount the Company would have received from, or paid to, a
counterparty to unwind the contract at the market rates in effect at the balance
sheet date. </P>
<P align=justify><B><I>Revenue Recognition </I></B></P>
<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. These types of adjustments can
have a material impact on revenues.</P>
<P align=justify><B><I>Stock-based compensation </I></B></P>
<P align=justify>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'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.</P>
<P align=justify><B><I>Financial Instruments </I></B></P>
<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. The following discussion on risks and risk management includes
some of the required disclosures under the CICA Handbook Section 3862 &#150;
Financial Instruments &#150; Disclosures related to the nature and extent of risks
arising from financial instruments, as required by the standard. The Company is
exposed to a number of risks associated with financial instruments that have the
potential to impact operating and financial performance. The Company's primary
financial instrument risk exposures are liquidity risk, currency risk, commodity
price risk and credit risk. (Refer to the Company's 2008 audited consolidated
financial statements for further information).</P>
<P align=center>36 </P>
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<P align=justify><B><I>International Financial Reporting Standards (IFRS)
</I></B></P>
<P align=justify>In February 2008, the Canadian Accounting Standards Board
(&#147;AcSB&#148;) confirmed January 1, 2011 as the date IFRS will replace current
Canadian generally accepted accounting principles (GAAP) for publicly
accountable enterprises. This will result in the Company reporting under IFRS
starting with the interim period ended March 31, 2011, with restatement for
comparative purposes of amounts reported under Canadian GAAP.</P>
<P align=justify>The conversion to IFRS will likely impact the Company's
statement of financial position and results of operations. To transition to
IFRS, changes may be required to the Company's information technology and data
systems, internal control over financial reporting, disclosure controls and
procedures, financial reporting expertise and training requirements, and
business activities, such as compensation programs, debt covenants and other
contractual arrangements. </P>
<P align=justify>In the second quarter of 2009, the Company completed a
high-level impact assessment to identify key areas that will be affected by the
conversion. A project team has been established to manage the conversion
process, and a detailed IFRS conversion plan has been completed. The detailed
analysis of the IFRS &#150; Canadian GAAP differences, and the selection of
accounting policy choices under IFRS has commenced and is expected to be
completed by the end of fourth quarter 2009. The Company will continuously
monitor changes in IFRS leading up to the changeover date, and will update its
conversion plan as required. </P>
<P align=justify><B><I>Controls and Procedures </I></B></P>
<P align=justify><B><I>Disclosure Controls and Procedures </I></B></P>
<P align=justify>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's Discussion and Analysis, management evaluated the effectiveness of
the Company's disclosure controls and procedures as required by Canadian
securities laws. </P>
<P align=justify>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's annual
filings was appropriately disclosed as such term is defined under National
Instrument 52-109 &#150; Certification of Disclosure in Issuers' Annual and Interim Filings (&#147;NI 52-109&#148;), 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. </P>
<P align=center>37 </P>
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<P align=justify><B><I>Internal Controls and Procedures </I></B></P>
<P align=justify>On May 9, 2008 NGI entered into an agreement to complete a
Business Combination with Metallica and Peak Mines. The transaction was
completed June 30, 2008 wherein the three companies consummated a reverse
merger. Although the &#147;New Gold&#148; name prevailed, Peak Gold Ltd. became the
accounting acquirer. The new management of New Gold, acting reasonably carefully
considered the scope of their evaluation of internal control over financial
reporting (ICFR) taking into consideration guidance in National Instrument
52-109 Certification of Disclosure in Issuers' Annual and Interim Filings when a business is acquired
not more than 365 days before year end. Management concluded that it would be
impractical to complete an evaluation of the design and operational
effectiveness of the controls over the Peak Gold Ltd. business, other than the
controls over the period-end financial close process, as of December 31, 2008.
Accordingly management excluded from its assessment the internal control over
financial reporting concerning the former Peak Gold Ltd. business other than the
controls over the period-end financial close process from their evaluation of
the design and operational effectiveness of ICFR as of December 31, 2008. </P>
<P align=justify>On March 4, 2009, the Company announced that it had entered
into a definitive agreement to acquire all of the outstanding common shares of
Western Goldfields Inc. (&#147;Western Goldfields&#148;). The Business Combination was
completed on June 1, 2009 and New Gold became the accounting acquirer.
Management is currently performing an evaluation of the design and operating
effectiveness of the internal controls and procedures over financial reporting
as defined under NI 52-109 for the Western Goldfields Mesquite Mine business
segment for the year ended December 31, 2009.</P>
<P align=justify>The Company evaluated the design and operational effectiveness
of its internal control and procedures over financial reporting as defined under
NI 52-109 for the year ended December 31, 2008. Based on this evaluation,
management has concluded that the design and operational effectiveness of these
internal controls and procedures over financial reporting are effective. There
has been no change in the Company's design of internal controls and procedures
over financial reporting that has materially affected, as is reasonably likely
to materially affect, the Company's internal control over financial reporting
during the period covered by this Management's Discussion and Analysis.</P>
<P align=center>38 </P>
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<P align=justify><B><I>Limitations on Controls and Procedures </I></B></P>
<P align=justify>The Company's management, including its President and Chief
Executive Officer and Executive Vice President and Chief Financial Officer, believe that any 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 two or more people, or by unauthorized override
control. The design of any system controls is also 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.<B> </B></P>
<P align=center>39 </P>
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<P align=justify><B><I>Footnotes </I></B></P>
<ol style="font-size: 10pt">
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">&#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. 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. 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 and net of by-product sales. Total cash cost is then divided
by ounces sold to arrive at the total cash cost. The measure, along with sales,
is considered to be a key indicator of a Company's ability to generate operating
earnings and cash flow from its mining operations. 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. <br>
&nbsp;</P>
  </li>
  <li>
<P align=justify style="margin-top: 0; margin-bottom: 0">Adjusted net earnings (loss) include the following
adjustments to net earnings (loss): </P>
  </li>
</ol>
<blockquote>
  <ul>
    <li>
<P align=justify>Foreign exchange gains and losses </P>
    </li>
    <li>
<P align=justify>Business combination transaction costs </P>
    </li>
    <li>
<P align=justify>Gains and losses on redemption of long-term debt </P>
    </li>
    <li>
<P align=justify>Realized and unrealized gains and losses on gold and fuel
contracts </P>
    </li>
    <li>
<P align=justify>Realized and unrealized gains and losses on investments </P>
    </li>
    <li>
<P align=justify>Tax impact on above adjustments </P>
    </li>
    <li>
<P align=justify>Goodwill impairment charges </P>
    </li>
  </ul>
</blockquote>
<P align=center>40 </P>
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<P align=justify><B>CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
</B></P>
<P align=justify><I>This </I><I>Management&#146;s</I><I> </I><I>Discussion and
Analysis contains &#147;forward</I><I>- </I><I>looking statements&#148;, within the
meaning of</I><I> the United States Private Securities Litigation and Reform Act
of 1995 and applicable Canadian Securities legislation. Forward-looking
statements include, but are not limited to, statements with respect to the
future prices of gold, silver and copper, the estimation of mineral reserves and
resources, the realization of mineral reserve estimates, the timing and amount
of estimated future production, costs of production, capital expenditures, costs
and timing of the development of new deposits, success of exploration
activities, permitting time lines, currency exchange rate fluctuations,
requirements for additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, title disputes or
claims and limitations on insurance coverage. Generally, these forward- looking
statements can be identified by the use of forward-looking terminology such as
</I><I>&#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 an</I><I>d phrases or
state that certain </I><I>actions, events or results &#147;may&#148;, &#147;could&#148;,
&#147;would&#148;,</I><I> </I><I>&#147;should&#148;, </I><I></I><I>&#147;might&#148; or &#147;will&#148; or &#147;will be
taken&#148;, &#147;occur&#148; or &#147;be achieved&#148;. Forward</I><I>-looking statements are subject
to known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of the Company to
be materially different from those expressed or implied by such forward-looking
statements, including but not limited to: that The Company and Western
Goldfields will be able to realize the synergies from the business combination
completed June 1, 2009; there may be difficulties in integrating the operations
and personnel of the Company and Western Goldfields; the results of the
preliminary assessment assessing the viability of a new process facility at
Amapari; the Company is subject to significant capital requirements;
fluctuations in the international currency markets and in the rates of exchange
of the currencies of Brazil, 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 Brazil,
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 Company does or may carry on business; the speculative nature of
mineral exploration and development, including the risks of obtaining necessary
licenses and permits; diminishing quantities or grades of reserves; competition;
loss of key employees; additional funding requirements; actual results of
current exploration or reclamation activities; changes in project parameters as
plans continue to be refined accidents; labour disputes; and defective title to
mineral claims or property or contests over claims to mineral properties. 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) </I><I>as well as the &#147;Risks and
Uncertainties&#148;</I><I> included in his document and the section </I><I>entitled
&#147;Risk Factors&#148; in the </I><I>annual information form filed on March 31, 2009 and
management information circular filed April 15, 2009, both available on SEDAR at
www.sedar.com Although the Company has attempted to identify important factors
that would cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not to
be as anticipated, estimated, or intended. There can be no assurance that such
statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements. The
Company does not undertake to update any forward-looking statements contained
herein, except in accordance with applicable securities laws.</I></P>
<P align=center>41 </P>
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<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>
<b><font size="2">
<p align="right">Exhibit 99.3</p>
<p align="center">FORM 52-109F2 </p>
<p align="center">CERTIFICATION OF INTERIM FILINGS </p>
<p align="center">FULL CERTIFICATE </p>
</font></b><font SIZE="2">
<p align="justify">I, <b>Robert Gallagher, Chief Executive Officer of New Gold
Inc.,</b> certify the following: </p>
<i>
<p align="justify">1.</i> </font></p>
<p align="justify" style="margin-left: 5%; margin-top: -25.5pt"><font size="2">
<i><b>Review</b></i>: I have reviewed the interim financial statements and
interim MD&amp;A (together, the &quot;interim filings&quot;) of New Gold Inc. (the &quot;issuer&quot;)
for the interim period ended June 30, 2009. </p>
<i>
<p ALIGN="JUSTIFY">2.</i> </p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25.5pt"><i><b>No
misrepresentations</b></i>: Based on my knowledge, having exercised reasonable
diligence, 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.</font><i><font size="2">
</p>
<p ALIGN="JUSTIFY">3.</font></i><font size="2"> </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25.5pt"><font size="2">
<i><b>Fair presentation</b></i>: Based on my knowledge, having exercised
reasonable diligence, 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 of and for the periods presented in the interim
filings.</font><i><font size="2"> </p>
<p ALIGN="JUSTIFY">4.</font></i><font size="2"> </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25.5pt"><font size="2">
<i><b>Responsibility</b></i>: The issuer&#146;s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(DC&amp;P) and internal control over financial reporting (ICFR), as those terms are
defined in National Instrument 52-109 <i>Certification of Disclosure in Issuers&#146;
Annual and Interim Filings</i>, for the issuer. </p>
<i>
<p ALIGN="JUSTIFY">5.</i> </p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25.5pt"><i><b>Design</b></i>:
Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the
issuer&#146;s other certifying officer(s) and I have, as at the end of the period
covered by the interim filings<i> </p>
</i>
<p ALIGN="justify" style="margin-left: 5%">(a) </p>
<p ALIGN="justify" style="margin-left: 10%; margin-top: -25.5pt">designed DC&amp;P,
or caused it to be designed under our supervision, to provide reasonable
assurance that </p>
<p ALIGN="justify" style="margin-left: 10%">(i) </p>
<p ALIGN="justify" style="margin-left: 15%; margin-top: -25.5pt">material
information relating to the issuer is made known to us by others, particularly
during the period in which the interim filings are being prepared; and </p>
<p ALIGN="justify" style="margin-left: 10%">(ii) </p>
<p ALIGN="justify" style="margin-left: 15%; margin-top: -25.5pt">information
required to be disclosed by the issuer in its annual filings, interim filings or
other reports filed or submitted by it under securities legislation is recorded,
processed, summarized and reported within the time periods specified in
securities legislation; and </p>
<p ALIGN="justify" style="margin-left: 5%">(b) </p>
<p ALIGN="justify" style="margin-left: 10%; margin-top: -25.5pt">designed ICFR,
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. </p>
</font><i><font SIZE="2">
<p ALIGN="JUSTIFY">5.1 </p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25.5pt"><b>Control
framework:</b></font></i><font SIZE="2"> The control framework the issuer&#146;s
other certifying officer(s) and I used to design the issuer&#146;s ICFR is <i>
Internal Control</i><b> &#150; </b><i>Integrated Framework</i> published by the
Committee of Sponsoring Organizations of the Treadway Commission. </p>
</font><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5><i><font SIZE="2">
<p align="justify">5.2<b> </b></p>
<p align="justify" style="margin-left: 5%; margin-top: -25.5pt"><b>ICFR</b></font></i><font SIZE="2">
<b>&#150; material weakness relating to design</b>: N/A </font></p>
<i><font SIZE="2">
<p align="justify">5.3 </p>
<p align="justify" style="margin-left: 5%; margin-top: -25.5pt"><b>Limitation on
scope of design</b></font></i><font SIZE="2">: N/A </font></p>
<font SIZE="2"><i>
<p align="justify">6.</i> </p>
<p align="justify" style="margin-left: 5%; margin-top: -25.5pt"><i><b>Reporting
changes in ICFR: </b></i>The issuer has disclosed in its interim MD&amp;A any change
in the issuer&#146;s ICFR that occurred during the period beginning on January 1,
2009 and ended on June 30, 2009 that has materially affected, or is reasonably
likely to materially affect, the issuer&#146;s ICFR. </p>
<p align="justify">&nbsp;</p>
<p align="justify">Date: August 6, 2009 </p>
</font>
<p align="justify"><font size="2"><i><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&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;
</u></p>
</i>
<p align="justify">Name: Robert Gallagher <br>
Title: Chief Executive Officer </p>
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<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>
<b><font size="2">
<p align="right">Exhibit 99.4</p>
<p align="center">FORM 52-109F2 </p>
<p align="center">CERTIFICATION OF INTERIM FILINGS </p>
<p align="center">FULL CERTIFICATE </p>
</font></b><font SIZE="2" FACE="Arial">
<p align="justify">I, </font><font SIZE="2"><b>Brian Penny, Executive Vice
President and Chief Financial Officer of New Gold Inc</b>., certify the
following: </p>
</font><font SIZE="2"><i>
<p align="justify">1.</i> </p>
<p align="justify" style="margin-left: 5%; margin-top: -25"><i><b>Review</b></i>:
I have reviewed the interim financial statements and interim MD&amp;A (together, the
&quot;interim filings&quot;) of New Gold Inc. (the &quot;issuer&quot;) for the interim period ended
June 30, 2009. </p>
<i>
<p ALIGN="JUSTIFY">2.</i> </p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25"><i><b>No
misrepresentations</b></i>: Based on my knowledge, having exercised reasonable
diligence, 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.</font><i><font size="2">
</p>
<p ALIGN="JUSTIFY">3.</font></i><font size="2"> </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25"><font size="2"><i>
<b>Fair presentation</b></i>: Based on my knowledge, having exercised reasonable
diligence, 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 of and for the periods presented in the interim filings.</font><i><font size="2">
</p>
<p ALIGN="JUSTIFY">4.</font></i><font size="2"> </font></p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25"><font size="2"><i>
<b>Responsibility</b></i>: The issuer&#146;s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(DC&amp;P) and internal control over financial reporting (ICFR), as those terms are
defined in National Instrument 52-109 <i>Certification of Disclosure in Issuers&#146;
Annual and Interim Filings</i>, for the issuer. </p>
<i>
<p ALIGN="JUSTIFY">5.</i> </p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25"><i><b>Design</b></i>:
Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the
issuer&#146;s other certifying officer(s) and I have, as at the end of the period
covered by the interim filings<i> </p>
</i>
<p ALIGN="justify" style="margin-left: 5%">(a) </p>
<p ALIGN="justify" style="margin-left: 10%; margin-top: -25.5pt">designed DC&amp;P,
or caused it to be designed under our supervision, to provide reasonable
assurance that </p>
<p ALIGN="justify" style="margin-left: 10%">(i) </p>
<p ALIGN="justify" style="margin-left: 15%; margin-top: -25.5pt">material
information relating to the issuer is made known to us by others, particularly
during the period in which the interim filings are being prepared; and </p>
<p ALIGN="justify" style="margin-left: 10%">(ii) </p>
<p ALIGN="justify" style="margin-left: 15%; margin-top: -25.5pt">information
required to be disclosed by the issuer in its annual filings, interim filings or
other reports filed or submitted by it under securities legislation is recorded,
processed, summarized and reported within the time periods specified in
securities legislation; and </p>
<p ALIGN="justify" style="margin-left: 5%">(b) </p>
<p ALIGN="justify" style="margin-left: 10%; margin-top: -25.5pt">designed ICFR,
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. </p>
</font><i><font SIZE="2">
<p ALIGN="JUSTIFY">5.1 </p>
<p ALIGN="JUSTIFY" style="margin-left: 5%; margin-top: -25"><b>Control
framework:</b></font></i><font SIZE="2"> The control framework the issuer&#146;s
other certifying officer(s) and I used to design the issuer&#146;s ICFR is <i>
Internal Control</i><b> &#150; </b><i>Integrated Framework</i> published by the
Committee of Sponsoring Organizations of the Treadway Commission. </p>
</font><HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black noShade SIZE=5>
<i><font SIZE="2">
<p align="justify">5.2<b> </b></p>
<p align="justify" style="margin-left: 5%; margin-top: -25.5pt"><b>ICFR</b></font></i><font SIZE="2">
<b>&#150; material weakness relating to design</b>: N/A </font></p>
<i><font SIZE="2">
<p align="justify">5.3 </p>
<p align="justify" style="margin-left: 5%; margin-top: -25.5pt"><b>Limitation on
scope of design</b></font></i><font SIZE="2">: N/A </font></p>
<font SIZE="2"><i>
<p align="justify">6.</i> </p>
<p align="justify" style="margin-left: 5%; margin-top: -25.5pt"><i><b>Reporting
changes in ICFR: </b></i>The issuer has disclosed in its interim MD&amp;A any change
in the issuer&#146;s ICFR that occurred during the period beginning on January 1,
2009 and ended on June 30, 2009 that has materially affected, or is reasonably
likely to materially affect, the issuer&#146;s ICFR. </p>
<p align="justify">&nbsp;</p>
<p align="justify">Date: August 6, 2009 </p>
<i>
<p align="justify"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;Brian Penny&quot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u></p>
</i>
<p align="justify">Name:&nbsp; Brian Penny <br>
Title: </p>
<p align="justify" style="margin-left: 30pt; margin-top: -25.5pt">Executive Vice
President and <br>
Chief Financial Officer </p>
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<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>6
<FILENAME>exh995.htm
<DESCRIPTION>EXHIBIT 99.5
<TEXT>
<html>

<head>

<title>New Gold Inc.: Exhibit 99.5 - 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>

<p align="right"><b><font size="2">Exhibit 99.5</font></b></p>
<p align="center">
<img src="newgoldexh991x1x1.jpg" border="0" width="392" height="131"></p>
<div style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1; padding-top: 1; padding-bottom: 1">
<P style="margin-left:0pt; margin-top:10pt; margin-bottom:10pt; padding-left:0pt; padding-right:0pt; text-indent:0pt; color:#000000; " align=center><B>
<font size="2">PRESS RELEASE</font></B></P>
</div>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center><B>
<font size="5">New Gold Announces a 30% Increase in Gold Sales and a 37% Reduction in Cash Cost with Cash Flow from Operations Increasing by $20 Million in the Second Quarter
</font> </B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">(All figures are in US dollars unless otherwise stated)</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">August 6, 2009 &#150; VANCOUVER, BC &#150; New Gold Inc. (&#147;<B>New Gold</B>&#148;) (TSX and NYSE AMEX &#150; NGD) today announced unaudited financial and operational results for the second quarter ended June 30, 2009. Adjusted net earnings<SUP>(1)</SUP> were $10.6 million, or $0.04 per share, in comparison to adjusted net loss<SUP>(1)</SUP> of $4.7 million, or $0.05 per share, in the same period in 2008. New Gold reported a net loss of 202.8 million or $0.79 per share in comparison to a net loss of $4.8 million, or $0.05 per share, in the same period in 2008. The main adjustments leading to the second quarter net loss were: a goodwill impairment charge of approximately $189.6 million related to the business combination with Western Goldfields; a foreign exchange loss of $31.1 million, mark-to-market gains of $9.0 million on gold and fuel contracts, and realized and unrealized gains on investments of $9.7 million. Gold sales were 52,890 ounces at a realized gold price per ounce sold of $926
.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">As previously announced, during the quarter, the Company closed its merger with Western Goldfields Inc. (&#147;Western Goldfields&#148;) delivering on its strategy of value generating growth through continued merger and acquisition activity. The 2009 second quarter results presented below include one month of operations from Western Goldfields&#146; Mesquite mine.</font></P>
<P style="padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=justify><B>
<font size="2">Q2 2009 Highlights</font></B></P>
<ul>
  <li>
<P style="margin:0 0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Operating cash flows of $16.5 million compared to cash flows used from operations of $3.0 million in the corresponding quarter of 2008
</font></P>
  </li>
  <li>
<P style="margin:0 0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Adjusted net earnings<SUP>(1)</SUP> of $10.6 million, or $0.04 per share, compared to adjusted net loss<SUP>(1)</SUP> of $4.7 million, or $0.05 per share, in the corresponding quarter of 2008</font></P>
  </li>
  <li>
<P style="margin:0 0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Gold production of 55,633 ounces representing a 32% increase over the corresponding quarter in 2008
</font></P>
  </li>
  <li>
<P style="margin:0 0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Gold sales of 52,890 ounces at a total cash cost<SUP>(2)</SUP> per ounce sold, net of by-product sales of $468 compared to 40,540 ounces at a total cash cost<SUP>(2)</SUP> per ounce sold, net of by-product sales of $742, in the corresponding quarter of 2008</font></P>
  </li>
  <li>
<P style="margin:0 0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Cash and cash equivalents of $141.1 million at June 30, 2009</font></P>
  </li>
  <li>
<P style="margin:0 0pt; padding-left:0pt; padding-top:0pt; padding-right:-14.45pt; padding-bottom:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Closed business combination with Western Goldfields Inc. on June 1<SUP>st</SUP>, 2009</font></P>
  </li>
</ul>
<p style="text-indent: 0pt; color: #000000; margin-left: 0pt; margin-right: 0pt; padding-left: 0pt; padding-right: -14.45pt; padding-top: 0pt; padding-bottom: 0pt" align="justify"> <I>
<font style="font-size: 9pt"><br>
1. See reconciliation from adjusted net earnings to GAAP net earnings on page 6 under the Supplemental section of this release.</font></I></p>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">&#147;We are pleased to report a 30% increase in gold sales, a 37% decrease in cash cost and a $19.5 million increase in operating cash flow compared to the same quarter in 2008. These results underpin the success of our continued growth strategy and we expect to see an even stronger performance from our three operations in the second half of 2009, as production is expected to increase and cash cost decrease, as per mine plans, &#148; said Robert Gallagher, President and Chief Executive Officer.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Second Quarter Financial Review</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">In the second quarter 2009, adjusted net earnings<SUP>(1)</SUP> were $10.6 million, or $0.04 per share in comparison to adjusted net loss<SUP>(1)</SUP> of $4.7 million, or $0.05 per share in the same period in 2008. The 2009 increase in adjusted net earnings<SUP>(1)</SUP> is primarily due to the inclusion of Cerro San Pedro, one month of gold sales from Mesquite and the elimination of high costs from Amapari which ceased production on March 31, 2009. Earnings for the quarter before adjustments was a net loss of $202.8 million, or $0.79 per share, in comparison to a net loss of $4.8 million, or $0.05 per share, in the same period in 2008. The main adjustment in this quarter&#146;s net loss, was a goodwill impairment charge of approximately $189.6 million related to the business combination with Western Goldfields due mainly to $138.1 million in additional purchase consideration as a result of a 63% share price increase from the date of the announcement on March 4<SUP>th </SUP>to the date of acq
uisition on May 27<SUP>th</SUP>, 2009.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Gold sales improved by 30% with 52,890 ounces at an average realized gold price of $926 per ounce compared to 40,540 ounces at an average realized gold price of $898 per ounce in the corresponding quarter of 2008. Total cash cost<SUP>(2)</SUP> per gold ounce sold, net of by-product sales, in the second quarter was $468 in comparison to $742 in the second quarter of 2008, a reduction of 37%. The increase in gold sales and reduction in total cash cost<SUP>(2)</SUP> compared to the same quarter in 2008, are mainly attributed to the following items:</font></P>
<ul>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Additional gold and silver production from Cerro San Pedro which was acquired on June 30, 2008;
</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Increased copper sales volumes at Peak Mines in the second quarter of 2009 due to the transition into the Chesney ore body which contains high copper grades, partially offset by lower copper prices;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">No high total cash cost<SUP>(2)</SUP> gold production from Amapari effective March 31, 2009;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Additional production from the Mesquite mine which was acquired June 1 through the business combination with Western Goldfields; and</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Favourable Australian dollar exchange rate.</font></P>
  </li>
</ul>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Cash flow from operations in the second quarter 2009 was $16.5 million compared to cash flow used by operations of $3.0 million for the same period in 2008. The increase is mainly attributable to the acquisition of the Cerro San Pedro mine and increased copper revenues at Peak Mines, which was partially offset by care and maintenance expenditures at Amapari and one month of production at Mesquite which had higher than average operating costs and a charge related to growing inventory on the leach pad. Cash flow from operations should continue to move higher in the second half of 2009 consistent with our mine plans which projects higher production and lower cash costs.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Operational Review</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Mesquite </font> </B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Gold sales at Mesquite for the period of ownership (subsequent to June 1, 2009) totaled 11,601 ounces at a realized gold price of $880 per ounce sold. For the full quarter, gold sales were 27,338 ounces at a realized gold price of $854 per ounce sold, compared to 22,760 ounces at a realized gold price of $894 per ounce sold in the corresponding quarter of 2008. For the six months ending June 30, 2009, gold sales were 60,053 ounces compared to 32,720 ounces sold in the same period in 2008, during the initial ramp-up period.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center>
<font size="2">2 / 8</font></P>

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<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">For the period of ownership, total cash cost<SUP>(2)</SUP> per gold ounce sold was $708. Total cash cost<SUP>(2)</SUP> per gold ounce sold in the second quarter of 2009 was $647 compared to $548 in the second quarter of 2008. Total cash cost<SUP>(2)</SUP> increase in the second quarter is mainly attributable to higher operating costs due to a number of factors including:</font></P>
<ul>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">An increase in total tonnes moved of 13.9 million versus 12.5 million;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Fewer ounces of gold and more waste than modelled in the Rainbow Phase 3 layback;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">A one-time changeover from bias ply to radial tires for the entire haulage fleet;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Use of a mining contractor to catch up on waste stripping; and</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">One time maintenance costs to correct component failures in the haulage fleet.</font></P>
  </li>
</ul>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">The maintenance issues at Mesquite have now been resolved and the installation of radial tires on the trucks will result in reduced operating costs and higher production rates going forward. The use of a mining contractor allows for earlier production from Rainbow Phase 2, where the gold-bearing structure is more robust than Rainbow&#146;s Phase 3.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Total cash cost<SUP>(2)</SUP> per gold ounce sold for the six months ended June 30, 2009 was $607 compared to $667 in the same period last year. The decrease in total cash cost<SUP>(2)</SUP> in comparison to the corresponding period in 2008 is attributable to the increase in production in the first half of 2009.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">For the period of ownership, loss from operations at Mesquite was $1.7 million (not including goodwill impairment charge) and cash flow used by operations was $3.2 million. High operating costs and an increase in the leach pad inventory contributed to the negative cash flow in the second quarter 2009.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">With significantly higher production expected in the second half of the year resulting in lower cash cost<SUP>(2)</SUP>, we maintain our 2009 production guidance of 140,000 to 150,000 ounces, and anticipate slightly higher cash cost<SUP>(2)</SUP> per gold ounce sold in comparison to guidance of $530 to $540.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Cerro San Pedro</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Cerro San Pedro gold sales totaled 23,350 ounces at a realized gold price of $946 per ounce sold compared to 22,190 ounces at a realized gold price of $897 per ounce sold in the same quarter in 2008. For the six months ending June 30, 2009, gold sales were 41,664 ounces compared to 38,112 ounces sold in the same period in 2008. The increase in gold sales was due to higher tonnes placed on the pad and increased recovery rate, partially offset by lower feed grade. Silver sales for the second quarter increased significantly to 422,713 ounces compared to 300,728 ounces sold in the second quarter of 2008. For the six months ending June 30, 2009, silver sales were 794,932 ounces compared to 504,701 ounces sold in the same period in 2008. The increase in silver production year over year is attributed to higher silver grades mined and the benefits of secondary leaching during the first half of 2009. &nbsp;</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Total cash cost<SUP>(2)</SUP> per gold ounce sold, net of by-product sales, for the second quarter was $429 compared to $375 in the second quarter of 2008. &nbsp;Total cash cost<SUP>(2)</SUP> per gold ounce sold, net of by-product sales, for the six months ended June 30, 2009 was $483 compared to $426 in the same period last year. The increase in cash cost<SUP>(2)</SUP> is due to lower silver prices and higher consumables prices, which were partly offset by higher silver production and the depreciation in the Mexican Peso versus the US dollar.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Second quarter earnings from operations at Cerro San Pedro were $5.3 million and cash flow from operations was $10.5 million. &nbsp;</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center>
<font size="2">3 / 8</font></P>

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<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">As with Mesquite, the 2009 Cerro San Pedro mine plan projects increased gold production in the second half of 2009. Due to higher than planned silver production and prices, it is anticipated that cash cost<SUP>(2)</SUP> per gold ounce sold, net of by-product sales, will be lower than 2009 guidance of $550 to $570. Production guidance remains unchanged at 90,000 to 100,000 ounces.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Peak Mines</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Peak Mines&#146; gold sales in the second quarter totaled 17,939 ounces at a realized gold price of $930 per ounce sold compared to 18,441 ounces at a realized gold price of $902 per ounce sold in the same quarter of 2008. For the six months ending June 30, 2009, gold sales totaled 38,795 ounces compared to 49,688 ounces sold in the same period of 2008. Copper sales increased by 199% during the second quarter 2009 to 2.57 million pounds at a realized copper price per pound of $2.07 from 0.86 million pounds at a realized copper price per pound of $4.27 in the same period in 2008. Gold sales were lower and copper sales higher in the second quarter 2009 in comparison to the same quarter in the prior year, due to the following items:</font></P>
<ul>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Mining shifting to the Chesney ore body in the second quarter 2009, which has higher copper grades;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Lower than expected gold grade; and </font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Sales were also negatively impacted due to a temporary delay from heavier than normal rainfalls which held up concentrate drying activities.</font></P>
  </li>
</ul>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Total cash cost<SUP>(2)</SUP> per gold ounce sold, net of by-product sales, for the second quarter was $364 compared to $472 in the second quarter of 2008. &nbsp;Total cash cost<SUP>(2)</SUP> per gold ounce sold, net of by-product sales, for the six months ended June 30, 2009 was $349 compared to $352 in the same period last year. The decrease in cash cost<SUP>(2)</SUP> is primarily due to higher copper revenues from increased volumes and a favourable Australian dollar exchange rate, which was partially offset by lower gold ounces sold due to increased inventory attributable to the timing of concentrate shipments.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Earnings from operations at Peak Mines were $8.6 million for the quarter compared to $2.9 million in the same period in 2008. Cash flow from operations increased by $23.1 million in the second quarter 2009 to $17.6 million in comparison to cash flow used by operations of $5.5 million for the same period in 2008. The significant increase in cash flow from operations is attributable to the receipt of $17.4 million in copper concentrate payments and a sizeable $108 decrease in total cash cost<SUP>(2)</SUP> per gold ounce sold over the second quarter in 2008.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">As with Mesquite and Cerro San Pedro, the 2009 mine plan for Peak Mines forecasts increased gold production in the second half of 2009 as the Perseverance Zone D ore body comes into production. With metal production at planned levels and copper prices remaining above our budgeted level, we are maintaining our production guidance of 90,000 to 100,000 ounces of gold and 13 million to 15 million pounds of copper while expecting to come in at the low end of our total cash cost<SUP>(2)</SUP> per gold ounce sold range of $370 and $390.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">New Afton Project Update</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">During the second quarter of 2009, the New Afton underground development crews advanced development by 424 metres in the second quarter compared to 195 metres during the first quarter of 2009. An innovative fibrecrete spraying technique was used to fully line one of the vent raises with shotcrete, which completed the support lining for all three ventilation boreholes excavated to date. Project spend during the second quarter at New Afton was $11.8 million (not including $9.2 million in capitalized interest), which is mainly comprised of $5.6 million for underground development and completion of the mill building, $3.2 million in equipment, and $3.0 million for engineering and consulting fees<B>.</B> Capital expenditures for the six months ending June 30, 2009 were $30.0 million (not including $9.2 million in capitalized interest).</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center>
<font size="2">4 / 8</font></P>

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<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">New Afton&#146;s underground mining crews achieved breakthrough on July 23, connecting the conveyor access decline from the surface portal with the conveyor access incline being driven from development headings initiating from the in-pit portal. The breakthrough connects 1,230 metres of development from the surface portal with over 5,000 metres of development initiated from the in-pit portal. The connection now provides the underground crews at New Afton with two means of accessing the underground workings, which increases flexibility in all aspects of the continuing mining activities. At the time of the breakthrough, over 2,600 metres of the total 4,525 metres of conveyor access had been completed.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">The development schedule for New Afton involves continuation of underground development through to 2012 and surface construction to resume at the end of 2010, with production commencing in the second half of 2012. The project will be an underground block cave mine, which will produce an annual estimated average of 85,000 ounces of gold and 75 million pounds of copper over a 12 year mine life.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Liquidity and Capital Resources</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">New Gold held cash and cash equivalents of $141.1 million as at June 30, 2009, not including $7.5 million of restricted cash related to the Mesquite mine project financing, in comparison to $185.7 million on December 31, 2008. The change in cash position is comprised mainly of the following items:</font></P>
<ul>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">$25.1 million spent on the senior secured notes buy back on January 9, 2009;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">$20.7 million (not including restricted cash) acquired through the business combination with Western Goldfields on June 1, 2009;</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">$39.2 million in spending at New Afton for the six month period ending June 30, 2009, which includes capitalized interest; and</font></P>
  </li>
  <li>
<P style="margin-left:0pt; margin-top:0; margin-bottom:0; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">$24.3 million generated in operating cash flow for the six month period ending June 30, 2009.</font></P>
  </li>
</ul>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">The Company&#146;s overall debt position is $272.1 million. The debt is comprised of $160.9 million in senior secured notes, $47.3 million in convertible debentures, and $63.9 in project financing for the Mesquite mine. The majority of the debt is not due until 2017, well after the New Afton production start-up. Under the terms of the Mesquite mine project financing, completion as defined by the credit agreement must be reached by June 30, 2009. The Company failed the completion test but received an extension from the syndicate to allow an amendment to the facility to be negotiated by September 30, 2009. Production at the Mesquite Mine was below expected production levels agreed to in the term loan facility during the third quarter, which is considered a trigger event under the term loan facility. However, the Company has four months to remediate the trigger event. The Company expects to be in compliance with expected production levels under the agreement during the four month period.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Capital expenditures for the remaining six months of 2009 are expected to total approximately $48.4 million which is mainly comprised of $30.4 million (including capitalized interest) for New Afton, $13.5 for Peak Mines, and $2.4 million for Cerro San Pedro. At current metal prices, it is expected that the Company&#146;s existing assets coupled with the cash flow from current operations will be sufficient to cover the construction of the New Afton project.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Second Quarter Results Overview</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Second quarter and year to date results for 2009 and full year 2008 actuals presented in the table below are for the period of ownership for the Mesquite and Cerro San Pedro mines, following the business combinations with Western Goldfields on June 1, 2009, and Metallica Resources Inc. and Peak Gold Ltd. on June 30, 2008, respectively.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center>
<font size="2">5 / 8</font></P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<TABLE style="margin-left:0pt; border-collapse:collapse" width="100%" bordercolor="#111111" cellpadding="0" cellspacing="0" height="217"><TR>
  <TD style="border-left:medium none #000000; border-right:medium none #000000; border-top:medium none #000000; border-bottom:2px solid #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="40%" height="21">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:medium none #000000; border-top:medium none #000000; border-bottom:2px solid #000000; ; border-right-style:none; border-right-width:medium" align=left valign=top width="15%" height="21">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:medium none #000000; border-bottom:2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium" align=left valign=top width="15%" height="21">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:medium none #000000; border-bottom:2px solid #000000; ; border-left-style:none; border-left-width:medium; border-right-style:none; border-right-width:medium" align=left valign=top width="15%" height="21">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:medium none #000000; border-right:medium none #000000; border-bottom:2px solid #000000; ; border-left-style:none; border-left-width:medium" align=left valign=top width="15%" height="21">&nbsp;</TD></TR>
  <TR>
    <TD style="border-left:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top-color:#000000" align=left valign=top width="40%">&nbsp;</TD>
    <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-bottom:1.5pt solid #000000; border-top-color:#000000" align=left width="15%">
    <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
    <font size="2">Q2 2009</font></B></P>
</TD>
    <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000; border-top-color:#000000" align=left width="15%">
    <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
    <font size="2">YTD 2009</font></B></P>
</TD>
    <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000; border-top-color:#000000" align=left width="15%">
    <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
    <font size="2">2009 FY <br>
    Guidance</font></B></P>
</TD>
    <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000; border-top-color:#000000" align=left width="15%">
    <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
    <font size="2">2008 FY <br>
    Actuals</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=justify><B>
  <font size="2">Gold Production oz</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Mesquite</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">&nbsp;&nbsp;9,041</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">&nbsp;&nbsp;9,041</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">80k-90k</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Cerro San Pedro</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">24,210</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">44,793</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">90k-100k</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">&nbsp;45,618</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Peak Mines</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">22,382</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">43,011</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">90k-100k</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">100,493</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Amapari</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">13,726</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">10k</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">&nbsp;&nbsp;86,992</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Total Gold Production oz</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">55,633</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">110,571</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">270k-300k</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">233,103</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-right:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Copper m lbs (Peak)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <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 width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">8.08</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">13-15</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">8.25</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Silver oz (Cerro San Pedro)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">414,038</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">841,477</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">1.1-1.3m</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">572,575</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt"><B>
  <font size="2">Gold sales oz</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">52,890</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">108,287</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">237,590</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:1.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt"><B>
  <font size="2">Total cash cost/oz<SUP>(2)</SUP> &nbsp;</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">$468</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">$491</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">$470-$490</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">$569</font></P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">2009 Forecast Update</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">For the combined Company, previously announced 2009 guidance for gold production of 330,000 to 360,000 ounces at a total cash cost<SUP>(2)</SUP> per gold ounce sold, net of by-product sales, of $490 to $510, remains unchanged. For the period of New Gold ownership of Mesquite, the 2009 guidance for the combined company is gold production of 270,000 to 300,000 ounces at a total cash cost<SUP>(2) </SUP>per gold ounce sold, net of by-product sales, of $470 to $490.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Robert Gallagher, President and Chief Executive Officer said, &#147;As we look forward to the second half of 2009, we reiterate our guidance and remain focused on our operational objectives. We will continue to take the steps necessary to maintain a solid financial position while pursuing an aggressive growth strategy. Our exceptional management team and board, coupled with cash-flow positive operating assets, continue to position New Gold to build momentum toward delivering increasing shareholder value.&#148;</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Please <U>click here</U> to view the second quarter Financial Statements</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">Please <U>click here</U> to download the second quarter Management&#146;s Discussion and Analysis</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Conference Call-in Details</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">New Gold will hold a conference call to discuss these results at 10:00am Eastern on August 6<SUP>th</SUP>, 2009. Anyone may join the call by dialling toll free 1-888-789-9572 or +1-416-695-7806 to access the call from outside Canada or the U.S. Passcode 4424442. You can listen to a recorded playback of the call after the event until September 18, 2009 by dialling 1-800-408-3053 or +1-416-695-5800 for calls outside Canada and the U.S. Passcode #7505820.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">About New Gold</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font size="2">New Gold is an intermediate gold mining company, headquartered in Vancouver, British Columbia, Canada with three operating assets; the Mesquite Mine in the United States, Cerro San Pedro Mine in Mexico and Peak Mines in Australia. The Company is expected to produce between 330,000 and 360,000 ounces of gold in 2009 on a combined basis and between 270,000 and 300,000 ounces of gold in 2009 for the period of ownership, growing to over 400,000 ounces in 2012 and have significant reserves and resources with a strong portfolio of mining, development and exploration assets in mining friendly jurisdictions. &nbsp;For further information on New Gold, please visit
<font color="#0000FF"> <U>www.newgold.com</U></font>.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center>
<font size="2">6 / 8</font></P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Supplemental Information</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font size="2">Reconciliation of Adjusted Net Earnings to GAAP Net Earnings
</font> </B><font size="2">&#150; Management of New Gold uses the non-GAAP financial measure adjusted net earnings to evaluate &nbsp;the Company&#146;s operating performance, and for planning and forecasting future business operations. The Company believes the use of adjusted net earning allows investors and analysts to compare the results of the continuing operation of the Company and its direct and indirect subsidiaries relating to the production and sale of minerals to similar operating results of other mining companies, by excluding exceptional or unusual items, income or loss from discontinued operations and the permanent impairment of assets, including marketable securities and goodwill. Management&#146;s determination of the components of adjusted net earnings are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Adjusted net earnings is not, and should not be used, as an alternative to GAAP net earnings as reflected in the consolid
ated financial statements of the Company. &nbsp;Adjusted net earnings is not a measure of financial performance under GAAP and this measure should not be considered in isolation or as a substitute to performance measures calculated in accordance with GAAP. The table below sets forth a reconciliation of adjusted net earnings to GAAP net earnings, which is the most directly comparable GAAP financial measure.</font></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:1.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=justify>
  <font size="2">Description ($ million) </font> </P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
  <font size="2">Q2 2009</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-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
  <font size="2">YTD 2009</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-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
  <font size="2">Q2 2008</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-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center><B>
  <font size="2">YTD 2008</font></B></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt"><B>
  <font size="2">Net Earnings (loss) per Financial Statements</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(202.8)</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(190.8)</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(4.8)</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; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">5.0</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt"><B>
  <font size="2">Adjusted for the following items:</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " 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-left:1.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Impairment charge (Western Goldfields)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">189.6</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Foreign exchange loss</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">31.1</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">33.1</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">0.1</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; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">1.2</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Gain on redemption of long-term debt</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(14.2)</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Realized and unrealized gain on gold and fuel contracts</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(9.0)</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(9.0)</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; 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; border-left:0.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Realized and unrealized gains on investments</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(9.7)</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(9.7)</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:medium none #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%" bgcolor="#E6EFFF">&nbsp;</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:0.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Business combination expenses</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">5.9</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:0.5pt solid #000000; padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">6.6</font></P>
</TD>
  <TD style="border-left:0.5pt solid #000000; border-right:2px solid #000000; border-top:medium none #000000; border-bottom:0.5pt solid #000000; 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; border-left:0.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">-</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Adjusted net earnings (loss)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">5.0</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">5.6</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">4.7</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; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">6.2</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Tax effect on adjustments (30%)</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">5.6</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">2.0</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">0</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; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">0.4</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt"><B>
  <font size="2">Adjusted net earnings (loss)</font></B></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">10.6</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">7.6</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">4.7</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; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:0.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">6.6</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="40%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Shares basic</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">258</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">235</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; border-top:1.5pt solid #000000; border-right:2px solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">213</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; border-top:1.5pt solid #000000; border-right:1.5pt solid #000000; border-bottom:medium none #000000; " align=left valign=top width="15%">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">73</font></P>
</TD></TR>
<TR>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="40%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt">
  <font size="2">Shares- basic per share</font></P>
</TD>
  <TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt; border-left:1.5pt solid #000000; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">0.04</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; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(0.03)</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; border-top:medium none #000000; border-right:2px solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">(0.05)</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; border-top:medium none #000000; border-right:1.5pt solid #000000; border-bottom:1.5pt solid #000000" align=left valign=top width="15%" bgcolor="#E6EFFF">
  <P style="padding:0pt; text-indent:0pt; color:#000000; margin-left:0pt; margin-right:0pt" align=center>
  <font size="2">0.09</font></P>
</TD></TR>
</TABLE>
<P style="color:#000000"><font style="font-size: 9pt">(1)</font></P>
<P style="margin-left:20pt; margin-top:-25.5pt; color:#000000">
<font style="font-size: 9pt">ADJUSTED NET EARNINGS/ADJUSTED NET LOSS</font></P>
<P style="color:#000000"><font style="font-size: 9pt">See reconciliation from adjusted net earnings to GAAP net earnings on page 6 under the Supplemental section of this release.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000">
<font style="font-size: 9pt">(2) &nbsp;&nbsp;&nbsp;</font></P>
<P style="margin-left:20pt; margin-top:-25.5pt; padding:0pt; color:#000000">
<font style="font-size: 9pt">TOTAL CASH COST </font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font style="font-size: 9pt">&#147;Total cash cost&#148; per ounce 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. The Gold Institute ceased operations in 2002, but the standard is widely accepted as the 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. New Gold reports total cash cost on a sales basis. 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. Total cash cost is reduced by any by-product revenue and is then divided by ounces sold to arrive at the total by-product cash cost of sales. 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. This data is furnished to provide additional information and is a non-GAAP measure. Total cash cost presented do not have a standardized meaning under GAAP. 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.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center>
<font size="2">7 / 8</font></P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify><B>
<font style="font-size: 9pt">CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</font></B></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify>
<font style="font-size: 9pt">Certain information contained in this press release, including any information relating to New Gold&#146;s future financial or operating performance may be deemed &#147;forward looking&#148;. All statements in this press release, other than statements of historical fact, that address events or developments that New Gold expects to occur, are &#147;forward-looking statements&#148;. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words &#147;expects&#148;, &#147;does not expect&#148;, &#147;plans&#148;, &#147;anticipates&#148;, &#147;does not anticipate&#148;, &#147;believes&#148;, &#147;intends&#148;, &#147;estimates&#148;, &#147;projects&#148;, &#147;potential&#148;, &#148;scheduled&#148;, &#147;forecast&#148;, &#147;budget&#148; and similar expressions, or that events or conditions &#147;will&#148;, &#147;would&#148;, &#147;may&#148;, &#147;could&#148;, &#147;should&#148; or &#147;might&#148; occur. All
 such forward looking statements are subject to important risk factors and uncertainties, many of which are beyond New Gold&#146;s ability to control or predict. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause New Gold&#146;s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, without limitation: New Gold&#146;s anticipated synergies from the business combination with Western Goldfields Inc. may not be realized; there may be difficulties in integrating the operations and personnel of New Gold; significant capital requirements; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Brazil, 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, Brazil, Mexico and Chile or any other country in which New Gold currently or may in the future carry on business; taxation; controls, regulations and political or economic developments in the countries in which New Gold 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; defective title to mineral claims o
r 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 the risk of inadequate insurance or inability to obtain insurance, to cover these risks) as well as &#147;Risks Factors&#148; included in New Gold&#146;s Annual Information Form filed on March 31, 2009 and Management Information Circular &nbsp;filed on April 15, 2009, both available at www.sedar.com. Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. All of the forward-looking statements contained in this press release are qualified by these cautionary statements. New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements,
 whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align=justify><BR></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align=justify>For further information please contact:</P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align=justify>M&#233;lanie Hennessey<br>
Vice President Investor Relations<B><br>
New Gold Inc.<br>
</B>Direct: +1 (604) 639-0022<br>
Toll-free: +1 (888) 315-9715<br>
Email: info@newgold.com<br>
Website: www.newgold.com</P>
<p><font size="2">
<BR>
</font></p>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center>
<font size="2">8 / 8</font></P>
<hr color="#000000" size="5">

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
