<SEC-DOCUMENT>0001279569-17-000133.txt : 20170201
<SEC-HEADER>0001279569-17-000133.hdr.sgml : 20170201
<ACCEPTANCE-DATETIME>20170201125655
ACCESSION NUMBER:		0001279569-17-000133
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20170201
FILED AS OF DATE:		20170201
DATE AS OF CHANGE:		20170201

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:		17564013

	BUSINESS ADDRESS:	
		STREET 1:		181 BAY STREET, SUITE 3510
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M5J 2T3
		BUSINESS PHONE:		(416) 324-6000

	MAIL ADDRESS:	
		STREET 1:		181 BAY STREET, SUITE 3510
		CITY:			TORONTO
		STATE:			A6
		ZIP:			M5J 2T3

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DRC RESOURCES CORP                                      /FI
		DATE OF NAME CHANGE:	19860904
</SEC-HEADER>
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<TYPE>6-K
<SEQUENCE>1
<FILENAME>newgold6k.htm
<DESCRIPTION>FORM 6-K
<TEXT>
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<P STYLE="margin: 0"></P>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 12pt"><DIV STYLE="font-size: 1pt; border-top: Black 4pt solid; border-bottom: Black 2pt solid; width: 100%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 14pt Times New Roman, Times, Serif"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 14pt Times New Roman, Times, Serif"><B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><B>Washington,
D.C. 20549</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;<BR>
&nbsp;</FONT></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 18pt Times New Roman, Times, Serif"><B>Form
6-K</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>UNDER THE SECURITIES EXCHANGE ACT OF 1934</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">For the month of
February 2017.</P>

<P STYLE="margin: 0">Commission File Number 001-31722</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT><IMG SRC="logo.jpg" ALT=""></P>

<P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: center; color: Red"></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 12pt 0 0; text-align: center"><FONT STYLE="font: 24pt Times New Roman, Times, Serif"><B>New
Gold Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Suite 3510 &ndash; 181 Bay Street</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Toronto, Ontario M5J 2T3</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Canada</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">(Address of principal executive office)</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Form 20-F
&#9744;&nbsp;Form 40-F &#9746;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">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): &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">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>&#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>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&rsquo;s &ldquo;home country&rdquo;), or under the rules
of the home country exchange on which the registrant&rsquo;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&rsquo;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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 12pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 4pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>DOCUMENTS
FILED AS PART OF THIS FORM 6-K</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 7%; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Exhibit</B></FONT></td>
    <TD STYLE="width: 3%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 90%; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Description</B></FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: center">99.1</td>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Material Change Report dated February 1, 2017</FONT></TD></tr>
<tr style="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>SIGNATURES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">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="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <td><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <td><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <td colspan="2"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>NEW GOLD INC.</B></FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<tr>
    <td style="vertical-align: top; width: 43%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <td style="vertical-align: top; width: 11%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <TD STYLE="vertical-align: top; width: 6%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">By:</FONT></td>
    <TD STYLE="vertical-align: bottom; width: 37%; border-bottom: black 1.5pt solid; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>/s/
    Lisa Damiani</I></FONT></td>
    <td style="vertical-align: top; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td></tr>
<tr>
    <TD STYLE="text-align: left; vertical-align: top"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Date:&nbsp;&nbsp;February
    1, 2017</FONT></td>
    <td style="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <td style="vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></td>
    <td colspan="2"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Lisa Damiani</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Vice President, General Counsel</P>

<P STYLE="margin: 0">and Corporate Secretary</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

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end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>ex991.htm
<DESCRIPTION>MATERIAL CHANGE REPORT DATED FEBRUARY 1, 2017
<TEXT>
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     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"></FONT></P>

<P STYLE="margin: 0; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>Exhibit 99.1</B></FONT></P>


<P STYLE="margin: 0; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0; text-align: right"><FONT STYLE="font: 8pt Arial, Helvetica, Sans-Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="margin: 0; text-align: right"></P>

<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">FORM 51-102F3</P>

<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">MATERIAL CHANGE REPORT</P>

<P STYLE="font: bold 11pt Times New Roman, Times, Serif; margin: 0; text-align: center">UNDER NATIONAL INSTRUMENT 51-102</P>

<P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 11%; padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left"><font style="font-size: 11pt"><b>Item 1.</b></font></td>
    <TD STYLE="width: 89%; padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left; text-decoration: underline; text-indent: -0.25pt"><font style="font-size: 11pt"><b><u>Reporting Issuer</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><font style="font-size: 11pt">New Gold Inc. (&ldquo;<b>New Gold</b>&rdquo; or &ldquo;the &ldquo;<b>Company</b>&rdquo;)</font><br>
<font style="font-size: 11pt">Suite 3510, 181 Bay Street</font><br>
<font style="font-size: 11pt">Toronto, Ontario M5J 2T3</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left"><font style="font-size: 11pt"><b>Item 2.</b></font></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left; text-decoration: underline"><font style="font-size: 11pt"><b><u>Date of Material Change</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><FONT STYLE="font-size: 11pt; color: Black">January
    30, 2017</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left"><font style="font-size: 11pt"><b>Item 3.</b></font></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left; text-decoration: underline"><font style="font-size: 11pt"><b><u>News Release</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><font style="font-size: 11pt">A press release with respect to this material change report was issued by New Gold on January 30, 2017 through Canadian Newswire and filed on the System for Electronic Document Analysis and Retrieval.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left"><font style="font-size: 11pt"><b>Item 4.</b></font></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left; text-decoration: underline"><font style="font-size: 11pt"><b><u>Summary of Material Change</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><font style="font-size: 11pt">On January 30, 2017, New Gold announced its 2016 fourth quarter and full-year operating results, an update on its Rainy River project, 2017 guidance as well as Board and Management changes. The preliminary figures provided for 2016 fourth quarter and full-year production, sales, operating expense, total cash costs, all-in sustaining costs and other financial information are approximate and may differ slightly from the final results in the 2016 annual audited consolidated financial statements and management&rsquo;s discussion and analysis. </font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left"><font style="font-size: 11pt"><b>Item 5.</b></font></td>
    <TD STYLE="padding: 1.45pt 5.75pt">
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b><u>Full Description of Material Change</u></b></P>
        <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: left">See press release attached as Schedule A.</P></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left"><font style="font-size: 11pt"><b>Item 6.</b></font></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left; text-decoration: underline"><font style="font-size: 11pt"><b><u>Reliance on subsection 7.1(2) of National Instrument 51-102</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><font style="font-size: 11pt">The report is not being filed on a confidential basis.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: justify"><font style="font-size: 11pt"><b>Item 7.</b></font></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: justify; text-decoration: underline"><font style="font-size: 11pt"><b><u>Omitted Information</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify"><font style="font-size: 11pt">No information has been omitted.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: justify"><font style="font-size: 11pt"><b>Item 8.</b></font></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: justify; text-decoration: underline"><font style="font-size: 11pt"><b><u>Executive Officer</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: left"><FONT STYLE="font-size: 11pt; color: Black">Lisa
    Damiani, Vice President, General Counsel and Corporate Secretary</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify"><font style="font-size: 11pt">(416) 324-6000</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left"><font style="font-size: 11pt"><b>Item 9.</b></font></td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; font-weight: bold; text-align: left; text-decoration: underline"><font style="font-size: 11pt"><b><u>Date of Report</u></b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify">&nbsp;</td>
    <TD STYLE="padding-top: 1.45pt; padding-right: 5.75pt; padding-left: 5.75pt; text-align: justify"><font style="font-size: 11pt">February 1, 2017</font></td></tr>
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<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 12pt"><B>New Gold Achieves 2016 Production Guidance at Lower Costs,
Provides Rainy River Update, 2017 Guidance and Announces Board and Management Changes</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><I>(All dollar figures are in US dollars unless otherwise
indicated)</I></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">TORONTO, Jan. 30, 2017 /CNW/ - New Gold Inc. (&quot;New Gold&quot;)
(TSX:NGD) (NYSE MKT:NGD) today announces its 2016 fourth quarter and full-year operating results, an update on its Rainy River
project and 2017 guidance. The preliminary figures provided for 2016 fourth quarter and full-year production, sales, operating
expense, total cash costs, all-in sustaining costs and other financial information are approximate and may differ slightly from
the final results in the 2016 annual audited consolidated financial statements and management's discussion and analysis.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>2016 HIGHLIGHTS</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Full-year gold production of 381,663 ounces achieved
the mid-point of the guidance range of 360,000 to 400,000 ounces </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Copper production of 102 million pounds exceeded the
high end of the guidance range of 81 to 93 million pounds by 10% </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">2016 operating expense of $640 per gold ounce and
$1.14 per copper pound </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">2016 delivered record low all-in sustaining costs<SUP>(1)</SUP>
of $692 per ounce, including total cash costs<SUP>(2)</SUP> of $349 per ounce </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">All-in sustaining costs were well below the mid-2016
updated guidance range of $750 to $790 per ounce, which had been lowered by $75 per ounce relative to the original 2016 guidance</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Fourth quarter production of 95,883 ounces of gold
and 26 million pounds of copper </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Fourth quarter operating expense of $780 per gold
ounce and $1.58 per copper pound </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Fourth quarter all-in sustaining costs of $619 per
ounce, including total cash costs of $360 per ounce </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Year-end cash and cash equivalents of $186 million</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>2017 GUIDANCE</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Gold production to increase to 380,000 to 430,000
ounces, benefitting from targeted first production at Rainy River in September </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Copper production to remain consistent at 100 to 110
million pounds </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Operating expense of $630 to $670 per gold ounce and
$1.25 to $1.45 per copper pound </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">All-in sustaining costs of $825 to $865 per ounce,
including total cash costs of $395 to $435 per ounce </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Rainy River targeted first production in September,
approximately three months later than previous estimate </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Three-month delay due to slower than planned ramp-up
of mining rates impacting delivery of construction materials</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Commercial production expected November 1, 2017</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Rainy River estimated remaining capital to achieve
November commercial production of $515 million, inclusive of $40 million of contingency</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>BOARD AND MANAGEMENT CHANGES</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Randall Oliphant to step down as Executive Chairman,
continuing as a member of the Board </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Ian Pearce, a member of the Board, to become non-executive
Chair of the Board </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Hannes Portmann, currently President, to become President
and Chief Executive Officer </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Rainy River leadership team further strengthened</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&quot;We are proud of our very strong 2016 operational results,
and despite challenges faced at Rainy River in 2016, we are positioned to complete the construction later this year,&quot; stated
Randall Oliphant. &quot;We have further strengthened the Rainy River leadership team, and today we have announced a change in leadership
at the company.&quot;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Newly-appointed Chair of the Board Ian Pearce has over 25
years of experience in the mining industry.&nbsp; Mr. Pearce was with Fluor Inc. for ten years, in progressively more senior engineering
and project management roles, including managing numerous significant development projects in the extractive sector. From 2003
to 2006, Mr. Pearce held executive roles at Falconbridge Limited, including Chief Operating Officer, and he served as Chief Executive
Officer of Xstrata Nickel, a subsidiary of Xstrata plc, from 2006 to 2013.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&quot;As a significant New Gold shareholder, I couldn't be
more confident in the combination of Ian, with his mine operations and project development experience, and Hannes, with his leadership,
energy and deep understanding of the value drivers of our business,&quot; added Mr. Oliphant. &quot;They have all of my support
and I look forward to continuing to serve as a Board member and working with the entire New Gold team as we evaluate strategic
opportunities to fulfill our collective goal of creating long-term shareholder value.&quot;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&quot;I am delighted to be moving into the role of Chair and
working with Hannes and the team to deliver Rainy River and continue to build a great intermediate gold mining business,&quot;
stated Ian Pearce. &quot;On behalf of our Board and entire company, I thank Randall for all he has done in leading New Gold over
the last eight years and look forward to working with him as a fellow Board member.&quot;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&quot;Randall has been a leader in the gold mining industry
for many years. As a founder of New Gold, I thank Randall for his dedication and significant contributions to the company. I am
pleased that he will continue to participate as a Board member and share his strategic advice with the next generation of leadership
at the company,&quot; stated Pierre Lassonde, a former director and continuing large shareholder of New Gold.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>PRELIMINARY 2016 CONSOLIDATED OPERATIONAL RESULTS</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="6" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Three months ended December 31</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Year ended December 31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating information</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>95,883</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">131,719</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>381,663</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">435,718</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>93,936</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">133,005</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>378,239</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">428,852</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper (millions of pounds):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>25.6</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">28.8</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>102.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">99.9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold </FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>24.6</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">25.5</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>99.2</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">92.9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Silver (millions of ounces):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">0.5</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.9</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">0.5</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.8</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Revenue:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,176</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,067</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,219</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,120</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2.22</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.96</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2.03</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">2.21</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Silver ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>16.19</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">14.10</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>16.68</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">15.12</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Average realized price<SUP>(3)</SUP>:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,211</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,094</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,255</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,149</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2.45</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">2.16</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2.23</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">2.42</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Silver ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>16.80</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">14.44</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>17.15</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">15.38</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expense:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>780</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">614</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>640</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">647</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.58</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.21</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.14</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.36</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Silver ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>10.82</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">8.10</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>8.75</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">8.66</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Total cash costs ($/ounce)<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>360</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">389</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>349</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">443</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)<SUP>(1)</SUP></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>619</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">613</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>692</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">809</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The company has included new revenue and cost disclosures,
namely, revenue and operating expense per ounce and per pound. Revenue per ounce and per pound is net of treatment and refining
charges, whereas average realized price is before treatment and refining charges are taken into account. Operating expense per
ounce and pound apportions the company's operating expense, as shown on New Gold's consolidated income statement, to each metal
on a percentage of revenue basis.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The fourth quarter of 2016 delivered gold production of 95,883
ounces, resulting in full-year gold production of 381,663 ounces. The combination of the Peak Mines' very strong year and solid
operating performances at New Afton and Cerro San Pedro enabled the company to achieve the mid-point of its guidance range of 360,000
to 400,000 ounces. Full-year production was lower than 2015 primarily due to Cerro San Pedro's planned transition to residual leaching
in mid-2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold's fourth quarter copper production of 26 million
pounds was consistent with the first three quarters of 2016 and slightly below the prior-year quarter. Full-year copper production
of 102 million pounds was in line with prior-year production and 10% above the high end of the company's 2016 guidance range of
81 to 93 million pounds. Full-year silver production of 1.3 million ounces was below the guidance range of 1.6 to 1.8 million ounces.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Operating expense per gold ounce during the fourth quarter
increased relative to the prior-year quarter primarily due to a heap leach inventory write-down of $24 million at Cerro San Pedro.
Operating expense per gold ounce for the full year was in line with the prior year. &nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The company delivered fourth quarter all-in sustaining costs
of $619 per ounce, including total cash costs of $360 per ounce, which was the lowest cost quarter of the year and consistent with
the prior-year quarter. The company's strong fourth quarter performance reduced New Gold's 2016 all-in sustaining costs to a record
low $692 per ounce, including total cash costs of $349 per ounce. The significant decrease in costs enabled New Gold to generate
an all-in sustaining cost margin of $563 per ounce, or 45%. The $117 per ounce decrease in all-in sustaining costs relative to
the prior year was attributable to the combination of a $94 per ounce decrease in total cash costs, primarily driven by significantly
lower costs at the Peak Mines, and a $27 million, or $23 per ounce, decrease in the company's consolidated sustaining costs. Consolidated
sustaining costs include New Gold's consolidated sustaining capital, exploration, general and administrative, and amortization
of reclamation expenditures. &nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">As indicated in New Gold's 2016 second quarter results news
release, the company's original full-year guidance for consolidated total cash costs and all-in sustaining costs was lowered by
$75 per ounce to $360 to $400 per ounce and $750 to $790 per ounce, respectively. The company's full-year costs ultimately came
in below the reduced cost guidance. This was due to the positive impact of higher copper production, lower sustaining costs and
higher realized copper and silver prices only being partially offset by the appreciation of exchange rates relative to what was
assumed when setting guidance.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>New Afton </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Three months ended December 31</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Year ended December 31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>23,879</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">30,231</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>98,098</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">105,487</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>24,171</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">28,473</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>96,851</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">99,458</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper (millions of pounds):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>21.4</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">25.1</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>87.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">86.0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>21.1</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">22.2</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>84.9</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">79.7</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expenses:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>415</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">344</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>415</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">364</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.84</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">0.68</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.74</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">0.76</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Total cash costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(720)</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(614)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(634)</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(724)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(253)</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(340)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(218)</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(242)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs on a co-product basis:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>691</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">539</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>686</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">642</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.41</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.07</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.22</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.34</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The decrease in gold production at New Afton relative to the
fourth quarter of 2015 was due to an expected decrease in gold grade and gold recovery, partially offset by an increase in mill
throughput. New Afton's average mill throughput during the quarter was over 17,000 tonnes per day. Copper production was also lower
than the prior-year quarter due to a decrease in copper grade and recovery.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Fourth quarter operating expenses increased when compared
to the prior-year quarter due to higher costs associated with mining and processing more ore tonnes. Quarterly total cash costs
decreased by $106 per ounce due to an increase in by-product revenues relative to the prior-year quarter, which was only partially
offset by increased operating expenses. All-in sustaining costs increased due to a $3 million, or $193 per ounce, increase in sustaining
costs, which was only partially offset by the decrease in total cash costs.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">2016 full-year gold production decreased by 7% relative to
the prior year as a planned increase in mill throughput was offset by an expected decrease in gold grade. Gold recovery remained
in line with the prior year, despite the lower gold grade and increased throughput, as a result of the company's successful completion
of the mill expansion project in mid-2015. New Afton's full-year gold production achieved the high end of its guidance range of
90,000 to 100,000 ounces.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">2016 full-year copper production was consistent with the prior
year. Similar to gold production, the higher mill throughput offset a slight decrease in copper grade, while copper recovery remained
consistent with 2015. New Afton's full-year copper production exceeded the high end of its guidance range of 75 to 85 million pounds.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Operating expenses increased in 2016 due to higher costs associated
with mining and processing additional ore tonnes. Total cash costs increased by $90 per ounce due to a $3 million, or $30 per ounce,
decrease in by-product revenues resulting from lower copper prices, coupled with increased operating expenses. All-in sustaining
costs remained in line with the prior year as the increase in total cash costs was largely offset by an $8 million, or $66 per
ounce, decrease in sustaining costs. &nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Afton's 2016 full-year costs were approximately $330 per
ounce below the guidance ranges of ($335) to ($295) per ounce for total cash costs and $95 to $135 per ounce for all-in sustaining
costs. The $330 per ounce decrease in costs relative to guidance was due to the combined benefit of copper production being above
the high end of the guidance range and the realized copper price being above the guidance assumption, which was only partially
offset by the appreciation of the Canadian dollar relative to the assumption used when setting guidance.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Afton's 2016 co-product cash costs of $526 per gold ounce
and $0.94 per copper pound met the guidance ranges of $505 to $545 per gold ounce and $0.90 to $1.05 per copper pound. Co-product
all-in sustaining costs also achieved their guidance ranges of $660 to $700 per gold ounce and $1.20 to $1.35 per copper pound.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Mesquite </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Three months ended December 31</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Year ended December 31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>39,353</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">43,389</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>111,123</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">134,868</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>38,366</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">44,474</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>113,843</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">133,712</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expenses:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>660</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">621</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>628</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">734</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Total cash costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>670</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">631</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>638</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">743</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>771</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">869</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>979</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,156</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">As expected, Mesquite's fourth quarter was the mine's strongest
quarter of the year. Fourth quarter production benefitted from higher tonnes placed on the leach pad, which was offset by lower
grade material being mined relative to the prior-year quarter.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Fourth quarter operating expenses were in line with the prior-year
quarter. Operating expense per ounce and total cash costs increased relative to the prior-year quarter due to lower gold sales
volumes. Fourth quarter all-in sustaining costs decreased due to a $7 million, or $137 per ounce, decrease in sustaining costs,
which was only partially offset by the slight increase in total cash costs.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Despite Mesquite's strong fourth quarter, 2016 production
decreased by 18% relative to the prior year primarily due to the lower recoveries associated with the transition material that
was mined in 2016. Consistent with the company's previously disclosed expectations, Mesquite's full-year production came in below
the low end of its 2016 guidance range of 130,000 to 140,000 ounces.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">2016 full-year operating expenses and total cash costs decreased
due to lower diesel prices, the company's business improvement initiatives and a higher portion of mining costs being capitalized
to leach pad inventory. All-in sustaining costs decreased relative to 2015 due to a $16 million, or $72 per ounce, decrease in
sustaining costs, resulting from lower capitalized stripping and the decrease in total cash costs. &nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Mesquite's 2016 total cash costs were slightly above the guidance
range of $590 to $630 per ounce due to lower gold sales volumes. 2016 all-in sustaining costs were below the guidance range of
$1,015 to $1,055 per ounce, resulting from lower capitalized stripping.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Peak Mines</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Three months ended December 31</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Year ended December 31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>18,587</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">34,798</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>107,449</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">89,852</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>18,049</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">34,690</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>103,396</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">89,265</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper (millions of pounds):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>4.2</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">3.7</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>15.0</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">14.0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>3.5</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">3.3</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>14.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">13.2</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expenses:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>815</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">591</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>695</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">830</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.62</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.14</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.20</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.77</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Total cash costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>662</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">552</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>590</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">791</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>742</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">706</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>736</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,071</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Fourth quarter production decreased relative to the prior-year
quarter, which benefitted from the mining and processing of significantly higher gold grade material. Quarterly copper production
increased by 13% when compared to the fourth quarter of 2015 due to higher copper grade.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Fourth quarter operating expenses were in line with the prior-year
quarter. Operating expense per ounce and total cash costs increased compared to the prior-year quarter primarily due to lower gold
sales volumes. All-in sustaining costs increased during the quarter as the increase in total cash costs was only partially offset
by a $4 million, or $64 per ounce, decrease in sustaining costs.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">In 2016, Peak Mines had a strong year both operationally and
financially. Full-year gold production was 20% higher than 2015 and the mine's 2016 guidance range of 80,000 to 90,000 ounces.
The increase in production relative to 2015 was due to higher gold grade and increased productivity realized through business improvement
initiatives which led to higher throughput. Peak Mines' 2016 copper production was also above the prior year and almost double
the mine's 2016 guidance range of 6 to 8 million pounds due to the combined benefit of higher throughput, copper grade and recovery.&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Full-year operating expenses decreased due to lower total
tonnes mined as 2015 included higher than normal waste mining stemming from the seismic challenges encountered at depth. Total
cash costs decreased relative to 2015 due to the lower operating expenses and higher gold sales volumes. All-in sustaining costs
decreased substantially due to the combined benefit of lower total cash costs, coupled with a $10 million, or $134 per ounce, decrease
in sustaining costs.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Peak Mines' 2016 costs were well below the guidance ranges
of $800 to $840 per ounce for total cash costs and $1,020 to $1,060 per ounce for all-in sustaining costs. Full-year costs were
lower due to the mine's strong operating performance, as well as the realized copper price being above the guidance assumption,
the benefits of which were only partially offset by the appreciation of the Australian dollar relative to the assumption used when
setting guidance.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Cerro San Pedro</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Three months ended December 31</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Year ended December 31</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2015</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>14,064</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">23,302</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>64,993</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">105,512</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>13,351</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">25,368</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>64,149</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">106,417</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Silver (millions of ounces):</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Produced</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.2</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">0.4</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.9</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Sold</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.2</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">0.4</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.9</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.5</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expense:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2,585</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,283</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,311</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">991</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Silver ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>35.87</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">17.03</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>17.68</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">13.38</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Total cash costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,014</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">868</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>933</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">865</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,045</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">883</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>959</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">879</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">As previously announced, Cerro San Pedro finished active mining
late in the second quarter of 2016 and has now transitioned into residual leaching. As a result, and consistent with expectations,
the mine's fourth quarter gold and silver production decreased compared to the prior year.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Fourth quarter operating expenses decreased when compared
to the prior-year quarter as the mine transitioned into residual leaching. However, operating expense per gold and silver ounce
increased significantly as a $24 million heap leach inventory write-down was included when calculating the operating expense per
ounce. The inventory write-down increased the quarterly operating expense by $1,528 per gold ounce and $21.20 per silver ounce.
Total cash costs increased due to lower gold sales volumes and lower by-product revenues. All-in sustaining costs were higher during
the quarter primarily due to the increase in total cash costs.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">2016 full-year gold production achieved the mid-point of the
guidance range of 60,000 to 70,000 ounces while silver production was below the guidance range of 1.3 to 1.5 million ounces.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">2016 full-year operating expenses decreased as Cerro San Pedro
mined and processed less ore. Similar to the fourth quarter, operating expense per gold and silver ounce increased as a result
of the fourth quarter heap leach inventory write-down. Consistent with the fourth quarter, total cash costs and all-in sustaining
costs increased due to lower gold sales volumes and lower by-product revenues.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Cerro San Pedro's 2016 costs were above their respective guidance
ranges of $755 to $795 per ounce for total cash costs and $765 to $805 per ounce for all-in sustaining costs primarily due to lower
by-product revenues.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>PROJECTS UPDATE<BR>
RAINY RIVER</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Development activities at New Gold's Rainy River project,
located in northwestern Ontario, continue to advance and the project is scheduled to transition from construction to operation
in the third quarter of 2017.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>RAINY RIVER &ndash; KEY HIGHLIGHTS</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">First production scheduled for September 2017</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Commercial production (60% of 21,000 tonne per day
design capacity) targeted for November 1, 2017</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Estimated 2017 development capital through November
commercial production of $515 million, inclusive of $40 million of contingency </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Approximately 24 million tonnes of overburden and
waste stripping completed to date </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 27pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Mining rate in January 2017 averaged approximately
100,000 tonnes per day</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Installation of mechanical, piping, electrical and
instrumentation in processing facilities currently over 60% complete </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Staged commissioning of processing facilities scheduled
to commence with primary crusher in March 2017</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">Dry and wet commissioning of full process facility
scheduled for August 2017</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">2017 gold production guidance &ndash; 50,000 to 60,000
ounces, including pre-commercial production of approximately 15,000 ounces </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 12pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.5pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&#183;</FONT></TD><TD><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 10pt">2017 cost guidance &ndash; operating expense of $905
to $945 per gold ounce and all-in sustaining costs of $1,200 to $1,240 per ounce</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Personnel Changes</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">As a result of the development challenges encountered at Rainy
River last year, the company has made several personnel changes to further strengthen the team as the project advances through
the final stages of development and transitions into operation later this year.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">In addition to Ray Threlkeld's active involvement in the project
as Interim Chief Operating Officer, New Gold has moved Greg Bowkett, who was previously the General Manager at the Peak Mines,
into the General Manager role at Rainy River. Mr. Bowkett has been with New Gold since 2012. Under his leadership, the Peak Mines
delivered progressively stronger operating results, culminating in 2016 when the mine had its best operating year in over ten years.
Also, New Gold has engaged Pierre L&eacute;gar&eacute; as the Project Director for the balance of construction at Rainy River.
Mr. L&eacute;gar&eacute; has over 30 years of experience in project development, including over 20 years in increasingly senior
roles at SNC-Lavalin Inc., culminating in his role as Vice President, Projects, Mining and Metallurgy from 2011 to 2013. Since
2013, he has continued to provide project management services to mining and other large scale construction projects through his
consulting company. Peter Marshall, Vice President of Projects for New Gold, will be leaving his position at the end of February,
though he will remain with New Gold as a consultant on a part-time basis through a transition period. New Gold expects to permanently
fill Mr. Marshall's role in the coming months.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Mining and Construction</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The team completed a thorough review of the project's mining
and construction plans in January and expects to have all construction activities required for start-up completed in September.
The targeted September completion is approximately three months behind the company's original target. The delay is primarily a
result of the impact of the slower than planned ramp-up of the mining rate which has extended the time required for construction
materials, in the form of waste rock and clay, to be delivered from the mine to the construction team. Approximately 24 million
tonnes of overburden and waste have been mined from the open pit through late January, and the mining rate has increased to an
average of approximately 100,000 tonnes per day. The September start-up is based on an expectation that the mining rate will continue
to increase to an average of approximately 120,000 tonnes per day over the next seven months, which includes both planned productivity
gains and the impact of changing weather conditions through the spring. New Gold will supplement its own fleet with contractors
who will mine discrete areas where mining can be performed more efficiently using smaller equipment.&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Processing Facilities</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">All of the key structural components of the process facilities
have been completed and the setting of mechanical equipment and installation of piping, electrical and instrumentation services
is well advanced. New Gold plans to complete the testing of the various components of the process facility using a staged approach,
after which the company will complete dry and wet commissioning of the full process circuit.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The primary crusher and conveyor system are 80% complete and
commissioning of the crusher is scheduled to commence in March of 2017. Thereafter, the commissioning of the ball and SAG mills
should start during the second quarter. Finally, the refining portion of the circuit should be completed and ready to begin commissioning
early in the third quarter. Dry and wet commissioning of the full process circuit is scheduled to take place in August, which should
leave approximately one month before targeted first production for any required adjustments to the circuit.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Based on the mine plan, the company will begin to stockpile
a small amount of low grade ore in the first half of 2017, which will be used during the commissioning of the mill. At the time
of the targeted September mill start-up, New Gold expects to have approximately 0.5 million tonnes of ore stockpiled, which is
equivalent to approximately 20 days of mill feed at the design capacity of 21,000 tonnes per day.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Permitting</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">After receiving approval to commence construction of the redesigned
tailings management facility from the Ontario Ministry of Natural Resources and Forestry (&quot;MNRF&quot;) in mid-November 2016,
the company has remained in regular communication with the MNRF as it relates to their review of other operational permits and
permit amendments appropriate for the project's current stage of activity.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The company also continues to work closely with Environment
and Climate Change Canada towards obtaining an amendment to Schedule 2 of the Metal Mining Effluent Regulations, required to close
two small creeks and deposit tailings, which is targeted to be received in the third quarter of 2017. However, as previously disclosed,
New Gold's redesign of the tailings management facility incorporated a starter tailings cell within the broader facility that does
not require a Schedule 2 amendment from the Federal government. The inclusion of a starter cell is an approach that has been used
at other Canadian mining operations. Based on its location and scale, the starter cell would provide capacity for approximately
six months of tailings. Once the Schedule 2 amendment is received, New Gold would need approximately three months, in good construction
weather, to complete construction of the tailings dam. In the event the Schedule 2 amendment is not received on a sufficiently
timely basis to allow for the completion of the construction of the broader tailings facility before the starter cell is full,
the company would have to consider other alternatives, which may include a slowdown or temporary suspension of operations. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>2017 Production and Cost Guidance</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Based on the company's targeted September production start,
New Gold expects total 2017 production at Rainy River to be 50,000 to 60,000 ounces. Approximately 15,000 ounces are planned for
the pre-commercial production period with revenue for this production being credited against the development capital estimate.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Over Rainy River's targeted two months of commercial production
in 2017, the operating expense is expected to be $905 to $945 per gold ounce with all-in sustaining costs expected to be $1,200
to $1,240 per ounce. Both the operating expense and all-in sustaining costs are well above the levels targeted once Rainy River
reaches full capacity. The 2017 costs are negatively impacted by lower gold sales resulting from the combination of throughput
being lower than design during commissioning and ramp-up and planned lower grade to be processed during the commissioning phase.
In addition, there is approximately $12 million, or $305 per ounce, of sustaining costs budgeted during the commercial production
period.&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Capital Expenditures</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Project spending at Rainy River during the fourth quarter
totalled $146 million, bringing 2016 full-year capital spending at the project to $465 million. The total Rainy River project development
capital spending through the end of 2016 was $777 million.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Based on a C$1.30/US$ exchange rate, the remaining capital
cost from the beginning of 2017 to the targeted November commercial production is estimated to be approximately $515 million, inclusive
of $40 million of contingency. Consistent with the project's historical month-end accounts payable balances, it is expected that
approximately $50 to $75 million of the $515 million will be payable after commercial production is achieved.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The estimated 2017 capital cost through commercial production,
including contingency, is approximately $195 million higher than New Gold's previous estimate. The key driver of this increase
is the slower than planned ramp-up in mining rates, resulting in a three-month delay in commercial production relative to&nbsp;the
company's original target. As a result of the delay, approximately $40 million of mining and site general and administrative costs
that would have previously been scheduled to be incurred during the operating period, are now shifted into the capital period.
Further, as New Gold has opened up the pit, the company has identified specific areas where there are layers of peat and basal
till that can be more efficiently mined using smaller equipment. As such, and in order to help support the targeted increase in
mining productivity going forward, the company plans to hire contractors to complete this work as well as the mining of a small
outcrop to source additional construction rock at a total incremental cost of approximately $40 million. The temporary construction
camp will also be required for an additional three months at a total cost of approximately $5 million. The balance of the increase
in capital expenditures is attributable to additional earthworks and incremental costs associated with the completion of the processing
facilities. The incremental cost for earthworks is approximately $35 million and includes additional construction costs required
for final completion of the water management pond, the tailings starter cell and the mine rock pond as well as incremental costs
associated with pit dewatering. The estimated cost to complete and commission the process facilities has increased by $35 million,
primarily as a result of the extended schedule. In addition, the company has included $40 million of contingency for the balance
of the Rainy River development.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Though the Rainy River construction has presented challenges,
New Gold continues to look forward to the expected growth in the company's production and cash flow once Rainy River transitions
into operation later this year. Rainy River has multiple important asset qualities including its great jurisdiction, significant
annual production potential, long estimated reserve life and continued exploration potential.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&quot;With a new leadership team on site at Rainy River and
a comprehensive review of the project's remaining construction schedule and commissioning plan completed, we are committed to delivering
on our updated plan at Rainy River,&quot; stated Hannes Portmann, President and Chief Executive Officer.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>FINANCIAL UPDATE</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold's 2016 year-end cash and cash equivalents were $186
million. During the fourth quarter, the company received the remaining $75 million of the stream deposit from RGLD Gold AG, a wholly-owned
subsidiary of Royal Gold Inc. (&quot;Royal Gold&quot;) and drew $100 million from its $400 million revolving credit facility. At
December 31, 2016, an additional $122 million of the facility was used to issue letters of credit for closure obligations at the
company's producing mines and development projects, leaving $178 million remaining undrawn.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">In 2016, New Gold entered into gold price option contracts
covering 120,000 ounces of its first half 2017 production, with put options at a strike price of $1,300 per ounce and call options
at a strike price of $1,400 per ounce. The company has also fixed the price for 31.7 million pounds of the company's first half
2017 copper production at $2.52 per pound. These two initiatives increase the company's cash flow certainty during a portion of
the remaining Rainy River development period. In total, the company has $364 million of available liquidity (cash plus undrawn
credit facility) plus its expected free cash flow generation from its operating mines in 2017.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold's most significant capital expenditures for 2017
will be at the Rainy River project.&nbsp; The $195 million increase in capital costs will negatively impact the company's liquidity.
Based on prevailing spot prices of gold and copper (taking into account the gold price option contracts and fixed price copper
contracts referred to above) and exchange rates as of the date of this news release, management believes that New Gold has approximately
a $100 million shortfall in the liquidity and capital resources required to pay for the company's normal operating requirements
and complete the construction of Rainy River and bring it to commercial production on the current schedule.&nbsp; Depending on
market conditions, New Gold intends to implement one or more financing alternatives, which could include the sale of non-core assets,
such as the stream on El Morro, the sale of a stream on production from the company's operations or projects, subordinated debt
or equity financing or other similar measures, to address the shortfall and provide additional working capital and financial flexibility.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">At the end of 2016, the face value of the company's long-term
debt was $900 million (book value &ndash; $890 million). The components of the long-term debt include: $300 million of 7.00% face
value senior unsecured notes due in April of 2020, $500 million of 6.25% face value senior unsecured notes due in November of 2022
and $100 million drawn from the revolving credit facility. The company currently has approximately 514 million shares outstanding.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Preliminary unaudited cash generated from operations was approximately
$280 million for the year ended December 31, 2016, and approximately $50 million for the three months ended December 31, 2016.
Preliminary unaudited cash generated from operations before changes in non-cash working capital was approximately $300 million
for the year ended December 31, 2016, and approximately $70 million for the three months ended December 31, 2016. The working capital
difference was primarily due to an outstanding concentrate receivable of approximately $20 million that was collected in January
2017.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">In 2014, New Gold exchanged its 30% holding of the Rio Figueroa
property in Chile to Antofagasta PLC for a 3% net smelter royalty (NSR). At December 31, 2016, the company recorded an impairment
charge of $6 million on the Rio Figueroa 3% NSR asset.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>2017 GUIDANCE </B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Going forward, New Gold's asset by asset cost guidance will
include operating expense per gold ounce, operating expense per copper pound and all-in sustaining costs. Operating expense per
ounce and pound apportions the company's operating expense, as shown on New Gold's consolidated income statement, to each metal
on a percentage of revenue basis. New Gold will continue to provide total cash cost guidance on a consolidated basis, but not at
the asset level.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Gold Production</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Copper Production</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Operating Expense</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Operating Expense</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 2.25pt double; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>All-in Sustaining Costs</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(thousand ounces)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(million pounds)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>($ per gold ounce)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>($ per copper pound)</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: center"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>($ per gold ounce)</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Rainy River<SUP>(1)</SUP></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">50 - 60</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$905 - $945</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$1,200 - $1,240</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">New Afton</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">70 - 80</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">85 - 95</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$405 - $445</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$0.80 - $1.00</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">($280) - ($240)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Mesquite</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">140 - 150</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$675 - $715</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$805 - $845</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Peak Mines</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">&nbsp; 85 - 95</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">~15</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$780 - $820</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$1.55 - $1.75</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">&nbsp;&nbsp; $1,060 - $1,100</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Cerro San Pedro</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">&nbsp; 35 - 45</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">$1,080 - $1,120</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD NOWRAP STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">&nbsp;&nbsp; $1,090 - $1,130</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>New Gold Consolidated</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>380 - 430</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>100 - 110</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>$630 - $670</B></FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>$1.25 - $1.45</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>$825 - $865</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="6" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Note: Estimated consolidated silver production in 2017 approximately 1.1 million ounces.</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP COLSPAN="6" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(1) Rainy River gold production guidance includes pre-commercial production of approximately 15,000 ounces. Rainy River operating expense&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="6" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">per gold ounce and all-in sustaining costs calculated based on commercial production ounces.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>CONSOLIDATED PRODUCTION AND COSTS</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold's 2017 consolidated gold production is expected to
increase relative to the prior year due to the planned September start-up of Rainy River. Consolidated gold production from New
Afton, Mesquite and the Peak Mines should remain in line with 2016 production levels, however, production at Cerro San Pedro is
scheduled to decrease as the mine enters its first full year of residual leaching. Copper production is expected to increase slightly
at New Afton due to higher copper grades, while copper production from the Peak Mines is expected to be in line with 2016. Consolidated
silver production is scheduled to remain in line with the prior year at approximately 1.1 million ounces.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Consistent with previous years, New Gold's 2017 full-year
gold production is not scheduled to be evenly distributed across the four quarters. Consolidated gold production is expected to
build steadily throughout the year with the fourth quarter benefitting from the start-up of Rainy River.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold's by-product pricing assumptions for 2017 of $2.50
per copper pound and $16.00 per silver ounce are both approximately 5% below current spot prices. The 2017 assumptions for the
Canadian dollar, Australian dollar and Mexican peso exchange rates of $1.30, $1.35 and $20.00 to the U.S. dollar, are in line with
spot exchange rates.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The company's 2017 operating expense will increase due to
the advancement of Rainy River into production, however, operating expense per gold ounce and operating expense per copper pound
should both remain in line with 2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Consolidated total cash costs for the year are expected to
increase by approximately $65 per ounce to $395 to $435 per ounce as a result of higher gross operating costs attributable to the
start-up of Rainy River, partially offset by higher by-product revenues. New Gold's 2017 all-in sustaining costs are expected to
increase by approximately $150 per ounce when compared to the $692 per ounce delivered in 2016. 2017 sustaining costs, including
sustaining capital, exploration, general and administrative and amortization or reclamation expenditures, are expected to increase
by approximately $35 million relative to the prior year with the increase in sustaining capital expenditures from the start-up
of Rainy River, and increased underground development costs at New Afton and Peak Mines, partially offset by lower capital expenditures
at Mesquite.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>New Gold 2017 All-In Sustaining Costs Key Sensitivities</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Sensitivities to silver price and the Mexican peso are not
shown as the sensitivities are limited.</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-bottom: black 2.25pt double; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Category</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Copper Price</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>CDN/USD</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 2.25pt double; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>AUD/USD</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Base Assumption</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>$2.50</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>$1.30</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>$1.35</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>Sensitivity</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>+/-$0.25</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>+/-$0.05</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>+/-$0.05</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>COST PER OUNCE IMPACT</B></FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Rainy River</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">+/-$45</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">New Afton</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">+/-$185</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">+/-$80</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Mesquite</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Peak Mines</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">+/-$40</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">--</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">+/-$50</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>New Gold Total</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>+/-$45</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>+/-$20</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>+/-$10</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>New Afton </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016 Actuals</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2017 Guidance</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>98,098</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">70,000 - 80,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper (millions of pounds)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>87.3</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">85 - 95</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expenses:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>415</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">405 - 445</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>0.74</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">0.80 - 1.00</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>(218)</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">(280) - (240)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Capital expenditures (sustaining capital) ($mm)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>38</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">55</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Capital expenditures (growth capital) ($mm)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>3</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">5</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Gold production at New Afton should decrease relative to 2016
due to an expected decrease in gold grade and recovery. The mine is expected to operate at similar throughput levels to 2016. Copper
production should remain in line with 2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Afton's 2017 operating expenses should remain in line
with 2016, while all-in sustaining costs are targeted to remain among the lowest in the industry. The decrease in all-in sustaining
costs is due to an increase in by-product revenues of approximately $35 million, or $460 per ounce, resulting from the 2017 copper
price assumption being higher than the 2016 realized price. This is partially offset by an increase in sustaining costs of approximately
$17 million, or $225 per ounce, mainly attributable to increased mine development of the B3 zone.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Mesquite </B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016 Actuals</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2017 Guidance</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>111,123</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">140,000 - 150,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expenses:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>628</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">675 - 715</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>979</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">805 - 845</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Capital expenditures (sustaining capital) ($mm)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>36</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">20</FONT></TD></TR>
<TR>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 58%">&nbsp;</TD>
    <TD STYLE="width: 17%">&nbsp;</TD>
    <TD STYLE="width: 22%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">As planned, production at Mesquite is expected to increase
relative to 2016 with gold grade increasing towards reserve grade and recoveries improving as mining has moved away from the transition
zones encountered in 2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">2017 operating expenses are expected to increase relative
to 2016 due to the combination of higher tonnes processed and no waste stripping being capitalized. Mesquite's 2017 all-in sustaining
costs are targeted to decrease due to a planned $16 million, or $110 per ounce, decrease in sustaining costs related to lower waste
stripping being capitalized as well as higher gold sales volumes.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Peak Mines</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016 Actuals</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2017 Guidance</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>107,449</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">85,000 - 95,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper (millions of pounds)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>15.0</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">~15.0</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expenses:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>695</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">780 - 820</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Copper ($/pound)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1.20</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1.55 - 1.75</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>736</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,060 - 1,100</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Capital expenditures (sustaining capital) ($mm)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>11</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">30</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Capital expenditures (growth capital) ($mm)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>--</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">10</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Gold production at the Peak Mines should decrease and remain
closer to historical levels due to lower throughput and gold grades. Copper production is expected to remain in line with 2016.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">2017 operating expenses are expected to increase as a result
of higher tonnes mined. All-in sustaining costs are targeted to increase relative to 2016 due to higher sustaining costs, related
to increased underground development, and lower gold sales volumes, partially offset by higher by-product revenues resulting from
the 2017 copper price assumption being higher than the 2016 realized price. Approximately $10 million in growth capital has been
budgeted for underground infrastructure related to the future development of Great Cobar.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Cerro San Pedro</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Arial, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2016 Actuals</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>2017 Guidance</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold (ounces)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>64,993</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">35,000 - 45,000</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Operating expenses:</FONT></TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Gold ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1,311</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,080 - 1,120</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">All-in sustaining costs ($/ounce)</FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>959</B></FONT></TD>
    <TD STYLE="padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1,090 - 1,130</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding: 1.5pt"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">Capital expenditures (sustaining capital) ($mm)</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt"><B>1</B></FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; padding: 1.5pt; text-align: right"><FONT STYLE="font-family: Arial, Helvetica, Sans-Serif; font-size: 8pt">1</FONT></TD></TR>
<TR>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 17%">&nbsp;</TD>
    <TD STYLE="width: 20%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">As Cerro San Pedro enters its first full year of residual
leaching in 2017, gold and silver production is expected to decline and all-in sustaining costs are expected to increase as a result
of the lower gold sales volumes.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>Blackwater</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Blackwater's 2017 non-sustaining capital expenditures are
expected to be approximately $10 million related to the continued advancement of the Environmental Assessment process.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>WEBCAST AND CONFERENCE CALL</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">A webcast and conference call to discuss these results will
be held on Monday, January 30, 2017 beginning at 9:00 a.m. Eastern time. Participants may join the webcast by registering on our
website at www.newgold.com. You may also listen to the conference call by calling toll free 1-888-231-8191, or 1-647-427-7450 outside
of the U.S. and Canada. A recorded playback of the conference call will be available until February 28, 2017 by calling toll free
1-855-859-2056, or 1-416-849-0833 outside of the U.S. and Canada, passcode 60560458. An archived webcast will also be available
until April 30, 2017 at www.newgold.com. &nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>UPCOMING EVENTS</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold plans to release its year-end 2016 financial results
after market close on Wednesday, February 15, 2017. A webcast and conference call to discuss these results will be held on Thursday,
February 16, 2017 at 10:00 a.m. Eastern time. Participants may listen to the webcast by registering on our website at www.newgold.com.
You may also listen to the conference call by calling toll free 1-888-231-8191, or 1-647-427-7450 outside of the U.S. and Canada.
A recorded playback of the conference call will be available until March 15, 2017 by calling toll free 1-855-859-2056, or 1-416-849-0833
outside of the U.S. and Canada, passcode 62154111. An archived webcast will also be available until May 15, 2017 at www.newgold.com.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold plans to host its Annual Investor Day in May at which
point the company will provide an update on first quarter results as well as the continuing progress at Rainy River.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>ABOUT NEW GOLD INC.</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">New Gold is an intermediate gold mining company. The company
has a portfolio of four producing assets and two significant development projects. The New Afton Mine in Canada, the Mesquite Mine
in the United States, the Peak Mines in Australia and the Cerro San Pedro Mine in Mexico (which transitioned to residual leaching
in 2016), provide the company with its current production base. In addition, New Gold owns 100% of the Rainy River and Blackwater
projects, both in Canada, as well as a 4% gold stream on the El Morro project located in Chile. New Gold's objective is to be the
leading intermediate gold producer, focused on the environment and social responsibility. For further information on the company,
please visit www.newgold.com. &nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">Certain information contained in this news release, including
any information relating to New Gold's future financial or operating performance are &quot;forward looking&quot;. All statements
in this news release, other than statements of historical fact, which address events, results, outcomes or developments that New
Gold expects to occur are &quot;forward-looking statements&quot;. Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the use of forward-looking terminology such as &quot;plans&quot;, &quot;expects&quot;,
&quot;is expected&quot;, &quot;budget&quot;, &quot;scheduled&quot;, &quot;targeted&quot;, &quot;estimates&quot;, &quot;forecasts&quot;,
&quot;intends&quot;, &quot;anticipates&quot;, &quot;projects&quot;, &quot;potential&quot;, &quot;believes&quot; or variations of
such words and phrases or statements that certain actions, events or results &quot;may&quot;, &quot;could&quot;, &quot;would&quot;,
&quot;should&quot;, &quot;might&quot; or &quot;will be taken&quot;, &quot;occur&quot; or &quot;be achieved&quot; or the negative
connotation of such terms. Forward-looking statements in this news release include the statements made under &quot;2017 Guidance&quot;
and &quot;Project Update Rainy River-2017 Production and Cost Guidance&quot;, as well as other statements elsewhere in this news
release, including, among others, statements with respect to: guidance for production, operating expense, total cash costs and
all-in sustaining costs, and the factors contributing to those expected results, as well as expected capital and other expenditures;
planned development activities for 2017 at the Rainy River project, including the completion and commissioning of the processing
facilities; planned preparations for operations at the Rainy River project, including the mining rate, removal of overburden and
waste, and storage of water, and stock piling of ore prior to first production ; the expected production, costs, economics, grade
and other operating parameters of the Rainy River project; the capacity of the starter dam; the expected production, costs, economics
and operating parameters of the Rainy River project; the capacity of the starter dam; targeted timing for permits, including the
amendment to Schedule 2 of the Metal Mining Effluent Regulations; targeted timing for commissioning, start-up, production and commercial
production; and targeting timing for development and other activities related to the Rainy River project.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">All forward-looking statements in this news release are based
on the opinions and estimates of management as of the date such statements are made and are subject to important risk factors and
uncertainties, many of which are beyond New Gold's ability to control or predict. Certain material assumptions regarding such forward-looking
statements are discussed in this news release, New Gold's annual and quarterly management's discussion and analysis (&quot;MD&amp;A&quot;),
its Annual Information Form and its Technical Reports filed at www.sedar.com. In addition to, and subject to, such assumptions
discussed in more detail elsewhere, the forward-looking statements in this news release are also subject to the following assumptions:
(1) there being no significant disruptions affecting New Gold's operations; (2) political and legal developments in jurisdictions
where New Gold operates, or may in the future operate, being consistent with New Gold's current expectations; (3) the accuracy
of New Gold's current mineral reserve and mineral resource estimates; (4) the exchange rate between the Canadian dollar, Australian
dollar, Mexican peso and U.S. dollar being approximately consistent with current levels; (5) prices for diesel, natural gas, fuel
oil, electricity and other key supplies being approximately consistent with current levels; (6) equipment, labour and materials
costs increasing on a basis consistent with New Gold's current expectations; (7) arrangements with First Nations and other Aboriginal
groups in respect of the Rainy River project being consistent with New Gold's current expectations; (8) all required permits, licenses
and authorizations, including the amendment to Schedule 2 of the Metal Mining Effluent Regulations, being obtained from the relevant
governments and other relevant stakeholders within the expected timelines; (9) the results of the feasibility study for the Rainy
River project being realized; and (10) in the case of production, cost and expenditure outlooks at the operating mines and the
Rainy River project for 2017, commodity prices and exchange rates being consistent with those estimated for the purposes for 2017.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">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 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: significant capital requirements and the availability and management of capital
resources; additional funding requirements; price volatility in the spot and forward markets for metals and other commodities;
fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States,
Australia and Mexico; discrepancies between actual and estimated production, between actual and estimated mineral reserves and
mineral resources and between actual and estimated metallurgical recoveries; fluctuation in treatment and refining charges; changes
in national and local government legislation in Canada, the United States, Australia and Mexico 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 and&nbsp;maintaining the validity and enforceability of the necessary licenses and permits and complying
with the permitting requirements of each jurisdiction in which New Gold operates, including, but not limited to: in Canada, obtaining
the necessary permits for the Rainy River project; and in Mexico, where Cerro San Pedro has a history of ongoing legal challenges
related to our environmental authorization; the lack of certainty with respect to foreign legal systems, which may not be immune
from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law; the uncertainties
inherent to current and future legal challenges New Gold is or may become a party to; diminishing quantities or grades of mineral
reserves and mineral resources; competition; inherent uncertainties with cost estimates and estimated schedule for the construction
and commencement of production at Rainy River as contemplated; loss of key employees; rising costs of labour, supplies, fuel and
equipment; actual results of current exploration or reclamation activities; uncertainties inherent to mining economic studies including
the feasibility studies for the Rainy River project; changes in project parameters as plans continue to be refined; accidents;
labour disputes; defective title to mineral claims or property or contests over claims to mineral properties; unexpected delays
and costs inherent to consulting and accommodating rights of Indigenous groups; risks, uncertainties and unanticipated delays associated
with obtaining and maintaining necessary licenses, permits and authorizations and complying with permitting requirements, including
those associated with the amendment to Schedule 2 of the Metal Mining Effluent Regulations for the Rainy River Project. In addition,
there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental
events and hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses
and risks associated with the start of production of a mine, such as Rainy River, (and the risk of inadequate insurance or inability
to obtain insurance to cover these risks) as well as &quot;Risk Factors&quot; included in New Gold's disclosure documents filed
on and 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 news 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.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>TECHNICAL INFORMATION</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">The scientific and technical information contained herein
has been reviewed and approved by Mark A. Petersen, Vice President, Exploration of New Gold, except for the scientific and technical
information regarding capital costs at Rainy River set out under the heading &quot;Projects Update - Rainy River - Capital Expenditures&quot;,
which has been reviewed and approved by Arshya Qureshi, Co-Founder and Project Manager at&nbsp; LQ Consulting and Management Inc.
Mr. Qureshi is a Professional Engineer registered with Professional Engineers of Ontario. Mr. Petersen is a SME Registered Member,
AIPG Certified Professional Geologist. Mr. Petersen and Mr. Qureshi are &quot;Qualified Persons&quot; for the purposes of NI 43-101.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">For additional technical information on New Gold's material
properties, including a detailed breakdown of Mineral Reserves and Mineral Resources by category, as well as key assumptions, parameters
and risks, refer to New Gold's Annual Information Form for the year ended December 31, 2015 filed on www.sedar.com.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0"><B>NON-GAAP MEASURES</B></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">(1) ALL-IN SUSTAINING COSTS<BR>
&quot;All-in sustaining costs&quot; per ounce is a non-GAAP financial measure. Consistent with guidance announced in 2013 by the
World Gold Council, an association of various gold mining companies from around the world of which New Gold is a member, New Gold
defines &quot;all-in sustaining costs&quot; per ounce as the sum of total cash costs, capital expenditures that are sustaining
in nature, corporate general and administrative costs, capitalized and expensed exploration that is sustaining in nature and environmental
reclamation costs, all divided by the ounces of gold sold to arrive at a per ounce figure. New Gold believes this non-GAAP financial
measure provides further transparency into costs associated with producing gold and assists analysts, investors and other stakeholders
of the company in assessing the company's operating performance, its ability to generate free cash flow from current operations
and its overall value. This data is furnished to provide additional information and is a non-GAAP financial measure. All-in sustaining
costs presented do not have a standardized meaning under IFRS and may not be comparable to similar measures presented by other
mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance
with IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS. Further
details regarding historical all-in sustaining costs and a reconciliation to the nearest IFRS measures are provided in the MD&amp;A
accompanying New Gold's financial statements filed from time to time on www.sedar.com.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">&quot;Sustaining costs&quot; is a non-GAAP financial measure.
New Gold defines sustaining costs as the difference between all-in sustaining costs and total cash costs, being the sum of net
capital expenditures that are sustaining in nature, corporate general and administrative costs, capitalized and expensed exploration
that is sustaining in nature, and environmental reclamation costs.&nbsp; Management uses sustaining costs to understand the aggregate
net result of the drivers of all-in sustaining costs other than total cash costs.&nbsp; The line items between cash costs and all
in sustaining costs in the tables below break down the components of sustaining costs.&nbsp; Sustaining costs is intended to provide
additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures
presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared
in accordance with IFRS.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">(2) TOTAL CASH COSTS<BR>
&quot;Total cash costs&quot; per ounce is a non-GAAP financial measure which is calculated in accordance with a standard developed
by The Gold Institute, a worldwide association of suppliers of gold and gold products that ceased operations in 2002. 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 costs on a sales basis. The company believes that certain investors use this information
to evaluate the company's performance and ability to generate liquidity through operating cash flow to fund future capital expenditures
and working capital needs.&nbsp; This measure, along with sales, is considered to be a key indicator of the company's ability to
generate operating earnings and cash flow from its mining operations. Total cash costs include mine site operating costs such as
mining, processing and administration costs, royalties, production taxes, and realized gains and losses on fuel contracts, but
are exclusive of amortization, reclamation, capital and exploration costs and net of by-product sales. Total cash costs are then
divided by ounces of gold sold to arrive at a per ounce figure. Co-product cash costs remove the impact of other metal sales that
are produced as a by-product of gold production and apportion the cash costs to each metal produced on a percentage of revenue
basis, and subsequently divides the amount by the total ounces of gold or silver or pounds of copper sold, as the case may be,
to arrive at per ounce or per pound figures. Unless otherwise indicated, all total cash cost information in this news release is
net of by-product sales. This data is furnished to provide additional information and is a non-GAAP financial measure. Total cash
costs and co-product cash costs presented do not have a standardized meaning under IFRS and may not be comparable to similar measures
presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared
in accordance with IFRS and is not necessarily indicative of cash flow from operations under IFRS or operating costs presented
under GAAP. Further details regarding historical total cash costs and a reconciliation to the nearest IFRS measures are provided
in the MD&amp;A accompanying New Gold's financial statements filed from time to time on www.sedar.com.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">(3) AVERAGE REALIZED PRICE<BR>
&quot;Average realized price per ounce or pound sold&quot; is a non-GAAP financial measure with no standard meaning under IFRS.
Management uses this measure to better understand the price realized in each reporting period for gold, silver, and copper sales.
Average realized price is intended to provide additional information only and does not have any standardized definition under IFRS;
it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other
companies may calculate this measure differently and this measure is unlikely to be comparable to similar measures presented by
other companies. Further details regarding average realized price and a reconciliation to the nearest IFRS measure is provided
in the MD&amp;A accompanying New Gold's financial statements filed from time to time on www.sedar.com.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">(4) CASH GENERATED FROM OPERATIONS BEFORE CHANGES IN WORKING
CAPITAL<BR>
&quot;Cash generated from operations before changes in working capital&quot; is a non-GAAP financial measures with no standard
meaning under IFRS, excludes changes in non-cash operating working capital. Management uses this measure to evaluate the Company's
ability to generate cash from its operations before temporary working capital changes. Further details regarding cash generated
from operations before changes in working capital and a reconciliation to the nearest IFRS measure is provided in the MD&amp;A
accompanying New Gold's financial statements filed from time to time on www.sedar.com.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">SOURCE New Gold Inc.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">To view this news release in HTML formatting, please use the
following URL: http://www.newswire.ca/en/releases/archive/January2017/30/c2615.html</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">%CIK: 0000800166</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0"><B>For further information:</B> Julie Taylor, Director, Corporate
Communications and Investor Relations, Direct: +1 (416) 324-6015, Email: info@newgold.com</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">CO: New Gold Inc.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 9.75pt 0">CNW 07:30e 30-JAN-17</P>



<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0pt 0 12pt"><B>&nbsp;</B></P>

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