Investor day presentation february 2014

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Investor day presentation february 2014

  1. 1. Investor Day 2014 February 6, 2014
  2. 2. Agenda – February 6, 2014 10:00 – 11:30am Investor Day Presentation including Q&A 11:30 – 12:00pm Additional discussion and Q&A 12:00 – 1:00pm Lunch 2
  3. 3. Discussion topics Introduction and company overview Randall Oliphant 2013 operational results Ernie Mast 2014 outlook Ernie Mast/ Brian Penny Development projects Robert Gallagher Health, safety and corporate social responsibility Robert Gallagher 2013 year-end reserves, resources and exploration Mark Petersen New Afton performance review, expansion project details and C-zone update Kurt Keskimaki/ Mark Petersen Conclusion Randall Oliphant 3
  4. 4. Cautionary statements All monetary amounts in U.S. dollars unless otherw ise stated Total cash costs shown net of by-product sales unless otherwise stated CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain information contained in this presentation, including any information relating to New Gold’s future financial or operating performance are “forward looking”. All statements in this presentation, other than statements of historical fact, which address events or developments that New Gold expects to occur are “forward-looking statements”. 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 “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “projects”, “potential”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation of such terms. Forward-looking statements in this presentation include, among others, statements with respect to: guidance for production, cash costs and all-in sustaining costs (and its components) and for growth capital expenditures, including the expected drivers of those figures and the nature and amount of particular expected expenditures; the expected throughput and recovery rates at New Afton; planned modifications to the New Afton Mine and mill, the expected timeline, outcomes, cost and payback period of any such modifications; planed modifications to other operations; expected future mining activities; planned exploration expenditures (and their accounting treatment) and drilling activities and costs; exploration potential and the goals and expected results of future exploration activities; the estimation of mineral reserves and resources and the realization of such estimates; the results of the Rainy River and Blackwater feasibility studies, including the expected production, costs, stripping ratio, mining and processing method and rate, stockpiling plan, recovery rates, mine life, infrastructure, NPV, IRR and payback period (and related sensitivities associated with each project; the potential annual production, cash costs and capital costs, and the potential for a block cave, at the El Morro project; the timing of permitting activities and environmental asse ssment processes; and the timeline for development of Rainy River, including targeted timing for commissioning and full production. All forward-looking statements in this presentation 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 our forward-looking statements are discussed in this presentation, New Gold’s MD&A, 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 presentation 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 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) labour and material costs increasing on a basis consistent with New Gold’s current expectations; (7) permitting and arrangements with First Nations and other Aboriginal groups in respect of Rainy River and Blackwater being consistent with New Gold’s current expectations; (8) all environmental approvals (including the environmental asse ssment process for the Blackwater and Rainy River projects), required permits, licenses and authorizations being obtained from the relevant governments and other relevant stakeholders within the expected timelines; and (9) the results of the feasibility studies for the Rainy River and Blackwater projectsbeing realized. 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; price volatility in the spot and forward markets for commodities; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States, Australia, Mexico and Chile; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local government legislation in Canada, the United States, Australia, Mexico and Chile or any other country in which 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 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 Blackwater and Rainy River projects; in Mexico, where Cerro San Pedro has a history of ongoing legal challenges related to our environmental authorization (EIS); and in Chile, where the courts have temporarily suspended the approval of the environmental permit for El Morro; 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 reserves and resources; competition; loss of key employees; additional funding requirements; 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 Rainy River and Blackwater; 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 First Nations and other Aboriginal groups; uncertainties with respect to obtaining all necessary surface and other land use rights or tenure for Rainy River; 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 environmental assessment processe s for Blackwater and Rainy River. 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 the risk of inadequate insurance or inability to obtain insurance to cover these risks) a s well as “Risk Factors” 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 presentation 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. The preliminary information provided for production, sales, total cash costs(1) and all-in sustaining costs(2) are approximate figures and may differ from the final results in the 2013 annual audited financial statements and management’s discussion and analysis. The footnotes to this presentation contain important information, refer to appendices and endnotes found at the end of the presentation. For those viewing the webcast, the full presentation including appendices and endnotes isavailable on New Gold’s website at www.newgold.com.
  5. 5. New Gold investment thesis Portfolio of assets in top-rated jurisdictions Invested and experienced team Among lowest-cost producers with established track record Peer-leading growth pipeline A history of value creation 18.5 Moz gold reserves ~$80 million investment by Board & Management Targeting ~$825/oz all-in sustaining costs(1) ~900 Koz annual production potential from growth projects +300% increase in share price since 2009 1. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 5
  6. 6. 2013 highlights OPERATIONS $44/oz REDUCTION IN TOTAL CASH COSTS(1) EXPLORATION/DEVELOPMENT +127% Gold Reserves PER SHARE • New Afton achieved ramp-up ahead of schedule +22% • Lowest total cash costs(1) in company history Gold M&I Resources(2) PER SHARE • Achieved updated production outlook Largest Gold Reserve in New Gold’s History CORPORATE DEVELOPMENT COMPLETED RAINY RIVER ACQUISITION • Minimal dilution - 5.5% increase in shares outstanding • Increased Canadian footprint BALANCE SHEET $414 million in cash at end of 2013 Prioritizing lower capital cost Rainy River project • 325 Koz annual production potential at low cost • Continued exploration potential 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Resources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves. 6
  7. 7. Collectively ~$80 million invested in New Gold BOARD OF DIRECTORS David Emerson Former Canadian Cabinet Minister James Estey Former Chairman, UBS Securities Canada Robert Gallagher President & Chief Executive Officer Vahan Kololian Founder, Terra Nova Partners Martyn Konig Former Executive Chairman, European Goldfields Pierre Lassonde Chairman, Franco-Nevada Randall Oliphant Executive Chairman Raymond Threlkeld Mining Consultant 7
  8. 8. Portfolio of assets in top-rated jurisdictions Mining investment – country rankings (1) Blackwater Mine Life: 17 years New Afton Mine Life: 10 years Rainy River #2 Mine Life: 14 years Mesquite Mine Life: 8+ years Cerro San Pedro Mine Life: 2+ years El Morro Mine Life: 17 years Peak Mines Mine Life: 6+ years CANADA #6 UNITED STATES #5 MEXICO #3 CHILE #1 AUSTRALIA OPERATING DEVELOPMENT 1. Rankings based on 25 countries evaluated in 2013 Behre Dolbear Report – 2013 Ranking of Countries for Mining Investm ent: “Where Not to Invest”. 8
  9. 9. Lowest costs in company’s history FOURTH QUARTER AND FULL YEAR 2013 • • • • Fourth quarter was the highest production quarter of 2013 Met full year production and cost outlook 2013 lowest total cash costs (1) in New Gold’s history Fourth quarter and full year total cash costs (1) and all-in sustaining costs (2) further establish company’s low cost profile GOLD PRODUCTION (Koz) 398 107 Q4'13 FY 2013 TOTAL CASH COSTS(1) ($/oz) $377 $316 Q4'13 FY 2013 ALL-IN SUSTAINING COSTS(2) ($/oz) $883 Q4'13 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. $899 FY 2013 9
  10. 10. Significant increase in gold reserves per share • Gold reserves increased by 10.7 million ounces during the year • • Attributable to establishing Blackwater reserves and accretive acquisition of Rainy River GOLD RESERVES(1) (Moz) 18.5 +127% per share 7.8 YE 2012 Silver reserves increased by 58.8 million ounces and copper reserves remained significant at 3.0 billion pounds YE 2013 GOLD M&I RESOURCES(1) (Moz) +22% per share 27.5 21.4 YE 2012 YE 2013 1. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Res ources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves. 10
  11. 11. Strong balance sheet • Face value $878 million in long-term debt(3) • Undrawn Credit Facility (2) Liquidity Position $414 mm • Face value $500 million, 6.25% notes due in 2022 • Cash and Equivalents (1) Face value $300 million, 7.00% notes due in 2020 $78 million in carried El Morro loan, payable out of El Morro project cash flow $100 mm $514 mm 1. Cash and equivalents as at Decem ber 31, 2013. 2. $50 m illion of total $150 m illion at year-end used for Letters of Credit. 3. See Appendix 1 – Sum ary of debt for detailed breakdown of com m ponents of debt. 11
  12. 12. 2014 consolidated guidance 2013 ACTUAL • • • • Continued gold production increases at New Afton offset by lower production forecast at Cerro San Pedro 2014 GUIDANCE Gold production(1) 380 – 420 Koz 398 Koz Copper production to increase by approximately 12 percent Total cash costs(2) Depreciation of Canadian and Australian dollars benefits New Gold costs $320 – $340/oz $377/oz Total cash costs (2) and all-in sustaining costs (3) well below industry average All-in sustaining costs(3) $899/oz $815 – $835/oz 1. Gold sales expected to be in the sam range as production. e 2. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. All total cash cost estim ates (excluding historical am ounts) in this presentation assum com odity price assum e m ptions of: Gold - $1,300 per ounce, Silver - $20.00 per ounce, Copper - $3.25 per pound, and CDN/USD - $1.11, AUD/USD - $1.14, MXN/USD - $13.00. 3. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. All all-in sustaining cost estim ates (excluding historical am ounts) in this presentation assum com odity price assum e m ptions of: Gold - $1,300 per ounce, Silver - $20.00 per ounce, Copper - $3.25 per pound, and CDN/USD - $1.11, AUD/USD - $1.14, MXN/USD - $13.00. 12
  13. 13. Among lowest cost producers in industry New Gold versus Industry Average Total Cash Costs(1) $782(2) Industry $478 $465 Incremental Benefit to NGD Shareholder $377 2009 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. New Gold total cash costs as at year-end 2013. 2. Industry data per GFMS reports calculated net of by-product credits for the nine m onths ended Septem ber 2013. New Gold 2013 13
  14. 14. 2014 estimated all-in sustaining costs Total cash costs (1) ~$330/oz General and administrative (2) ~$90/oz Exploration expense ~$35/oz Sustaining capital(3) ~$370/oz ALL-IN SUSTAINING COSTS(4) 1. 2. 3. 4. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. General and adm inistrative includes stock-based com pensation and asset retirem ent obligation. Sustaining capital based on New Gold’s total 2014 estim ated capital expenditures excluding expenditures related to growth-related initiatives. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. ~$825/oz 14
  15. 15. New Afton – A special asset Jurisdiction Production 102-112 British Columbia, Canada Gold (Koz) 87 2013 2014E 78-84 Country Ranking(1) #2 Copper (Mlbs) 2015 to benefit further from mill expansion 72 2013 2014E NEW AFTON Upside Contribution First nine months of 2013 earnings from mine operations New Afton Near-term mill expansion Longer-term C-zone potential = +58% 1. Rankings based on 25 countries evaluated in 2013 Behre Dolbear Report – 2013 Ranking of Countries for Mining Investm ent: “Where Not to Invest”. 15
  16. 16. Peer-leading growth pipeline • • • Growth projects’ production potential equivalent to over 2x today’s production Blackwater and Rainy River acquisitions increased shares outstanding by 25% in total for potential ~175% increase in production Rainy River and Blackwater benefit significantly from Canadian dollar depreciation Organic projects +900 Koz (1) per year Future Organic Growth Potential New Afton Expansion El Morro Blackwater Rainy River Four current operations 2014E Gold Production • Rainy River $0.05 change in exchange rate equivalent to $141 million/2.8% change in pre-tax NAV/IRR • Blackwater $0.05 change in exchange rate equivalent to $270 million/1.9% change in pre-tax NAV/IRR 1. Based on ~325Koz annual production from Rainy River, ~485Koz annual production from Blackwater and ~90Koz annual production from El Morro as outlined in the feasibility studies for the projects. 16
  17. 17. A history of value creation Cumulative five-year share price outperformance versus gold price and S&P/TSX Global Gold Index New Gold (NYSE) Gold Price S&P/TSX Global Gold 310% Index(1) 168% 155% 24% 23% 42% 30% 34% 3% 10% 9% 7% (14%) (16%) (28%) (52%) 2009 2010 1. S&P/TSX Global Gold Index includes 37 gold com panies in various stages of developm ent/producti on. 2011 2012 (52%) 2013 (35%) Since January 2009 17
  18. 18. 2013 operational results 18
  19. 19. 2013 operations summary • Achieved target throughput of 12,000 tonnes per day ahead of schedule New Afton • During fourth quarter, 62 days at throughput rate above 12,500 tonnes per day • Exceeded production guidance • Negative model reconciliation led to mining of lower grade ore and updated production outlook Mesquite • Deeper areas of pit not as well defined • Conducted infill drilling late in 2013 to support mine planning • Slightly below production outlook range • Achieved record annual throughput Peak Mines • Gold production increased by 5% over the prior year • Achieved production guidance • Pit wall movement led to adjusted 2013 mine plan and updated production outlook Cerro San Pedro • Mined lower grade ore at lower recoveries • Fourth quarter began to demonstrate increased recoveries • Above high end of production outlook range 19
  20. 20. 2013 consolidated operational results GOLD PRODUCTION (Koz) SILVER PRODUCTION (Moz) COPPER PRODUCTION (Mlbs) 398 1.6 85 • High end of outlook • New Afton and Peak Mines met guidance • In line with outlook • High end of guidance TOTAL CASH COSTS(1) ($/oz) ALL-IN SUSTAINING COSTS(2) ($/oz) $377 $899 • In line with outlook • In line with outlook 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 20
  21. 21. 2013 fourth quarter mine-by-mine operating results • • New Afton continues to perform well Mesquite had strongest quarter of 2013 as planned with higher grades 2013 FOURTH QUARTER Gold production (Koz) Total cash costs (1) ($/oz) All-in sustaining costs (2) ($/oz) • Peak Mines all-in sustaining costs (2) decreased by over $200 per ounce from third quarter of 2013 Cerro San Pedro achieved higher recoveries in each consecutive month during the quarter 25 ($1,428) $12 Mesquite 35 $841 $988 Peak Mines • New Afton 24 $778 $1,106 Cerro San Pedro 22 $911 $1,076 107 $316 $883 2013 FOURTH QUARTER New Afton co-product cash costs(1) Gold ($/oz) Copper ($/lb) 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. $391 $1.08 21
  22. 22. 2013 full year mine-by-mine operating results • New Afton throughput higher in each consecutive quarter during the year 2013 FULL YEAR Gold production (Koz) Total cash costs (1) ($/oz) All-in sustaining costs (2) ($/oz) New Afton • • ($1,196) ($133) Mesquite 107 $907 $1,108 Peak Mines 101 $850 $1,331 Cerro San Pedro 5% increase in gold production at Peak Mines versus previous year 87 103 $676 $766 398 $377 $899 Lowest total cash costs (1) in company’s history 2013 FULL YEAR New Afton co-product cash costs(1) Gold ($/oz) Copper ($/lb) 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. $486 $1.19 22
  23. 23. 2014 outlook 23
  24. 24. 2014 consolidated guidance GOLD PRODUCTION (Koz) SILVER PRODUCTION (Moz) COPPER PRODUCTION (Mlbs) 380 – 420 1.35 – 1.75 92 – 100 • Increased production at high margin New Afton offset by lower production at Cerro San Pedro • Consistent with 2013 • 12% increase with both New Afton and Peak Mines higher TOTAL CASH COSTS(1) ($/oz) ALL-IN SUSTAINING COSTS(2) ($/oz) $320 – $340 $815 – $835 • Decrease driven by higher copper production and depreciation of Canadian and Australian dollars • ~$75 per ounce decrease driven by lower total cash costs(1) and lower sustaining capital 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 24
  25. 25. New Afton GOLD PRODUCTION (Koz) COPPER PRODUCTION (Mlbs) OVERVIEW • Gold and copper production expected to increase due to: 102 – 112 78 – 84 • Increase in average annual throughput rate • Increase in gold grades TOTAL CASH COSTS (1) ($/oz) ALL-IN SUSTAINING COSTS (2) ($/oz) ($1,260) – ($1,240) ($620) – ($600) $440 – $460 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. KEY ASSUMPTIONS AND SENSITIVITIES • Copper price - $3.25 per pound (2013A - $3.23 per pound) • Canadian dollar: U.S. dollar exchange – $1.11 TOTAL CASH COSTS(1) Co-Product Gold ($/oz) • Costs benefit from targeted increase in copper production, depreciating Canadian dollar and decrease in sustaining capital costs Co-Product Copper ($/lb) $1.10 – $1.20 • $0.25 per pound change in copper equals ~$200 per ounce change in New Afton total cash costs • $0.01 change in Canadian dollar equals ~$15 per ounce change in New Afton total cash costs 25
  26. 26. Mesquite GOLD PRODUCTION (Koz) OVERVIEW • Production increase driven by planned mining of higher grades versus 2013 • Increase in costs attributable to increase in total tonnes mined 113 – 123 TOTAL CASH COSTS (1) ($/oz) • Peak year for sustaining capital at Mesquite ALL-IN SUSTAINING COSTS (2) ($/oz) KEY ASSUMPTIONS AND SENSITIVITIES • Diesel comprises ~25% of Mesquite’s total costs $930 – $950 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. $1,310 – $1,330 • Rack diesel price most correlated to Brent oil price • Diesel price - $3.25 per gallon • Every $0.25 per gallon change in diesel price has ~$15 per ounce impact on total cash costs 26
  27. 27. Peak Mines GOLD PRODUCTION (Koz) COPPER PRODUCTION (Mlbs) OVERVIEW • Gold production in line with 2013 • Increase in copper production a result of increased copper grade and recovery 95 – 105 14 – 16 • Decrease in total cash costs a result of increased copper by-product revenue, depreciating Australian dollar and increased productivity through lower turnover TOTAL CASH COSTS (1) ($/oz) ALL-IN SUSTAINING COSTS (2) ($/oz) KEY ASSUMPTIONS AND SENSITIVITIES • Copper price - $3.25 per pound (2013A - $3.29 per pound) $630 – $650 $1,065 – $1,085 • Australian dollar: U.S. dollar exchange – $1.14 • $0.25 per pound change in copper equals ~$40 per ounce change in Peak Mines total cash costs • $0.01 change in Australian dollar equals ~$10 per ounce change in Peak Mines total cash costs 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 27
  28. 28. Cerro San Pedro GOLD PRODUCTION (Koz) SILVER PRODUCTION (Moz) OVERVIEW • Decrease in production reflects the increased strip ratio for Phase 5 pushback and mining of lower grade ore 70 – 80 1.1 – 1.3 TOTAL CASH COSTS (1) ($/oz) ALL-IN SUSTAINING COSTS (2) ($/oz) • Increase in costs primarily driven by lower gold production, lower silver byproduct revenue and increased volume of processing reagents KEY ASSUMPTIONS AND SENSITIVITIES • Silver price - $20.00 per ounce (2013A – $23.61 per ounce) $1,030 – $1,050 $1,125 – $1,145 • Mexican peso: U.S. dollar exchange – $13.00 • $1.00 per ounce change in silver equals ~$15 per ounce change in Cerro San Pedro total cash costs • $1.00 change in Mexican peso equals ~$50 per ounce change in Cerro San Pedro total cash costs 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 28
  29. 29. 2014 capital expenditures by category Total Capital ~$340 million Sustaining Capital: ~$145 million Cerro San Pedro Growth Capital: ~$195 million Blackwater Cerro San Pedro Peak Mines New Afton Rainy River New Afton Mesquite 29
  30. 30. 2014 capital expenditures by category • Set out below is a breakdown of expected 2014 capital expenditures at each site divided into two categories – sustaining capital and growth capital (future production growth and mine life extension) New Afton - $115 million • 52% 48% • • $60 million – ~2,500 metre development, two new trucks, dam raise and surface ventilation upgrade $35 million – mill expansion $20 million – C-zone scoping level engineering and capitalized exploration Rainy River - $105 million • 100% • • $60 million – property, plant and equipment $35 million – detailed engineering, studies, environmental monitoring and permitting $10 million – capitalized exploration • • $28 million – four new trucks and leach pad expansion $12 million – major components/building and tank construction Mesquite - $40 million 100% Growth capital Sustaining capital 30
  31. 31. 2014 capital expenditures by category Peak Mines - $40 million • • 100% $20 million – two haul trucks and site maintenance $20 million – capitalized development and capitalized exploration Cerro San Pedro - $28 million • • 29% $20 million – capitalized stripping $8 million – leach pad expansion • • $10 million – permitting $5 million – engineering studies 71% Blackwater - $15 million 100% Growth capital Sustaining capital New Gold’s 30% share of estimated 2014 El Morro capital costs of $6 million fully carried by Goldcorp Inc. 31
  32. 32. Development projects 32
  33. 33. Rainy River 33
  34. 34. Rainy River Jurisdiction 2014 Feasibility Study First nine years: 1.44 g/t 325 Koz Gold Grade Annual Production Ontario, Canada $613/oz Total Cash Costs(2) Country Ranking(1) #2 $736/oz All-in Sustaining Costs(3) RAINY RIVER Situated for Mine Development Gold Resource/Upside +3.8 Moz Reserves(4) Flat terrain +169 km2 +6.2 Moz Land Package Close to infrastructure M&I Resources(4) 17km tie-in to power Multiple regional targets 1. Rankings based on 25 countries evaluated in 2013 Behre Dolbear Report – 2013 Ranking of Countries for Mining Investm ent: “Where Not to Invest”. 2. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 3. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 4. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Resources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves. 34
  35. 35. Rainy River – Project overview • 21,000 tonne per day process plan with conventional crushing, grinding, leaching and carbon-in-pulp technology • Targeted commissioning in 2016 with first year of full production in 2017 • 14-year mine life with direct processing of open pit and underground ore for first nine years and processing of a combination of stockpile and underground ore thereafter • Development capital of $885 million inclusive of $70 million contingency (at $1.05 CDN/USD) • $837 million at $1.11 CDN/USD • Life-of-mine gold and silver recoveries of 91% and 64% • Open pit mining schedule incorporates an elevated cut-off grade strategy during first nine years 35
  36. 36. Indicative timeline Project Schedule 2014 2015 2016 2017 Feasibility Study First Nations & Public Consultation Engineering/Procurement Environmental Assessment Permitting Construction Production Ongoing consultation Final construction during commissioning 1. Indicative tim eline is dependent on perm approvals and other variables. There is no assurance this tim it eline will be achieved or that the deposit will ever reach the production stage. 36
  37. 37. Blackwater 37
  38. 38. Blackwater Jurisdiction 2013 Feasibility Study First nine years: British Columbia, Canada 17-year 485 Koz Mine Life Annual Production $555/oz Total Cash Costs(3) Country Ranking(1) #2 $685/oz All-in Sustaining Costs(4) BLACKWATER Significant Gold Resource GOLD RESOURCE 8.2 Moz Regional Upside UPSIDE Reserves(2) ~1,100 km2 9.5 Moz Initial resource at Capoose Land Package M&I Resources(2) Multiple newly identified targets 1. Rankings based on 25 countries evaluated in 2013 Behre Dolbear Report – 2013 Ranking of Countries for Mining Investm ent: “Where Not to Invest”. 2. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Resources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves. 3. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 4. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 38
  39. 39. Blackwater – Project overview • Conventional truck and shovel open pit mine with 60,000 tonne per day processing plant • Simple, conventional flowsheet using whole ore leach process • Low grade stockpiling strategy • Development capital of $1,865 million inclusive of $190 million contingency (at $1.05 CDN/USD) • $1,764 million at $1.11 CDN/USD • Life-of-mine operational strip ratio of 1.88 to 1 • Life-of-mine gold and silver recoveries of 87% and 49% • Conventional waste rock and Tailings Storage Facility • Power supply from the hydroelectric power grid, via 140-kilometre transmission line • Minimal off-site infrastructure required • • Good existing access road; water supply within 15 kilometres Low environmental risk and facility designed for closure 39
  40. 40. El Morro
  41. 41. El Morro Jurisdiction 2011 Feasibility Study (30%) Life of mine: 90 Koz Chile Annual Gold Production 85 Mlbs Annual Copper Production Country Ranking(1) #3 ($700/oz) Total Cash Costs(2) EL MORRO Gold/Copper Reserve (30%) + Upside Unique Joint Venture Structure 2.7 Moz Gold Reserve (3) 2.0 Blbs Copper Reserve (3) Goldcorp 70% partner Funds 100% of capital New Gold retains portion of cash flow from mine start-up Higher Grade Block Cave Potential 1. Rankings based on 25 countries evaluated in 2013 Behre Dolbear Report – 2013 Ranking of Countries for Mining Investm ent: “Where Not to Invest”. 2. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 3. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Resources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves. 41
  42. 42. El Morro (30%) – Funding structure Total Capital 100% ~ $3.9 billion(1) 30% 100% Average annual cash flow 70% Funded by $1.2 billion interest at 4.58% ~ $2.7 billion 30% 20% 70% 80% Carried funding repayment • New Gold’s 30% share of development capital 100% carried • Interest fixed at 4.58% 1. Capital estim ates based on Decem ber 2011 Feasibility Study. 42
  43. 43. Health, safety and corporate social responsibility
  44. 44. Overview POLICY • At New Gold, our commitment to corporate social responsibility is specified in our Health, Safety, Environment and Corporate Social Responsibility (“HSE & CSR”) Policy (the “Policy”) COMMITMENT • The HSE & CSR Committee of our Board of Directors provides oversight of our progress and adherence to the principles of our Policy GOVERNANCE • • • • On the ground wherever we work, the organization, resources and commitment of our people are in place to actualize the Policy New Gold is a business participant of the UN Global Compact and has committed to its principles in the areas of human rights, labour, environment and anti-corruption New Gold is a signatory to the International Cyanide Management Code Our Sustainability Report, including detailed current and historical statistics, is published annually 44
  45. 45. 2013 highlights SAFETY • • • Four operations without a lost time incident Completed corporate safety management system and standards implementation Completed safety system audits on all operations ENVIRONMENT • • • • The New Gold Environmental Management Standards were developed New Afton received ISO 14001 and 50001 certification Cerro San Pedro – Achieved substantial compliance with International Cyanide Management Code Mesquite – Additional trucks with increased fuel efficiency SOCIAL RESPONSIBILITY • • Cerro San Pedro – Fourth consecutive year recognized as socially responsible company by Mexican Centre for Philanthropy Procedures implemented for compliance with World Gold Council Conflict Free Gold Standard 45
  46. 46. Safety performance New Gold 2012 New Gold 2013 2012 regional regulatory average 3.5 Lost Time Injury Frequency Rate(1) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Peak Mines Blackwater Rainy River New Afton 1. Industry stats are supplied by those jurisdictions in which each m ine are operating and is reflective of underground and surface operations as appropriate. 2. ‘New Gold’ com pares the average rate of injury for all New Gold operations versus average rate for all regulatory jurisdictions based on 200,000 hours. CSP Mesquite (2) New Gold 46
  47. 47. 2013 recognition New Afton has completed the safety system audit for the Work Safe Certificate of Recognition for safety system excellence New Afton 2013 provincial underground mine rescue champions Peak Mines received 2013 Environmental Achievement award Cerro San Pedro received national recognition as socially responsible company 47
  48. 48. 2014 key objectives Develop corporate safety orientation program Complete implementation of Environment Management Standards at all operations Achieve full compliance under cyanide code for Cerro San Pedro and Peak Mines Advance environmental assessment for Rainy River and Blackwater Implement community engagement and development management standards 48
  49. 49. 2013 year-end reserves, resources and exploration 49
  50. 50. Gold reserves and resources summary Proven and Probable Reserves • Increase in gold reserves attributable to: • Blackwater conversion to reserves from completion of Feasibility Study • Accretive acquisition of Rainy River Measured and Indicated Resources • 22% increase in resources per share • Over 18 million ounces now in Canada YEAR-END 2012(1) YEAR-END 2013(2) Proven and Probable Resources 7.8 Moz 18.5 Moz Measured and Indicated Resources 21.4 Moz 27.5 Moz Inferred Resources 4.4 Moz 4.2 Moz 1. Year-end 2012 Mineral Reserve and Resource inform ation per Annual Inform ation Form dated March 27, 2013. 2. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Res ources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves. 50
  51. 51. Geographic breakdown GOLD RESERVES (Moz) – 18.5 Moz GOLD M&I RESOURCES (1) (Moz) – 27.5 Moz 0.4 Australia 0.4 Mexico 0.8 Australia 2.2 USA 0.4 Mexico 3.0 Chile 2.7 Chile 4.9 USA 12.8 Canada 18.4 Canada 1. Reserves and Resources are as of Decem ber 31, 2013. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Resources” and “Technical Inform ation”. Measured and Indicated Resources are inclus of Reserves. ive 51
  52. 52. Growing resource base M&I GOLD RESOURCES (1) (Moz) 6.8 (0.7) 27.5 21.4 12/31/2012 (2) 45 ounces per 1,000 shares Ounces mined 2013 Ounces added through exploration/updated resource estimates/accretive acquisition +22% 12/31/2013 55 ounces per 1,000 shares 1. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Res ources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves . 2. Year-end 2012 Mineral Reserve and Resource inform ation per Annual Inform ation Form dated March 27, 2013. 52
  53. 53. Increasing gold leverage per share Track record of ‘per share’ growth in Measured and Indicated resources Year-end 2012 to Year-end 2013 • M&I GOLD RESOURCES (1)(2) PER 1,000 SHARES 6.1 million ounce increase in Measured and Indicated gold resources 55 45 • 16% increase in New Afton resources driven by C-zone • 33 18% increase in Blackwater resources • 41 Accretive Rainy River acquisition YE 2010 YE 2011 YE 2012 YE 2013 1. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Res ources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Reserves . 2. Year-end 2010, 2011 and 2012 Mineral Reserve and Resource inform ation per Annual Inform ation Form dated March 31, 2011, March 26, 2012 and March 27, 2013. s 53
  54. 54. Measured and Indicated resource contribution CSP New Afton Peak Mines New Afton Peak Mines Peak Mines El MorroRiver Rainy Blackw ater (1) El Morro GOLD 27.5 Moz SILVER CSP COPPER 125 Moz El Morro 4.4 Blbs New Afton Blackw ater (1) Mesquite Rainy River On a gold-equivalent basis at guided commodity prices, New Gold has ~41 million ounces (2) of Measured and Indicated resources (3) 1. 2. 3. of Blackwater inclusive of Capoose M&I resources. Based on com odity price assum m ptions of: Gold - $1,300/oz; Silver - $20.00/oz; Copper - $3.25/lb. Mineral Resources are as of Decem ber 31, 2013. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates Mineral Reserves and Mineral Resources” and “Technical Inform ation”. Measured and Indicated Resources are inclusive of Res erves. 54
  55. 55. 2014 exploration program overview New Gold’s estimated exploration budget for 2014 is $50 million • Capitalized: $30 million (included in sustaining capital total shown previously) • Expensed: $20 million (approximately 70% related to current operations) Peak Mines 45,000 metres Rainy River 35,000-40,000 metres Blackwater 10,000-15,000 metres New Afton 30,000-35,000 metres 55 1. Circle proportions are representative of both capitalized and expensed exploration for each respective asset.
  56. 56. Rainy River exploration 2013 ACHIEVEMENTS • Intrepid resource drilled off and incorporated into Feasibility Study • Condemnation drilling program approximately 40% complete by year end • Improved ability to predict prospective ore horizons beneath surface cover 2014 PROGRAM Intrepid Zone Targeting resource expansion in near-mine environment • Complete condemnation drilling program • Test potential to expand open pit resource to west • Explore prospective trends south of main mine area and extending from Intrepid Zone 56
  57. 57. Blackwater exploration 2013 Achievement • Expanded exploration targeting coverage to ~50% of claim block • 14 prospective target areas identified to date • • Seven new targets drill tested with favorable geology intercepted on six and gold mineralization intercepted on three Acquired Key property immediately south of Blackwater deposit area 2014 Program • Follow up favorable results at Van Tine, Fawn and earlier stage prospects • Initiate exploration at Key 57
  58. 58. Peak Mines exploration 2013 ACHIEVEMENTS • Near-mine exploration and resource conversion partially offset mine depletion • Advanced earlier stage targets along regional Rookery fault trend 2014 PROGRAM Focus on reserves replacement in near-mine environment • Convert Measured and Indicated resources to reserves to extend mine life • Test newly emerging targets along mine corridor • Continue to advance earlier stage regional targets 58
  59. 59. New Afton performance review, expansion project details and C-zone update 59
  60. 60. 2013 highlights New Afton moved successfully beyond design capacity • • • Gyratory crusher commissioned in January 2013 Completed construction of 32 drawbells in 2013 Achieved increase to 12,000 tonnes per day three months ahead of schedule in September 2013 QUARTERLY AVERAGE THROUGHPUT THROUGHPUT (tonnes per day) 11,967 12,460 Q3 2013 Q4 2013 25 11,055 25 Q3 2013 Q4 2013 9,262 Q1 2013 Q2 2013 PRODUCTION (Koz) GOLD PRODUCTION (Koz) 22 15 • Successfully evaluated potential for further throughput increases going forward Q1 2013 Q2 2013 COPPER PRODUCTION (Mlbs) • 10-fold increase in C-zone Measured and Indicated resources 19 21 21 Q3 2013 Q4 2013 12 Q1 2013 Q2 2013 60
  61. 61. Expansion evaluation Process of evaluating further throughput increase • Ran operation at 14,000 to 15,500 tonnes per day over multi-day periods in August and December 2013 • Mill was able to process higher throughput, however a decrease in recovery was seen • Began evaluating low capital cost alternatives to increase recoveries at higher throughput • Identified that tertiary grinding and increased flotation capacity would be required to maintain recoveries • Worked with third party engineering firm on the capital cost estimate 61
  62. 62. Mill expansion capital estimates • Below is a summary of the key capital estimates for the expansion project Engineering, Construction and Equipment $26 million Building and Site Works $12 million Owner’s Costs $2 million Contingency $5 million ESTIMATED EXPANSION CAPITAL • $45 MILLION Note: $35 million of capital to be spent in 2014 with remainder in 2015 Target: 14,000 tonnes per day at higher metal recoveries 62
  63. 63. Value creation through mill expansion 2014 TARGETED AVERAGES RUN RATE TARGETED AVERAGES WITH MILL EXPANSION Throughput 12,500 +12% 14,000 Gold recovery ~85% +2-3% ~87-88% Copper recovery ~86% +2-3% ~88-89% IRR of +50% and payback period of less than two years 63
  64. 64. Mill schematic To Tailings Surface Stockpile New Facilities 64
  65. 65. Expansion timeline H1’14 H2’14 H1’15 • EPCM contract award • Excavation • Vertimill delivery • Geotechnical and detailed engineering • Foundations • Piping/electrical • Building construction • Early works • Instrumentation • Building services • Commissioning • Buried services relocation • Reagent tank relocation 65
  66. 66. C-zone overview Isometric view looking NE Main A&B Zone C-zone 66
  67. 67. C-zone resource expansion • • C-zone originally identified through limited deep holes drilled from surface YEAR-END 2012 C-ZONE(1) Tonnes (000’s) Gold (g/t) Copper (%) Gold (Koz) Copper (Mlbs) 400 0.60 0.73 8 6 Indicated 2,900 0.63 0.68 58 43 Total M&I 3,300 0.62 0.68 66 49 13,600 0.57 0.76 307 228 Measured Drilling from underground commenced in second half of 2012 Inferred • During 2013 completed 41 holes totaling 26,800 metres • Increased tonnes and grade of Measured and Indicated resource resulting in 10-fold increase in contained gold and copper • Incremental increase to Inferred resource YEAR-END 2013 C-ZONE(2) Tonnes (000’s) Gold (g/t) Copper (%) Gold (Koz) Copper (Mlbs) 618 0.75 0.91 15 12 Indicated 25,223 0.84 0.91 678 504 Total M&I 25,842 0.80 0.91 693 516 Inferred 11,288 0.63 0.64 227 159 Measured 1. 2012 inform ation per Annual Inform ation Form dated March 27, 2013. 2. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Res ources” and “Technical Inform ation”. 67
  68. 68. 2014 C-zone program • Convert Inferred resource to Measured and Indicated • Expand resource laterally to east and west as well as vertically • Underground delineation and infill – 30,000 to 35,000 metres 68
  69. 69. Conclusion 69
  70. 70. New Gold review Growing in the Right Jurisdictions • Organic growth at New Afton through mill expansion and C-zone • Accretive acquisition of Rainy River • Increased resources at Blackwater and completed Feasibility Study Invested Team • Board and senior management hold significant stake in company • Focused on ‘per share’ growth Lowest Cost Producer • Significantly lower total cash costs (1) versus industry average and continuing to decline in 2014 • 2014E all-in sustaining costs (2) of $825 per ounce Growth Pipeline • Industry leading organic growth profile • Large scale, low cost projects Value Creation • Cumulative five year outperformance versus gold price and S&P/TSX Global Gold Index 1. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 2. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. 70
  71. 71. Among lowest-cost producers, established track record Lower costs driving higher margins (1) • 2014E all-in sustaining costs (2) to decrease by over $70 per ounce versus 2013 • Costs benefiting from depreciating Canadian and Australian dollar • Generating over $200 per ounce incremental margin versus average of peer-company’s (3) that have provided 2014 guidance 1. 2. 3. 4. 2014E GUIDANCE – ALL-IN SUSTAINING COSTS ($/OZ)(2) 2014 Reported Average (4) New Gold ~$825 ~$825 ~$1,060/oz Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. Refer to Endnote on all-in sustaining costs under the heading “Non-GAAP Measures”. Based on com parison with costs published by issuers listed in note 4. The m anner in which costs are determ ined m vary from one issuer to another. ay Average includes: Alam os, Detour, Eldorado, Goldcorp, IAMGOLD and Newm ont. The m anner in which costs are determ ined m vary from one issuer to another . ay ~$825/oz 71
  72. 72. Industry leading growth pipeline Rainy River Blackwater El Morro (30% ) Jurisdiction Ontario, Canada British Columbia, Canada Chile Significant Gold Reserve(1) 3.8 Moz 8.2 Moz 2.7 Moz Significant Gold M&I Resource Base(1) 6.2 Moz 9.5 Moz 3.0 Moz Robust Production/ Low Cash Costs(2)(3) ~325 Koz at $613/oz total cash costs ~485 Koz at $555/oz total cash costs ~90 Koz Au/85 Mlbs Cu at ~($700)/oz total cash costs Three world-class projects 1. For a detailed breakdown of Mineral Resources and Reserves by category, refer to Appendix 2. Refer to Endnotes under the heading “Cautionary note to U.S. readers concerning estim ates of Mineral Reserves and Mineral Resources” and “Technical Inform ation”. 2. Refer to Endnote on total cash costs under the heading “Non-GAAP Measures”. 3. Based on first nine years for Rainy River and Blackwater and life-of-m ine averages for El Morro as outlined in the feasibility studies for the projects. 72
  73. 73. A history of value creation Generated significant value for shareholders over last four years on a ‘per share’ basis Reserves per share +75% Analyst consensus net asset value per share (1) +75% Share price performance(1) +71% 1. Net asset value per share and Canadian dollar share price perform ance as at February 4, 2013. 73
  74. 74. Near-term catalysts 2014 costs declining versus 2013 New Afton production and cash flow continues to increase New Afton C-zone exploration Rainy River regional exploration Blackwater regional exploration Rainy River permitting Blackwater permitting New Afton mill expansion 74
  75. 75. New Gold investment thesis Portfolio of assets in top-rated jurisdictions Invested and experienced team Among lowest-cost producers with a history of delivering Peer-leading growth pipeline Establishing the leading intermediate gold company Track record of value creation
  76. 76. Appendices Appendices Page 1. Summary of debt 77 2. Reserves and Resources notes 78 76
  77. 77. Appendix 1 Summary of debt Undrawn Credit Facility Senior Unsecured Notes (April 2012) Senior Unsecured Notes (November 2012) El Morro Funding Loan Face Value $150 million(1) $300 million $500 million $78 million Maturity 1 year with annual extensions permitted April 15, 2020 November 15, 2022 n/a Interest Rate See ‘Key features’ 7.00% 6.25% 4.58% Payable Revolving credit Semi-annually Semi-annually Upon start of production Conversion price n/a n/a n/a n/a Current trading value n/a ~103 ~96 n/a Key features • • • • • New Gold to repay Goldcorp out of 80% of its 30% share of cash flow once El Morro starts production 1. $50 m illion currently allocated for Letters of Credit. Normal financial covenants Interest Rate • 3.00-4.25% over LIBOR based on ratios • Standby fee of 0.751.06% • Senior unsecured Redeemable after April 15, 2016 at 103.5% down to 100% of face after 2018 Unlimited dividends if leverage ratio below 2:1 • Senior unsecured Redeemable after November 15, 2017 at par plus half coupon, declining ratably to par Unlimited dividends if leverage ratio below 2:1 77
  78. 78. Appendix 2 Reserves and resources summary Mineral Reserves and Resources Summary As at December 31, 2012 (1) As at December 31, 2013 Gold Koz Silver Koz Copper Mlbs Gold Koz Silver Koz Copper Mlbs Proven and Probable Reserves 18,538 90,080 2,953 7,752 31,256 3,282 Measured and Indicated Resources (inclusive of Reserves) 27,505 124,499 4,353 21,403 131,847 4,061 4,161 30,360 1,821 4,383 84,620 1,114 New Afton 2,297 7,786 1,988 1,979 6,830 1,818 Mesquite 4,904 - - 5,684 - - 810 1,380 158 880 1,350 146 Inferred Resources M&I Resources (inclusive of Reserves) Peak Mines Cerro San Pedro 397 15,948 - 1,703 57,980 - Rainy River 6,236 14,635 - n/a n/a n/a Blackwater 9,500 70,130 - 8,070 56,190 - Capoose 320 3,041 14,620 - 2,207 196 2,891 9,497 - 2,097 27,505 124,499 4,353 21,403 131,847 4,061 El Morro Total M&I 1. 2012 inform ation per Annual Inform ation Form dated March 27, 2013. 78
  79. 79. Appendix 2 Reserves and resources summary (cont’d) Mineral Reserves statement as at December 31, 2013 Metal grade Tonnes 000's Gold g/t Silver g/t Contained metal Copper % Gold Koz Silver Koz Copper Mlbs New Afton Proven - - - - - - - Probable 48,821 0.56 2.2 0.84 879 3,500 904 Total New Afton P&P 48,821 0.56 2.2 0.84 879 3,500 904 Mesquite Proven 3,809 0.70 - - 86 - - Probable 112,094 0.60 - - 2,152 - - Total Mesquite P&P 115,903 0.60 - - 2,237 - - Proven 1,820 4.35 6.7 1.16 255 390 47 Probable 1,820 2.69 7.4 1.27 157 430 51 Total Peak Mines P&P 3,640 3.52 7.1 1.22 412 820 98 Probable 12,982 13,714 0.47 0.44 17.5 18.7 - 197 195 7,311 8,239 - Total CSP P&P 26,696 0.46 18.1 - 392 15,550 - Peak Mines Cerro San Pedro Proven 79
  80. 80. Appendix 2 Reserves and resources summary (cont’d) Mineral Reserves statement as at December 31, 2013 Metal grade Tonnes 000's Gold g/t Silver g/t Contained metal Copper % Gold Koz Silver Koz Copper Mlbs Rainy River Direct processing material Open Pit Proven 15,839 1.47 2.0 - 746 1,038 - Probable 46,866 1.26 3.1 - 1,896 4,594 - Open Pit P&P (direct processing) 62,705 1.31 2.8 - 2,642 5,632 - Underground Proven - - - - - - - Probable 4,187 4.96 10.3 - 668 1,388 - Underground P&P (direct processing) 4,187 4.96 10.3 - 668 1,388 - Stockpile material Open Pit Proven 6,843 0.38 1.5 - 84 332 - Probable 30,541 0.39 2.1 - 378 2,058 - Open Pit P&P (stockpile) 37,384 0.38 2.0 - 462 2,390 - Proven 22,681 1.14 1.9 - 830 1,370 - Probable 81,594 1.12 3.1 - 2,943 8,040 - 104,275 1.13 2.8 - 3,773 9,410 - Proven 124,500 0.95 5.5 - 3,790 22,100 - Probable 169,700 0.68 4.1 - 3,730 22,300 - P&P (direct processing) 294,300 0.79 4.7 - 7,510 44,400 - Proven 20,100 0.50 3.6 - 330 2,300 - Probable 30,100 0.34 14.6 - 330 14,100 - P&P (stockpile) 50,200 0.40 10.2 - 650 16,400 - 344,400 0.74 5.5 - 8,170 60,800 - Total P&P Total Rainy River P&P Blackwater Direct processing material Stockpile material Total Blackwater P&P El Morro Proven 100% Basis 30% Basis Probable 321,814 277,240 0.56 0.35 - 0.55 0.43 Total El Morro P&P 599,054 0.46 - 0.49 Total P&P 1,746 - 929 - 1,163 788 2,675 - 1,951 18,538 90,080 2,953 80
  81. 81. Appendix 2 Reserves and resources summary (cont’d) Measured and Indicated mineral Resource statement (inclusive of Reserves) as at December 31, 2013 Metal grade Tonnes 000's Gold g/t Silver g/t Contained metal Copper % Gold Koz Silver Koz Copper Mlbs New Afton A&B Zones Measured Indicated 41,059 26,966 0.79 0.44 2.7 2.1 1.09 0.65 1,041 384 3,624 1,777 984 384 A&B Zone M&I 68,025 0.65 2.5 0.91 1,425 5,401 1,368 Indicated 618 25,223 0.75 0.84 1.5 2.0 0.91 0.91 15 678 30 1,589 12 504 C-Zone M&I 25,842 0.83 2.0 0.91 693 1,620 516 11,035 0.50 2.2 0.43 179 763 104 C-Zone Measured HW Lens Measured Indicated HW Lens M&I 11,035 0.50 2.2 0.43 179 763 104 104,901 0.68 2.3 0.86 2,297 7,786 1,988 Indicated 9,070 304,081 0.66 0.48 - - 191 4,713 - - Total Mesquite M&I 313,151 0.49 - - 4,904 - - Indicated 3,000 3,400 4.69 3.29 6.7 6.7 1.06 1.18 450 360 650 730 70 88 Peak Mines M&I 6,400 3.95 6.7 1.12 810 1,380 158 Indicated 13,387 14,311 0.46 0.43 17.3 18.4 - 199 198 7,459 8,489 - Total CSP M&I 27,698 0.45 17.9 - 397 15,948 - Total New Afton M&I Mesquite Measured Peak Mines Measured Cerro San Pedro Measured 81
  82. 82. Appendix 2 Reserves and resources summary (cont’d) Measured and Indicated mineral Resource statement (inclusive of Reserves) as at December 31, 2013 Metal grade Tonnes 000's Gold g/t Silver g/t Contained metal Copper % Gold Koz Silver Koz Copper Mlbs Rainy River Direct processing material Open Pit Measured 20,282 80,411 1.45 1.35 1.9 2.6 - 947 3,486 1,261 6,584 - 100,693 1.37 2.4 - 4,433 7,846 - Indicated 89 5,469 4.95 4.53 2.8 11.3 - 14 796 8 1,994 - Underground M&I (direct processing) 5,558 4.53 11.2 - 810 2,002 - Measured 6,294 0.37 1.3 - 74 262 - Indicated 64,816 0.44 2.2 - 919 4,526 - Open Pit M&I (stockpile) 71,110 0.43 2.1 - 993 4,788 - Indicated 26,665 150,696 1.21 1.07 1.8 2.7 - 1,035 5,202 1,531 13,104 - Total Rainy River M&I 177,361 1.09 2.6 - 6,236 14,635 - Measured 116,955 1.04 5.6 - 3,900 21,060 - Indicated 189,044 0.78 6.0 - 4,730 36,470 - M&I (direct processing) 305,999 0.88 5.8 - 8,620 57,520 - Measured 26,521 0.30 4.1 - 260 3,500 - Indicated 64,382 0.30 4.4 - 620 9,110 - M&I (stockpile) 90,904 0.30 4.3 - 870 12,600 - 396,903 0.74 5.5 - 9,500 70,130 - 20,280 0.50 22.4 - 320 14,620 - Indicated Open Pit M&I (direct processing) Underground Measured Stockpile material Open Pit Total M&I Measured Blackwater Direct processing material Stockpile material Total Blackwater M&I Capoose Indicated 100% Basis El Morro Measured 30% Basis Indicated 341,604 349,803 0.56 0.35 - 0.54 0.42 Total El Morro M&I 691,407 0.46 - 0.48 Total M&I 1,848 - 1,230 977 3,041 - 2,207 27,505 124,499 4,353 1,193 82
  83. 83. Appendix 2 Reserves and resources summary (cont’d) Inferred Resource statement as at December 31, 2013 Metal grade Tonnes 000's Gold g/t Silver g/t Contained metal Copper % Gold Koz Silver Koz Copper Mlbs New Afton A&B-Zone 5,607 0.32 1.5 0.38 59 272 46 HW Lens 11,288 818 0.63 0.56 1.7 1.3 0.64 0.42 227 15 602 33 159 7 New Afton Inferred 17,713 0.53 1.6 0.54 301 907 212 Mesquite 17,550 0.42 - - 238 - - Peak Mines 2,000 2.34 4.7 1.17 150 300 51 CSP 1,174 0.34 11.6 - 13 436 - 9,388 2,641 0.97 4.46 2.3 8.3 - 292 379 687 707 - 12,029 1.74 3.6 - 671 1,394 - 8,626 0.37 1.2 - 102 323 - 20,655 1.16 2.6 - 773 1,717 - Stockpile 13,815 3,785 0.76 0.31 4.1 3.6 - 340 40 1,820 440 - Blackwater Inferred 17,600 0.66 4.0 - 380 2,260 - 29,263 0.39 26.3 - 370 24,740 - - 970 C-Zone Rainy River Direct processing Open Pit Underground Total Direct Processing Stockpile Open Pit Rainy River Inferred Blackwater Direct processing Capoose 100% Basis 30% Basis El Morro - Open Pit 564,217 0.16 - 0.26 871 El Morro - Underground 113,840 0.97 - 0.78 1,065 - 587 4,161 30,360 1,821 Total Inferred 83
  84. 84. Appendix 2 Reserves and resources notes New Gold reports its Measured and Indicated mineral resources inclusive of its mineral reserves. Measured and Indicated miner al resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources have a greater amount of uncertainty as to their existence and ec onomic and legal feasibility, do not have demonstrated economic viability, and are exclusive of mineral reserves. Mineral reserves have been estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) definition standards and National Instrument 43-101 (“NI 43-101”). 1) Mineral Reserves for the company’s mineral properties have been estimated based on the follow ing metal prices and low er cut-off criteria: Mineral Property Gold (US$/oz) Silver (US$/oz) Copper (US$/lb) Low er Cut-off New Afton $1,300 $22.00 $3.00 US$21.00/t NSR Mesquite $1,300 - - Peak Mines $1,300 $22.00 $3.00 Cerro San Pedro $1,300 $22.00 - US$3.00/t Rainy River $800 $1,300 $25.00 $22.00 - Open Pit: 0.3 – 0.7 g/t Au Underground: 3.5 g/t Au Blackw ater $1,300 $22.00 - Direct processing: 0.26 – 0.38 g/t AuEq Stockpile: 0.32 g/t AuEq El Morro $1,300 - $3.00 0.21 g/t Au – Oxide and transition reserves 0.41 g/t Au – Non-oxide reserves A$88 – 134/t NSR 0.20% Cu 84
  85. 85. Appendix 2 Reserves and resources notes (cont’d) 2) Mineral Resources for the company’s mineral properties have been estimated based on the follow ing metal prices and low er cut-off criteria: Mineral Property Gold (US$/oz) Silver (US$/oz) Copper (US$/lb) Low er Cut-off New Afton $1,400 $24.00 $3.25 Mesquite $1,400 - - Peak Mines $1,400 $24.00 $3.25 Cerro San Pedro $1,400 $24.00 - 0.10 g/t AuEq – Open pit oxide resources 0.30 g/t AuEq – Open pit sulphide resources Rainy River $1,400 $24.00 - Open Pit: 0.3 – 0.45 g/t Au Underground: 2.5 g/t Au Blackw ater $1,400 $24.00 - Direct processing: 0.40 g/t AuEq Stockpile: 0.30 – 0.40 g/t AuEq Capoose $1,400 $24.00 - 0.40 g/t AuEq El Morro $1,300 - $3.00 0.40% CuEq 0.11 g/t Au – Oxide and transition resources 0.22 g/t Au – Non-oxide resources A$92 - 125/t NSR 0.20% Cu 3) Mineral resources are classified as Measured, Indicated and Inferred resources and are reported based on technical and economic parameters consistent w ith the methods most suitable for their potential commercial exploitation. Where different mining and/or processing methods might be applied to different portions of a mineral resource, the designators ‘open pit’ and ‘underground’ have been applied to indicate envisioned mining method. Likew ise the designators ‘oxide’, ‘non-oxide’ and ‘sulphide’ have been applied to indicate the type of mineralization as it relates to appropriate mineral processing method and expected payable metal recoveries. Additional details regarding mineral resource estimation, classification, reporting parameters, key assumptions and associated risks for each of New Gold’s mineral properties, other than Rainy River, are provided in the r espective NI 43-101 Technical Reports w hich are available at www.sedar.com. Refer to the supplementary information below regarding the mineral reserve and mineral resource estimates for Rainy River. 85
  86. 86. Appendix 2 Reserves and resources notes (cont’d) Rainy River Mineral Reserves: 1. Open pit mineral reserves have been estimated using an optimized pit shell based on metal prices of $800 per ounce gold and $25 per ounce silver, a foreign exchange rate of C$1.05 to US$1.00, gold recovery of 89.9% (non-CAP Zone) and 74.3% (CAP Zone) and a silver recovery of 67.1% (non-CAP Zone) and 69.5% (CAP Zone). The cut-off grade is based on a gold price of $1,200. Underground reserves have been estimated from mining shapes generated using a cut-off grade of 3.5 g/t gold-equivalent. Development material from stope access drives above a cut-off grade of 1.5 g/t gold-equivalent is also assumed to be sent to the mill for processing. Underground breakeven cut-off grade is calculated at 2.75 g/t gold-equivalent based on metal prices of $1,300 per ounce gold and $22 per ounce silver, a foreign exchange rate of CAD $1.05 to USD $1.00, gold recov ery of 95% and a silver recovery of 75%. 2. Open pit reserves have been estimated using a dilution of 4% at 0.21 g/t Au and 1.19 g/t Ag, and underground reserves have been estimated using an overall dilution of 8.3%, inclusive of both rock and backfill dilution. Open pit and underground reserves have been estimated using a mining recovery of 95% and 96.5%, respectively. 3. Open pit direct processing material is defined as mineralization likely to be mined and processed directly and above a var iable cut-off grade ranging from 0.3-0.7 Au g/t. 4. Stockpile material includes all material w ithin designed open pit betw een variable cut-offs described above in Note 3, as w ell as material w ithin the CAP Zone (code 500) that is suitable for stockpiling and future processing. 5. Mineral Reserves for the open pit are derived from the resource model effective November 2, 2013. Models for the underground reserves were derived from the August 2013 and September 2013 models for the main ODM zone and Intrepid Zone, respectively. Models w ere prepared by Dorota El-Rassi, P.Eng. (APEO #100012348) and Glen Cole, P.Geo. (APGO #1416), of SRK, both independent “Qualified Persons" as that term is defined in National Instrument 43-101. Rainy River’s exploration program in Richardson Tow nship is being supervised by Mark A. Petersen, (AIPG Certified Professional Geologist #10563), Vice President, Exploration for New Gold and a “Qualified Person” as defined in National Instrument 43-101. New Gold continues to implement a rigorous QA/QC program to ensure best practices in drill core sampling, analysis and data management. 6. Qualified persons - The open pit portion of the mineral reserve statement w as prepared under the supervision of Patrice Live (OIQ #38991) of BBA, and the underground portion of the mineral reserve statement w as prepared by Colm Keogh, P.Eng. (APEGBC #37433) of AMC Mining Consultants (Canada) Ltd., both independent “Qualified Persons" as that term is defined in National Instrument 43-101. 7. The mineral reserve estimate may be materially affected by environmental, permitting, legal, title, taxation, sociopolitic al, marketing, and other relevant issues. Rainy River Mineral Resources: 1. Mineral resources are reported in relation to conceptual pit shells and are inclusive of the Intrepid zone. Vertical limit of -150m msl. 2. Open pit mineral resources are reported at a cut-off grade of 0.30 gpt gold, underground mineral resources are reported at a cut-off grade of 2.5 gpt gold based on a gold price of $1,400 per ounce, a silver price of $24.00 per ounce, a foreign exchange rate of C$1.10 to US$1.00, gold recovery of 88% for open pit resources and 90% for underground resources with silver recovery at 75%. 3. Direct processing material is defined as mineralization above a cut-off of 0.45 g/t gold and likely to be mined and processed directly. 4. Stockpile material includes all material w ithin conceptual pit shells in the gold grade range 0.30 – 0.45 gpt as w ell as all material w ithin the CAP zone that is suitable for stockpiling and future processing based on average metallurgical recoveries of 88% gold and 75% silver. 5. Qualified Persons – The mineral resource statement w as prepared by Dorota El-Rassi, P. Eng. (APEO #100012348) and Glen Cole (APGO #1416) from SRK, both independent "Qualified Persons" as that term is defined in National Instrument 43-101. 6. Mineral resources are inclusive of mineral reserves. Mineral resources that are not mineral reserves do not have demonstr ated economic viability. 7. The mineral resource estimate may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing and other relevant issues. 4) Qualified Person: The preparation of New Gold's mineral reserve and mineral resource statements has been done by Qualified Persons as defined under National Instrument 43-101 under the supervision of Mark A. Petersen, a Qualified Person under National Instrument 43-101 and an officer of New Gold. 86
  87. 87. Endnotes CAUTIONARY NOTE TO U.S. READERS CONCERNING ESTIMATES OF MINERAL RESERVES AND MINERAL RESOURCES Information concerning the properties and operations of New Gold has been prepared in accordance with Canadian standards unde r applicable Canadian securities laws, and may not be comparable to similar information for United States companies. The terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Minera l Resource” and “Inferred Mineral Resource” used in this Report are Canadian mining terms as defined in the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards f or Mineral Resources and Mineral Reserves adopted by CIM Council on November 27, 2010 and incorporated by reference in National Instrument 43 -101 (“NI 43-101”). While the terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” are recognized and required by Canadian securities regulations, they are not defined terms under standards of the United States Securities and Exchange Commission. As such, certain information contained in this Report concerning descriptions of mineralization and resources under Canadian standards is not comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the United States Securities and Exchange Commission. An “Inferred Mineral Resource” has a greater amount of uncertainty as to its existence and as to its economic and legal feasi bility. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility of pre-feasibility studies. It cannot be assumed that all or any part of an “Inferred Mineral Resource” will ever be upgraded to a higher confidence category. Readers are cautioned not to assume that all or any part of an “Inferred Mineral Resource” exists or is economically or legally mineable. Under United States standards, mineralization may not be classified as a “Reserve” unless the determination has been made tha t the mineralization could be economically and legally produced or extracted at the time the Reserve estimation is made. Readers are cautioned not to assume that all or any part of the Measured or Indi cated Mineral Resources that are not Mineral Reserves will ever be converted into Mineral Reserves. In addition, the definitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” under CIM st andards differ in certain respects from the standards of the United States Securities and Exchange Commission. TECHNICAL INFORMATION The scientific and technical information in this presentation has been reviewed and approved by Mark A. Petersen, Vice President, Exploration of New Gold. Mr. Petersen is an AIPG Certified Professional Geologist and a “qualified person” under National Instrument 43 -101. NON-GAAP MEASURES (1) TOTAL CASH COSTS “Total cash costs” per ounce figures are non-GAAP measures which are calculated in accordance with a standard developed by The G old 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 com parable to other similarly titled measures of other companies. New Gold reports total cash costs on a sales basis. Total cash costs include mine site operating costs such as mining, processing, adm inistration, royalties and production taxes, but are exclusive of amortization, reclamation, capital and exploration costs. Total cash costs are reduced by any by-product revenue and then divided by ounces of gold sold to arrive at a per ounce figure. Co-product cash costs are calculated based on total cash costs, prior to any reduction for by-product revenue, being apportioned to each metal produced on a percentage of revenue basis and subsequently divided by ounces of gold or silver sold or pounds of copper sold to arrive at per ounce or per pound figures. These measures, along with sales, are co nsidered to be a key indicator of a company’s ability to generate operating earnings and cash flow from its mining operations. This data is furnished to provide additional information and is a non -GAAP measure. Total cash costs and co-product cash costs presented do not have a standardized meaning under GAAP 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 GAAP and is not necessarily indicative of operating costs presented under GAAP. Furth er details regarding our non-GAAP measures and a reconciliation to the nearest GAAP measures are provided in our MD&A’s accompanying our financial statements filed from time to time on www.sedar.c om. (2) ALL-IN SUSTAINING COSTS Consistent with guidance announced in 2013 by the World Gold Council, an association of various gold mining companies from ar ound the world of which New Gold is a member, New Gold defines “all -in sustaining costs” per ounce as the sum of total cash costs, sustaining capital expenditures, corporate general and administra tive 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 th is non-GAAP measure provides further transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the company in assessing the company’s expected operating performance, ability to generate free cash flow and its overall value. This data is furnished to provide additional information and is a non -GAAP measure. All-in sustaining costs presented do not have a standardized meaning under GAAP 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 GAAP and is not necessarily indicative of operating costs presented under GAAP. Further details regarding our non -GAAP measures and a reconciliation to the nearest GAAP measures are provided in our MD&A’s accompanying our financial statements filed from time to time on www.sedar.com. 87
  88. 88. Contact information Investor Relations Hannes Portmann Vice President, Corporate Development 416-324-6014 hannes.portmann@newgold.com 88
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