Mr. Douglas Forster reports

NEWMARKET GOLD REPORTS STRONG FIRST QUARTER 2016 FINANCIAL RESULTS; ESSENTIALLY DEBT-FREE; FOSTERVILLE DELIVERS RECORD PRODUCTION AND LOW AISC OF US$723

Newmarket Gold Inc. has released its financial results for the three months ended March 31, 2016. All figures are in U.S. dollars, unless otherwise stated. Full financial statements and management discussion and analysis documents can be found at SEDAR and the company's website.

First quarter 2016 highlights:

• Strong financial position: cash position to $52.1-million as at the end of first quarter 2016, a $15.6-million increase from year-end. Working capital of $38.6-million at quarter-end and only $1.6-million in long-term debt following full conversion and redemption of convertible debentures;
• Solid first quarter gold production: consolidated gold production of 58,057 ounces increased 9.2 per cent over fourth quarter 2015 and a decline of 2.7 per cent over Q1 2015;
• Record quarterly performance at flagship Fosterville mine: Fosterville achieved record quarterly production of 33,138 ounces with record average grade of 7.34 grams per tonne up 28 per cent year over year, and recovery of 86.8 per cent;
• Record-low all-in-sustaining costs (AISC): record-low consolidated AISCs per ounce sold of $908 (2016 guidance of $950 to $1,025);
• Operating cash costs in line: consolidated operating cash costs per ounce sold of $701 (2016 guidance of $650 to $725);
• Fosterville achieves low operating cash costs and AISCs: Fosterville operating cash costs and AISCs per ounce sold of $473 and $723, respectively;
• Generating free cash flow: operating cash flow of $18.3-million or 13 cents per share based on basic weighted average number of shares outstanding, based on revenue of $66.1-million from 57,796 ounces sold. Free cash flow of $8.9-million based on operating cash flow less capital expenditures of $9.4-million and after investing $3.8-million into growth programs;
• Net income: net income of $6.5-million or four-cent earnings per share, compared with net income of $15.7-million in Q1 2015 or 13-cent EPS. Q1 2016 EPS reflects an increased weighted average number of shares outstanding as a result of the conversion and redemption of debentures and the exercise of warrants during the quarter.

Douglas Forster, president and chief executive officer, Newmarket Gold, commented: "Our strong first quarter performance reflects solid consolidated gold production of 58,057 ounces, operating cash costs of $701 and record low AISCs of $908 per ounce sold. Costs continue to reflect our improving consolidated grade and recovery profile, largely driven by record grade at our flagship Fosterville mine and cost-containment initiatives. With our strong first quarter performance we generated $8.9-million in free cash flow, after investing $3.8-million in growth exploration, and we increased our cash position 43 per cent to $52.1-million further strengthening our balance sheet. With the full conversion and redemption of our convertible debentures, which eliminates interest payments of $2.8-million (Canadian) per year, we ended the quarter essentially debt-free with only $1.6-million in long-term debt on the balance sheet.

"Looking ahead, Newmarket is well positioned to achieve 2016 production and cost guidance. With a significantly higher-grade profile and the commissioning of the gravity circuit at Fosterville, and improved grades and recoveries at Cosmo, we will continue to deliver positive operating results and generate significant cash flows this year. Additionally, we will continue to invest in near-term exploration programs that support organic growth initiatives with the aim of adding quality ounces to support a multiyear goal of extending mine life across our operations."

First quarter 2016 financial results

                               FINANCIAL RESULTS
                (In thousands, except per share and per ounce)

                                                          Q1 2016    Q1 2015

Revenue                                                   $66,055    $72,897
Cost of operations, including depletion and
depreciation                                              (48,502)   (53,135)
Mine operating income                                      17,553     19,762
Net (loss) income                                           6,463     15,703
Net (loss) income per share ($/share) -- basic and
diluted(i)                                                   0.04       0.13
Cash generated from operating activities                   18,299     27,486
                                                          -------    -------
Capital investment in mine development, property,
plant and equipment                                         9,434     13,460
                                                          -------    -------
Average realized gold price per ounce                       1,139      1,185
Average quoted gold price per ounce                         1,183      1,218
Operating cash costs per ounce sold                           701        683
All-in sustaining cash costs per ounce sold                   908        938

(i) Pretransaction net (loss) income per share is presented after giving
effect to the arrangement share exchange ratio of 0.2456.

                             OPERATIONAL RESULTS

                                                          Q1 2016    Q1 2015

Ore milled (t)                                            572,451    585,720
Grade (g/t Au)                                               3.63       3.58
Recovery (%)                                                 86.8       86.4
Gold oz produced                                           58,057     59,676
Gold oz sold                                               57,796     61,294

First quarter 2016 review

Newmarket Gold achieved consolidated production of 58,057 ounces in Q1 2016, which included record quarterly production from the Fosterville gold mine of 33,138 ounces. Fosterville's performance represented a 14-per-cent increase over Q1 2015, driven by a record mill grade of 7.34 g/t, reflecting higher-grade development and stope production in the Lower Phoenix, where both west- and east-dipping lenses are being extracted. Cosmo produced 16,340 ounces in Q1 2016, a 27-per-cent increase over Q4 2015 as a result of higher grades, reflecting a combination of mine sequencing and improved grade control, and improved mill recoveries. Production at Cosmo decreased 21 per cent compared with the corresponding period of 2015, predominantly due to lower grades. Production at Stawell in Q1 2016 was 8,579 ounces, down 13.6 per cent compared with the prior year, with underground ore deferred due to delays in ground support activities being replaced in the mill with lower-grade oxide stockpile, resulting in a 18.3-per-cent decrease in mill grade. Consolidated gold production decreased slightly from Q1 2015, as the record production from Fosterville was offset by lower comparative production from Cosmo and Stawell.

Revenue for Q1 2016 was $66.1-million based on 57,796 gold ounces sold at an average realized gold price of $1,139 per ounce. Revenues decreased 9.4 per cent compared with the corresponding quarter of 2015 as a result of a 3.9-per-cent-lower average realized gold price and the sale of 2,750 ounces of gold bullion in Q1 2015 which were held on the balance sheet at Dec. 31, 2014. The lower average realized price compared with the average market price in Q1 2016 was the result of pricing of a large portion of production in the earlier part of the quarter.

Mine operating income in Q1 2016 was $17.6-million compared with $19.8-million in Q1 2015, noting that the prior period included approximately $1.0-million of operating income relating to the sale of gold bullion. Total operating expenses of $39.7-million for Q1 2016 decreased 3.9 per cent compared with the prior year, largely reflecting the impact of a lower Australian dollar relative to the U.S. dollar. Operating costs in Q1 2015 also reflect the carrying costs of the bullion sold in that period. Royalty expense of $800,000 for the first quarter of 2016 increased compared with Q1 2015 due the commencement of the Stawell 1-per-cent net-smelter-return royalty as of Jan. 1, 2016, which is held by AuRico Metals Inc. Operating cash costs per ounce in Q1 2016 were $701 per ounce, in line with operating cash cost guidance for 2016. The increase from Q1 2015 operating cash costs of $683 reflects the impact of lower comparative grades for Cosmo and Stawell, resulting in lower production at a similar operating cost profile. Operating cash costs per ounce for Fosterville in Q1 2016 of $473 per ounce were down 12.7 per cent compared with Q1 2015, reflecting strong grade performance.

Depletion and depreciation are down 28.7 per cent to $7.95-million for Q1 2016, impacted by the lower Australian dollar but mainly the result of lower book values at Cosmo and a larger resource denominator for Fosterville.

Net income for the first quarter of 2016 was $6.5-million or four cents per share, compared with net income of $15.7-million in Q1 2015 or 13 cents per share. Per-share information in the most recent quarter is reflective of the increased weighted average number of shares outstanding as a result of the conversion and redemption of debentures and the exercise of warrants during the quarter.

Net income in Q1 2015 benefited from the sale of 2,750 ounces of gold bullion, generating mine operating income of $1.0-million. Net income for the most recent quarter includes the impact of $3.8-million of exploration and evaluation spending on growth programs, an increase of over $3-million compared with the prior year. Net income was also impacted by a $1.0-million increase in share-based compensation due to the vesting of a tranche of the company's performance share units, as a result of the strong performance of the company's share price during the period. General and administrative expenses have also increased compared with Q1 2015, reflecting the increased corporate capacity as a result of Newmarket's amalgamation with Crocodile Gold, and increased capital markets activity.

During the first quarter of 2016, the company also recognized a deferred tax expense of $2.4-million, compared with $600,000 in the corresponding quarter of 2015. The expense relates mainly to estimated use of non-capital losses relating to Fosterville and Stawell, as Fosterville continues to achieve record production and low cash cost results, and the Australian-dollar gold price continues to remain strong.

Cash flow

Operating cash flow in Q1 2016 was $18.3-million compared with $27.5-million in the corresponding period of 2015. Revenue in Q1 2016 was down $6.8-million from Q1 2015, which benefited from the sale of 2,750 ounces of bullion for revenue of approximately $3.3-million and a 3.8-per-cent-higher average realized gold price. Lower revenues were partially offset by a 3.9-per-cent reduction in total operating expenses. Operating cash flow in Q1 2016 also reflects exploration and growth spending of $3.8-million, an increase of over $3-million compared with Q1 2015 as the company continues to invest in growth programs to drive near-term resource growth.

Newmarket invested $7.5-million in mine development in Q1 2016, which includes underground development and resource definition. Development was focused at Fosterville, which accounted for $6.6-million of the total expenditure. Mine development at Cosmo was comparatively low at $500,000, with a focus on operating development in the now-accessed mining block 8, and also on the 640 drill drive growth development which provides a drill platform for the sliver lode and the Eastern lode footwall targets, in addition to grade-control drilling. Total mine development was down from $11.1-million in Q1 2015, mainly due to decreased underground development at Cosmo. Property, plant and equipment expenditure in the quarter was $1.9-million, down slightly from the prior year and mainly relating to Fosterville, including approximately $300,000 for the installation and commissioning of the gravity gold circuit to enable the optimal recovery of coarse gold.

All-in sustaining cash costs for the first quarter of 2016 were $908 per ounce, down 3.2 per cent from $938 in Q1 2015. The higher operating cash costs per ounce due to the lower relative grade profiles at Cosmo and Stawell were offset by the lower capital expenditures and the lower average Australian-dollar exchange rate. Notably the all-in sustaining cash costs per ounce for Fosterville decreased 15.8 per cent to $723 per ounce in Q1 2016, from $859 in the corresponding period in 2015.

Net cash provided from financing activities in first quarter of 2016 of $4.3-million reflects the proceeds of $5.1-million on the exercise of 4,250,769 share purchase warrants, which had an exercise price of $1.63 (Canadian) per share. Financing activity cash flow also reflected the final payment of $700,000 in interest on the conversion and redemption of the convertible debentures.

Foreign exchange

Newmarket Gold has generally benefited from the decrease drop in the Australian-dollar exchange rate relative to the U.S. dollar, which has markedly increased the gold price in Australian-dollar terms (the functional currency of its operations) while having the effect of lowering cash costs in U.S.-dollar terms. Since Jan. 1, 2016, to the date of this management's discussion and analysis, the Australian-denominated gold price, which opened the year at $1,450 (Australian), has traded at an average of approximately $1,630 (Australian) and has exceeded $1,700 (Australian) on many occasions.

The Australian dollar closed at 76.67 cents on March 31, 2016, an increase of 5.2 per cent compared with Q1 2015. The average Australian-dollar exchange rate for the first quarter was 72.11 cents, down 8.3 per cent compared with the same period in 2015.

Cash position and working capital

At March 31, 2016, the company had a cash balance of $52.1-million, a $15.6-million increase from the Dec. 31, 2015, cash balance of $36.5-million. Newmarket Gold's working capital position at the end of Q1 2016 was $38.6-million, a significant increase from $22.3-million at Dec. 31, 2015, reflecting net free cash flow from mine operations, the receipt of proceeds on the exercise of share purchase warrants and the reduction of current debt relating to the debentures. With the full conversion and redemption of the convertible debentures, the company is essentially debt-free with only $1.6-million in capital lease obligations.

Outlook -- 2016

In 2016, Newmarket remains an established plus-200,000-ounce gold producer well positioned to execute a strategy of both organic growth as well as growth through the consolidation of high-quality gold assets in the world's most desirable mining jurisdictions. Newmarket's strong senior management team, proven operating team and board of directors with tremendous industry experience are all focused on creating substantial shareholder value through continued safe and sustainable operating performance from its three existing operations and through a disciplined approach to growth.

              PRODUCTION AND CASH COST GUIDANCE FOR FISCAL 2016

                          Fosterville        Cosmo      Stawell Consolidated

Gold production (ounces)      110,000-      60,000-      approx.     205,000-
                              120,000       65,000       35,000      220,000
Operating cash costs per                                                    
ounce(1)                    $500-$575    $720-$795    $900-$975    $650-$725
AISC per ounce(1)                                                       $950-
                                                                      $1,025
Sustaining capital                                                          
expenditures ($M)         $37.5-$42.5  $10.0-$12.0    $2.5-$3.0  $50.0-$57.5
Growth expenditures ($M)                                          $5.0-$10.0
Corporate general and                                                       
administrative expenses ($M)                                       $5.0-$6.0

(1) Operating cash costs per ounce and AISCs per ounce reflect an average    
Australian-dollar-to-U.S.-dollar exchange of 75 cents.

First quarter 2016 earnings conference call details

In connection with the company's first quarter 2016 financial results, Mr. Forster, Robert Dufour, chief financial officer, and Darren Hall, chief operating officer, will also host a conference call to discuss the results on Friday, April 29, 2016, at 11 a.m. ET.

Participants may listen to the call by dialling toll-free 1-800-319-4610 or 1-416-915-3239 at approximately 10:50 a.m. ET and ask to join the Newmarket Gold conference call. International or local callers should dial 1-416-915-3239 at approximately 10:50 a.m. ET and ask to join the Newmarket Gold conference call.

The call will also be webcast live at the company's website in the events and webcast section under the investor relations tab.

The live audio webcast will be archived and made available for replay at the company's website.

Presentation slides which accompany the conference call will be made available in the investors section of the Newmarket Gold website, under presentations, prior to the conference call.

Upcoming events:

• May 25, 2016, annual general meeting, Toronto, Ont., at 4 p.m. ET.

Qualified person

Mark Edwards, MAusIMM (CP), MAIG, general manager, exploration, Newmarket Gold, is a qualified person as such term is defined in National Instrument 43-101, and has reviewed and approved the technical information and data included in this press release.

We seek Safe Harbor.