An anonymous director reports

NEW GOLD OUTLINES OPPORTUNITIES TO EXTEND C-ZONE BEYOND 2030, PRESENTS STRATEGIC PIPELINE FOR ADDITIONAL MINE LIFE EXTENSION AT NEW AFTON

New Gold Inc. has provide an update on promising opportunities for mine life extension at New Afton, with the potential to extend the mine life beyond 2030. The company also reports encouraging drill results and future exploration plans for the K-zone and AI-southeast gold-copper zones and presents a regional outlook on exploration initiatives in south-central British Columbia, with a plan to strategically leverage New Afton's mill and tailings facilities to further extend the mine life.

Highlights

• Potential opportunity to extend C-zone mine life beyond 2030 with minimal capital investment.
• Encouraging drill results at K-zone, a new exploration zone located approximately 200 metres east of East extension, targeting copper-gold porphyry mineralization. New Afton's exploration strategy includes the development of an exploration drift to accelerate K-zone exploration drilling.
• Promising drill results at AI-southeast with intersection of 40 metres (estimated true width) of 0.56 gram per tonne gold and 1.03 per cent copper mineralization within potassic alteration zone. The company plans to test down dip continuation utilizing the upcoming K-zone underground exploration drift in 2024.
• Launch of New Gold's regional-scale mineral system and machine-learning driven prospectivity mapping of south-central British Columbia, and greenfield exploration work programs planned for Little Fort copper-gold porphyry property and Meridian orogenic gold project.

Strategic pipeline for mine life extension

The New Afton mine is well positioned with a current mineral reserves life to 2030 and is currently transitioning to a period of production growth and decreasing costs, which is expected to result in strong cash flow generation over the coming years. With C-zone entering the production ramp-up phase, the company is focused on unlocking the long-term potential of the mine. Exploration spending has increased over the past few years allowing the company to develop a pipeline of mineral resources and exploration targets, underpinning a strategic outlook for mine life extension.

At Dec. 31, 2022, New Afton's measured and indicated mineral resources included 66.5 million tonnes at average grades of 0.71 per cent copper and 0.57 g/t gold. A priority for New Gold is to convert a portion of these mineral resources to mineral reserves over the next few years.

New Gold is currently evaluating three of the most promising resource zones for potential conversion to mineral reserves; C-zone, East extension and D-zone. Together these zones contain measured and indicated mineral resources of 418 million pounds of copper and 509,000 ounces of gold and inferred mineral resources of 85 million pounds of copper and 118,000 ounces of gold.

The company is currently evaluating the opportunity to extend C-zone with minimal capital investment, which would extend New Afton's mine life and C-zone's profile of low operating costs and strong cash flow. Current C-zone mineral reserves are limited to a maximum height of draw (HOD) of 350 metres, leaving mineral resources between the top of C-zone and the bottom of the B3 cave. The company will reassess C-zone HOD assumptions in the coming years based on cave performance. Additionally, there is an opportunity to expand C-zone laterally, with the inclusion of additional draw points on the extraction level. The company is evaluating the potential to add additional draw points on the eastern side of the C-zone footprint to mine the lower portion of East extension.

The upper part of the East extension contains a wide high-grade core and is currently being evaluated as a potential stoping mine. With the completion of the East extension drilling campaign in 2023, the company is advancing a scoping study toward a potential mineral resource and mineral reserve estimate for the zone. As the zone is entirely above the elevation of the C-zone footprint, C-zone materials handling, ventilation and dewatering infrastructure could be utilized, reducing capital investment.

D-zone is the continuation of the same orebody as Lift 1, B3 and C-zone, and is considered as a potential fifth block cave. D-zone has the potential to continue to improve as the deposit is extended at depth with additional drilling. The company intends to continue drilling D-zone with the objective of developing a critical mass of mineral resources to support a prefeasibility study, which could result in a step-change in New Afton mineral reserves.

In addition to the existing large mineral resource base, the company is actively testing several targets for potential new underground mining zones outside of the main deposit. In 2020, New Gold defined three drill targets through analysis of alteration, geochemical data and artificial intelligence; AI-southeast, AI-north and AI-west. Drill testing of these targets has confirmed copper-gold mineralization with favourable alteration and metal zonation, including a high-grade copper intersection at AI-southeast, reported herein. Follow-up drilling has been limited due to a lack of suitable underground drill locations as B3 and C-zone cave construction was prioritized. The exploration strategy includes the development of a 370-metre drift to accelerate underground exploration drilling and provide ideal drill platforms for resource development over the coming years.

K-zone represents a potential zone of porphyry copper-gold mineralization in addition to the AI targets from 2020, reported herein. These discoveries highlight the high prospectivity at New Afton and, while still in the early stages of drilling, could potentially unlock new mining zones above the C-zone footprint elevation.

Looking outside the New Afton underground mine, the company has identified further strategic opportunities for mine life extension, both on the New Afton land package and regionally within south-central British Columbia, leveraging on New Afton's processing plant, infrastructure and tailings storage facility, which have sufficient capacity to process significantly more ore beyond the current New Afton mine life. The company is launching a regional-scale mineral system and machine-learning driven prospectivity analysis with the primary objective of discovering the next generation of porphyry copper-gold deposits in south-central British Columbia. Following New Afton's recent success with ore purchasing, the company is assessing exploration opportunities at its existing properties in the region for high-grade ore as supplementary mill feed to generate incremental cash flow.

Drilling update on new copper-gold zones

K-zone

New Gold is pleased to report drilling results at K-zone, a distinct and promising zone of porphyry copper-gold mineralization situated 200 metres east of East extension. The K-zone is characterized by disseminated chalcopyrite mineralization hosted within potassic-altered diorite, defining a trend subparallel to the East extension zone. Boreholes EA23-455 and EA23-462 intersected 20 metres (estimated true width) of 0.32 g/t gold and 0.27 per cent copper mineralization, and 14 metres (estimated true width) of 0.64 g/t gold and 0.67 per cent copper mineralization, respectively. Future exploration will utilize the planned exploration drift, which is anticipated to improve the drilling angle and allow testing the up-dip continuation of the K-zone where a zonation to higher-grade bornite-dominated mineralization is targeted based on metal zonation observed elsewhere within the mine, including at East extension. A table with all K-zone assay results from 2020 to 2023, including results from non-representative boreholes drilled along the zone, are presented in Appendix A to this news release.

AI-southeast

The company reports the intersection of a potassic-alteration-dominated mineralized copper-gold zone at AI-southeast, located below the calc-potassic HW1 zone. Borehole EA21-302 intersected 40 metres (estimated true width) of 0.56 g/t gold and 1.03 per cent copper mineralization within potassic alteration, interpreted to be the top of the calc-potassic to potassic transition zone, mimicking the alteration and metal zonation identified elsewhere within the mine, where the potassic zone typically shows increased grades and continuity. The 2024 AI-southeast exploration campaign anticipates targeting the down-dip continuation of the zone utilizing the planned K-zone underground exploration drift mentioned above.

Regional exploration

Strong focus on south-central British Columbia

The company maintains a keen interest in south-central British Columbia, recognized as a prospective region for gold and porphyry copper mineralization, the largest copper-producing region in Canada. New Gold has extensive experience in alkalic porphyry systems, a likely competitive advantage in exploring for copper-gold mineralization within the region. The company also harnesses state-of-the-art innovations in geophysics and spectral geochemistry to enhance prospects for discovery.

The company has launched a regional-scale mineral system and machine-learning driven prospectivity analysis, facilitated by its collaboration with Mira Geoscience. This initiative, complemented by cutting-edge MDRU porphyry vectoring, geophysical analysis and district-scale copper-isotope studies in partnership with University of Michigan and Juniata College, forms a cohesive strategy for expediting the discovery of copper and gold within new and known search spaces.

Little Fort

The company consolidated 14,000 hectares of mineral claims encompassing the Little Fort property in south-central British Columbia. Situated within a well-established alkalic porphyry belt, located 110 kilometres by highway north of the New Afton processing plant, this property boasts a multitude of documented mineral occurrences, ranging from historical workings to advanced prospects, all indicative of a copper-gold porphyry system. Several mineral occurrences within the property underscore high prospectivity of this area, hinting at the potential for an undiscovered porphyry. The 2023 exploration campaign is meticulously geared toward target generation, encompassing soil geochemistry, geological mapping and induced polarization geophysics. Fieldwork in 2024 is expected to include advanced geophysical assessments across the entire property, revising 3-D geological models and interpretations, and employing property-scale machine-learning-based target generation supported by ALS GoldSpot. The company was granted a five-year notice of work drilling permit and plans to initiate drilling on newly generated targets at Little Fort in 2024.

Meridian

The company completed a successful 2023 exploration campaign on the Meridian property. This high-grade orogenic gold prospect spans 615 hectares of contiguous claims located 310 kilometres by highway from the New Afton processing plant. The property has a history of underground mining dating back to the early 1900s and 1930s and centres around the Camborne Fault, a known prospective structure regionally associated with numerous gold and silver occurrences. The company has identified exploration potential over a four-kilometre-long corridor, including gold-bearing quartz veins defined by surface and underground mapping over one kilometre. Fieldwork to date has encompassed geological mapping, chip sampling, lidar (light detection and ranging) surveys, drone magnetometry, and digitization of historical underground workings. The company plans to initiate a drilling campaign at Meridian in 2024, with a five-year notice of work drilling permit submitted and pending approval.

About New Gold

New Gold is a Canadian-focused intermediate mining company with a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New Afton copper-gold mine. The company also holds other Canadian-focused investments. New Gold's vision is to build a leading diversified intermediate gold company based in Canada that is committed to the environment and social responsibility.

QA/QC procedure

New Gold maintains a quality assurance/quality control (QA/QC) program at its New Afton mine operation using industry best practices and is consistent with the QA/QC protocols in use at all of the company's exploration and development projects. Key elements of New Gold's QA/QC program include chain of custody of samples, regular insertion of certified reference standards and blanks, and duplicate check assays. Drill core is sampled at regular two-metre intervals, halved and shipped in sealed bags to Activation Laboratories Ltd. in Kamloops, B.C. Additional information regarding the company's data verification and quality assurance processes is set out in the Feb. 28, 2020, New Afton National Instrument 43-101 technical report titled "Technical Report on the New Afton Mine, British Columbia, Canada" available on SEDAR+.

Technical information

The scientific and technical information relating to the drilling update on the new copper-gold zones and the regional exploration contained herein has been reviewed and approved by Dr. Jean-Francois Ravenelle, vice-president, geology, for the company. All other scientific and technical information contained in this news release has been reviewed and approved by Yohann Bouchard, executive vice-president and chief operating officer of New Gold. Dr. Ravenelle is a professional geologist and a member of the Association of Professional Geoscientists of Ontario and the Ordre des Geologues du Quebec. Mr. Bouchard is a professional engineer and member of the Professional Engineers of Ontario. Dr. Ravenelle and Mr. Bouchard are each a qualified person for the purposes of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

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