2009 HIGHLIGHTS

  • Gold production in 2009 increased 29% to 301,773 ounces from 233,103 ounces in 2008
  • Total cash cost(1) in 2009 decreased 18% to $465 per ounce sold, net of by-product sales, from $566 per ounce sold in 2008
  • Earnings from mine operations of $88.6 million for 2009 versus $21.4 million in the prior year
  • Cash flow from operations of $79.0 million for 2009 versus $23.1 million in the prior year
  • 2009 year-end cash balance of $271.5 million, including $9.2 million of restricted cash, versus $182.0 million in 2008
  • Completed Western Goldfields Inc. business combination; New Gold is now a fully-funded, growth-oriented company
  • Strengthened our balance sheet - Since December 31, 2008, and including certain transactions completed in early 2010, New Gold has improved from a $30 million net debt position to an approximately $132 million net cash position, excluding the expected cash proceeds from the completion of the Amapari sale
  • Increased the value attributed to our assets including El Morro, Amapari and our asset backed notes, from approximately $40 million in mid-2009 to over $450 million
  • More than tripled trading liquidity and doubled analyst coverage during 2009
  • Share price appreciated 115% during 2009, significantly outpacing the 24% increase of the S&P/TSX gold index

PROVEN AND PROBABLE RESOURCES
(MILLION OZ)

Proven and Probable Resources graph

GOLD PRODUCTION
(OUNCES)

Gold Production graph

EARNINGS FROM MINE OPERATIONS
(US$ 000s)

Earnings from Mine Operations graph

YEAR ENDED DECEMBER 31
(US dollars in thousands, except where indicated otherwise) 2009 2008 2007(2)
OPERATING INFORMATION
Gold Production (oz) 301,773 233,103 149,830
Gold Sales (oz) 292,407 237,590 155,351
Average Realised Price (US $/oz)
$
983
$
863
$
721
Total Cash Cost (US $/oz), (net of by product sales)
$
465
$
566
$
349
Proven and Probable Reserves (million oz) 8.2 4.8 5.2
FINANCIAL INFORMATION
Revenues
$
323,780
$
143,083
$
131,084
Earnings (loss) from Operations
$
88,621
$
21,402
$
31,388
Net Earnings (loss)
$
(194,316)
$
(102,679)
$
14,613
Cash Flow from Operations
$
78,981
$
23,073
$
26,620
Cash and Cash Equivalents
$
262,325
$
182,013
$
149,924
SHARE DATA    
Earnings (loss) per share
$
(0.64)
$
(0.69)
$
0.27
Share price at December 31, 2009 (TSX - Canadian dollars)
$
3.80
$
1.77
$
5.10
Outstanding Shares (millions of Basic Shares) at December 31 388.8 212.8 72.6


LOOKING FORWARD

As New Gold looks forward to 2010, we expect to realize an increase in gold production primarily resulting from a full year of production from mesquite. The company also expects increased production of silver and copper, helping to further reduce costs when compared to 2009.

MINE ACTUAL
2009 GOLD
PRODUCTION (OZ.)
FORECAST
2010 GOLD
PRODUCTION (OZ.)
ACTUAL
2009 TOTAL
CASH COST(1)
FORECAST
2010 TOTAL
CASH COST(1)
Mesquite 99,298 145,000-155,000 $ 602 $ 540-$560
Cerro San Pedro 95,502 95,000-105,000 $ 407 $ 390-$410
Peak 93,247 90,000-100,000 $ 334 $ 360-$380
Amapari 13,726 -- $ 696 --
Total 301,773 330,000-360,000 $ 465 $ 445-$465

Note: Cerro San Pedro and Peak total cash cost(1) are net of by-product sales. Amapari was put on Care and maintenance on January 2, 2009. 2009 Mesquite production represents partial year from June 1, 2009 forward.

Assumptions used in the 2010 forecast include silver and copper prices of $15.00 per ounce and $2.75 per pound, respectively, and Canadian dollar, Australian dollar and Mexican peso exchange rates of $1.11, $1.18 and $13.00 to the US dollar, respectively.

(1) "Total cash cost" per ounce figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is widely accepted as the standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. New Gold reports total cash cost on a sales basis. Total cash cost includes mine site operating costs such as mining, processing, administration, royalties and production taxes, but is exclusive of amortization, reclamation, capital and exploration costs. Total cash cost is reduced by any by-product revenue and is then divided by ounces sold to arrive at the total by-product cash cost of sales. The measure, along with sales, is considered 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 cost presented do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation as a substitute for measures of performance prepared in accordance with GAAP and is not necessarily indicative of operating costs presented under GAAP. A reconciliation is provided in the MD&A accompanying the audited annual financial statements.

(2) Includes 2007 results for the Amapari Mine within operations. The Amapari Mine has been presented as a discontinued operation in 2008 and 2009.


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