New Gold announces feasibility study results for mine

News Release
New Gold

(All figures are in US dollars unless otherwise indicated)
January 16, 2014 – New Gold Inc. (“New Gold”) (TSX:NGD) and (NYSE MKT:NGD) today announces the results of its Feasibility Study for the Rainy River project (“Rainy River” or the “Project”) in Ontario, Canada. The company successfully completed the acquisition of Rainy River Resources Ltd. (“Rainy River Resources”) on October 16, 2013. Through the second half of 2013, New Gold’s development team worked with third party consultants to complete its Feasibility Study for the Project. The purpose was to ensure that the key inputs and assumptions used for Rainy River were consistent with those used for New Gold’s other projects and operations. This Feasibility Study builds upon the study completed and filed by Rainy River Resources on May 24, 2013.
-First nine years – average annual gold production of 325,000 ounces at total cash costs(1) of $613 per ounce and all-in sustaining costs(2) of $736 per ounce
-First nine years – average mill head grade of 1.44 grams per tonne gold
-Life-of-mine gold and silver production of 3.4 million ounces and 6.0 million ounces at total cash costs(1) of $663 per ounce and all-in sustaining costs(2) of $765 per ounce
-Base case economics – at $1,300 per ounce gold, $22.00 per ounce silver and a 0.95 US$/C$ foreign exchange rate, Rainy River has a pre-tax 5% net present value (“NPV”) of $438 million, an internal rate of return (“IRR”) of 13.1% and a payback period of 5.4 years
-Alternative case economics – at $1,600 per ounce gold, $26.00 per ounce silver and a parity US$/C$ foreign exchange rate, Rainy River has a pre-tax 5% NPV of $1.0 billion, an IRR of 21.1% and a payback period of 3.6 years
-Development capital costs of $885 million inclusive of a $70 million contingency
-Targeted commissioning in late 2016 with first year of full production in 2017
-14-year mine life with direct processing of open pit and underground ore, at a rate of 21,000 tonnes per day (“tpd”), for first nine years and processing of a combination of stockpile and underground ore thereafter
“We are very pleased to have completed the Feasibility Study for our Rainy River project,” stated Randall Oliphant, Executive Chairman of New Gold. “The results of the study are entirely consistent with our expectations when we decided to acquire Rainy River Resources. The Project provides our company with an asset that meets all of our key criteria including: solid returns with strong leverage to higher gold prices, manageable capital costs, a robust, long-lived production base with continued regional exploration potential, below industry average costs, and located in a great mining jurisdiction.”
“The project team has done a great job advancing Rainy River to this stage,” added Robert Gallagher, President and Chief Executive Officer of New Gold. “In parallel with this Feasibility Study, the Environmental Assessment report has also been finalized and is scheduled to be released in the coming days for regulatory agency and stakeholder review. We look forward to progressing the Project further through 2014.”