Company Enters Sustained Free Cash Flow Generation Period (All amounts are in U.S. dollars unless otherwise indicated) TORONTO, July 30, 2024 /CNW/ - New Gold Inc. ("New Gold" or the "Company") (TSX:NGD) (NYSE:NGD) reports second quarter results for the Company as of June 30, 2024. Second quarter 2024 production was 68,598 gold ounces and 13.6 million pounds of copper as planned, at an operating expense of $1,156 per gold ounce sold (co-product basis)3 and all-in sustaining costs1 of $1,381 per gold ounce sold (by-product basis). Delivering the second quarter as planned resulted in strong cash flow from operations of $100 million and free cash flow1 of $20 million. The Company was free cash flow positive through the first six months of the year and has now entered a sustained free cash flow generation period. Operating to Plan Through First Half of the Year, Well Positioned for Increasing Production Profile in Second Half "The second quarter saw New Gold deliver another quarter as planned," stated Patrick Godin, President and CEO. "New Afton delivered a strong operating quarter with low all-in sustaining costs, while Rainy River made excellent progress preparing the open pit for the planned release of higher-grade ore in the second half of the year while maintaining operational discipline and delivering costs as planned. We exit the first half of the year operationally as planned, free cash flow positive, and are well positioned to deliver on our guidance targets for the year." Second quarter consolidated production was 68,598 ounces of gold and 13.6 million pounds of copper at all-in sustaining costs1 of $1,381 per gold ounce sold (by-product basis). New Afton had a strong second quarter, producing 18,300 ounces of gold and 13.6 million pounds of copper at all-in sustaining costs1 of ($433) per gold ounce sold (by-product basis). Second quarter gold and copper production were in-line with plan. The B3 cave continues to perform slightly better than plan, and C-Zone ore production is ramping up concurrent with construction of the cave footprint. Commercial production from C-Zone and crusher commissioning remains on-track for the second half of the year. Rainy River's second quarter delivered to plan, producing 50,298 ounces of gold at all-in sustaining costs1 of $1,868 per gold ounce sold (by-product basis). Prioritizing open pit waste stripping activities in the first half positioned the open pit well to release higher grade ore and deliver stronger production in the second half. The mill continues to perform well, with throughput averaging over 26,000 tonnes per day and recoveries over 90% for the quarter. Both the mine and mill are well positioned to deliver on annual guidance. Through the first six months of the year, gold production represented 42% of the mid-point of guidance, and copper production represented 49%, in-line with the previously stated outlook. For the first six months, consolidated all-in sustaining costs1 were $1,389 per gold ounce sold. With production set to increase and all-in sustaining costs set to decrease in the second half of the year, the Company remains on-track to achieve 2024 consolidated production guidance of 310,000 to 350,000 ounces of gold and 50 to 60 million pounds of copper at all-in sustaining costs1 of $1,240 to $1,340 per gold ounce sold (by-product basis). Multiple Corporate Milestones Achieved in a Positive Free Cash Flow Quarter, the Company Has Entered a Sustained Free Cash Flow Generation Period "During the quarter, we also successfully delivered an accretive transaction for our shareholders by increasing our free cash flow interest in New Afton to 80.1%," added Mr. Godin. "As we've now entered a period of sustained free cash flow, this is further enhanced with our increased interest in a world-class copper-gold mine." The Company delivered strong cash flow from operations during the second quarter of $100 million, driven by higher copper production and higher metal prices. Cash generated from operations, before changes in non-cash operating working capital1, totaled $90 million. The Company delivered free cash flow1 of $20 million in the quarter while continuing to invest in its growth projects. With the Company exiting the first half of 2024 free cash flow positive, New Gold has now entered a sustained free cash flow generation period. During the second quarter, the Company successfully entered into an agreement relating to its strategic partnership with Ontario Teachers' Pension Plan ('Ontario Teachers') whereby New Gold increased its effective free cash flow interest in New Afton to 80.1%. Ontario Teachers' free cash flow interest in New Afton was reduced from 46.0% to 19.9% in exchange for an upfront cash payment of $255 million. To fund the payment, the Company completed an oversubscribed $173 million equity financing, and borrowed $100 million from its existing revolving credit facility. Through this transaction, New Gold was successfully able to deliver a meaningful increase in attributable life-of-mine cash flow in an existing high-quality operation while maintaining its balance sheet strength and financial liquidity. As at June 30, 2024, cash and cash equivalents were $184 million, and the Company maintained a liquidity position of $461 million. During the second quarter, the Company also announced the publication of its 2023 Environmental, Social and Governance Reports ("ESG Reports") and its 2023 Task Force on Climate-Related Financial Disclosures Report ("TCFD Report"). New Gold has published an annual ESG Report since 2015 (formerly, the Sustainability Report) reporting on the sustainability-related material topics that matter most to its stakeholders. The 2023 ESG Reports and TCFD Report are available on New Gold's Sustainability Microsite, accessible through www.newgold.com. Growth Projects Nearing Completion, to Add Significant Free Cash Flow Generation "After a productive first half of 2024, our growth projects remain on track for completion by the end of the year. The second quarter saw numerous milestones at both the Rainy River underground Main project and the New Afton C-Zone block cave project that have positioned us for success. Rainy River remains on track to achieve first ore from the underground Main Zone by the end of this year, while New Afton expects to achieve commercial production at C-Zone in the second half of 2024. As we've now entered a period of free cash flow generation, bringing both of these projects online as planned will further build on that free cash flow generation as outlined in our three-year operational outlook," added Mr. Godin. At Rainy River, underground development rates continued to ramp up during the second quarter and are expected to continue to increase into the second half of the year. As previously discussed, one of the priorities for 2024 is to establish the primary ventilation circuit. At the end of the second quarter, both the ODM East ventilation loop and the fresh air raise were approximately 50% complete, in-line with plan. With the development of the in-pit portal set to commence in the third quarter, underground Main Zone remains on-track for first ore in the fourth quarter of 2024, with the ramp-up in underground production to approximately 5,500 tonnes per day by 2027. At New Afton, the Company reiterates expectations to commission the C-Zone gyratory crusher and conveyor system on time, with the cave achieving hydraulic radius in the second half of 2024. Lateral development continues to advance on plan, with over 80% of development metres complete. C-Zone cave construction remains on track to achieve hydraulic radius in the second half of 2024. The new C-Zone gyratory crusher and conveyor system continued to make significant progress towards completion in the second half of 2024. With C-Zone development and the gyratory crusher and conveyor system nearing completion, the increase in processing rates, and decrease in costs is expected to generate meaningful free cash flow over the coming years. Exploration Milestones Achieved in the Quarter, Sustainable Production Remains the Focus "We made significant progress with our exploration efforts at both operations during the second quarter. After allocating additional funding to new opportunities at Rainy River earlier in the year, our exploration team advanced numerous high priority surface and underground targets. At New Afton, with the completion of the exploration drift in the quarter, the team has been able to advance priority near-mine targets. Our exploration strategic objective is to target a sustainable production platform of approximately 600,000 gold equivalent ounces per year with a line of sight until at least 2030. We are targeting releasing an additional exploration update to the market later in the third quarter," stated Mr. Godin. At Rainy River, exploration drilling continues to make meaningful progress from both surface and underground. Through the first half of 2024, the Company has drilled approximately 20,000 metres at Rainy River testing the down-plunge extension of ODM Main and 17 East Zones at depth, the Intrepid Strike-Extension, and exploring the Gap zone located between the Intrepid and Main Zones. During the second quarter, surface drilling prioritized targets with potential for open pit extraction including NW-Trend, Zone 280, and ODM East. Drilling continues to progress as planned for both surface and underground targets. Rainy River's priority is to sustain mill throughput beyond 2029. Exploration efforts at New Afton achieved multiple notable milestones during the quarter. Following the intersection of high-grade copper-gold porphyry mineralization at K-Zone (refer to the Company's May 29, 2024 news release for further information), the exploration drift being developed to provide additional drill platforms was completed and drilling of the K-Zone and AI-Southeast targets from the drift commenced as planned. The Company also completed exploration drilling to extend the D-Zone resource envelope. New Afton continues to execute on its exploration strategy to extend the mine life beyond 2030. Exploration efforts remain focused on potential near-mine zones located above the C-Zone extraction level to minimize capital investment and maximize free cash flow generation. Consolidated Financial Highlights Q2 2024 Q2 2023 H1 2024 H1 2023 Revenue ($M) 218.2 184.4 410.3 386.0 Operating expenses ($M) 109.5 104.9 216.3 222.1 Net earnings (loss) ($M) 53.1 (2.6) 9.6 (34.4) Net earnings (loss), per share ($) 0.07 — 0.01 (0.05) Adj. net earnings ($M)1 17.0 11.6 30.1 30.0 Adj. net earnings, per share ($)1 0.02 0.02 0.04 0.04 Cash generated from operations ($M) 100.4 56.4 155.2 117.0 Cash generated from operations, per share ($) 0.14 0.08 0.22 0.17 Cash generated from operations, before changes in non-cash operating working capital ($M)1 90.4 65.2 163.0 140.9 Cash generated from operations, before changes in non-cash operating working capital, per share ($)1 0.12 0.10 0.23 0.21 Free cash flow ($M)1 20.4 (26.1) 5.6 (38.7) Revenue increased over the prior-year periods primarily due to higher metal prices and higher copper sales volume, partially offset by lower gold sales volume. Operating expenses increased slightly over the prior-year period as the increase in copper production was partially offset by the decrease in gold production. For the six months ended June 30, 2024, operating expenses decreased over the prior-year period due to lower gold production and sales, and an inventory write-up gain at Rainy River during the first quarter of 2024. Net earnings increased over the prior-year periods primarily due to an increase in revenues resulting from higher metal prices, and a net gain on the derecognition of the New Afton free cash flow obligation. Adjusted net earnings1 increased in the second quarter compared to the prior-year period due to higher revenues resulting from higher metal prices, partially off-set by higher depreciation. For the six months ended June 30, 2024, adjusted net earnings1 was consistent when compared to the prior-year period. Cash generated from operations and free cash flow1 increased over the prior-year periods primarily due to higher revenue and positive working capital movements. The Company delivered free cash flow in the first half of 2024 while continuing to invest in its growth projects. June 30, 2024 cash and cash equivalents were $184 million. Consolidated Operational Highlights Q2 2024 Q2 2023 H1 2024 H1 2023 Gold production (ounces)2 68,598 76,527 139,496 159,004 Gold sold (ounces)2 67,697 74,219 137,774 161,426 Copper production (Mlbs)2 13.6 12.0 26.9 22.3 Copper sold (MIbs)2 13.3 10.1 25.3 19.5 Gold revenue, per ounce ($)3 2,313 1,948 2,185 1,903 Copper revenue, per pound ($)3 4.26 3.61 3.97 3.70 Average realized gold price, per ounce ($)1 2,346 1,970 2,216 1,927 Average realized copper price, per pound ($)1 4.49 3.82 4.19 3.96 Operating expenses per gold ounce sold ($/ounce, co-product)3 1,156 1,063 1,131 1,029 Operating expenses per copper pound sold ($/ounce, co-product)3 2.35 2.57 2.39 2.86 Depreciation and depletion per gold ounce sold ($/ounce) 1,066 732 980 680 Cash costs per gold ounce sold (by-product basis) ($/ounce)1 740 898 808 911 All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 1,381 1,582 1,389 1,460 Sustaining capital ($M)1 31.5 35.6 57.4 61.9 Growth capital ($M)1 40.8 36.0 75.9 72.8 Total capital ($M) 72.3 71.6 133.3 134.7 Rainy River Mine Operational Highlights Rainy River Mine Q2 2024 Q2 2023 H1 2024 H1 2023 Gold production (ounces)2 50,298 59,882 103,016 126,083 Gold sold (ounces)2 49,513 59,529 102,610 131,420 Gold revenue, per ounce ($)3 2,336 1,965 2,206 1,920 Average realized gold price, per ounce ($)1 2,336 1,965 2,206 1,920 Operating expenses per gold ounce sold ($/ounce)3 1,310 1,138 1,265 1,082 Depreciation and depletion per gold ounce sold ($/ounce) 1,002 657 893 600 Cash costs per gold ounce sold (by-product basis) ($/ounce)1 1,231 1,090 1,197 1,040 All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 1,868 1,720 1,749 1,531 Sustaining capital ($M)1 29.4 31.6 51.6 53.9 Growth capital ($M)1 10.4 4.5 17.8 10.3 Total capital ($M) 39.8 36.1 69.4 64.1 Operating Key Performance Indicators Rainy River Mine Q2 2024 Q2 2023 H1 2024 H1 2023 Open Pit Only Tonnes mined per day (ore and waste) 119,023 130,488 105,305 124,517 Ore tonnes mined per day 17,679 34,146 17,078 35,257 Operating waste tonnes per day 56,344 61,796 53,915 61,082 Capitalized waste tonnes per day 44,999 34,545 34,313 28,178 Total waste tonnes per day 101,344 96,342 88,228 89,260 Strip ratio (waste:ore) 5.73 2.82 5.17 2.53 Underground Only Ore tonnes mined per day 553 1,001 715 884 Waste tonnes mined per day 1,423 436 1,190 447 Lateral development (metres) 1,307 846 2,258 1,722 Open Pit and Underground Tonnes milled per calendar day 26,068 23,252 25,545 22,828 Gold grade milled (g/t) 0.74 0.97 0.78 1.04 Gold recovery (%) 91 91 91 91 Second quarter gold production was 50,298 ounces. For the six months ended June 30, 2024, gold production was 103,016 ounces. The planned decrease over the prior-year periods is primarily due to the mining sequence being in lower grade ore as planned, partially offset by higher tonnes processed. Production is expected to strengthen in the second half of the year as higher grade ore is accessed. Operating expense per gold ounce sold increased over the prior-year periods primarily due to lower sales volumes. All-in sustaining costs1 per gold ounce sold (by-product basis) increased over the prior-year periods due to lower sales volumes, partially offset by lower sustaining capital spend. All-in sustaining costs per gold ounce sold are expected to decrease in the second half of 2024 as production increases. Total capital increased over the prior-year periods due to higher growth capital spend, partially offset by lower sustaining capital spend. Sustaining capital1 is primarily related to capitalized waste, capital components, and tailings management. Growth capital1 is related to underground development as the underground Main and Intrepid zones continue to advance. Free cash flow1 for the second quarter was $12 million (net of stream payments), an increase over the prior-year period primarily due to higher gold prices and positive working capital movements. Free cash flow1 for the six months ended June 30, 2024 was $9 million (net of stream payments), a decrease compared to the prior-year period primarily due to a decrease in revenues and higher growth capital spend, but in-line with the planned open pit sequence for the first half of the year as outlined in the Company's guidance. New Afton Mine Operational Highlights New Afton Mine Q2 2024 Q2 2023 H1 2024 H1 2023 Gold production (ounces)2 18,300 16,645 36,479 32,921 Gold sold (ounces)2 18,184 14,690 35,164 30,006 Copper production (Mlbs)2 13.6 12.0 26.9 22.3 Copper sold (Mlbs)2 13.3 10.1 25.3 19.5 Gold revenue, per ounce ($)3 2,250 1,878 2,124 1,829 Copper revenue, per ounce ($)3 4.26 3.61 3.97 3.70 Average realized gold price, per ounce ($)1 2,372 1,988 2,244 1,957 Average realized copper price, per pound ($)1 4.49 3.82 4.19 3.96 Operating expenses ($/oz gold, co-product)3 736 757 738 799 Operating expenses ($/lb copper, co-product)3 2.35 2.57 2.39 2.86 Depreciation and depletion ($/ounce) 1,231 1,032 1,224 1,022 Cash costs per gold ounce sold (by-product basis) ($/ounce)1 (597) 121 (325) 349 Cash costs per gold ounce sold ($/ounce,co-product)1 806 823 877 1,276 Cash costs per copper pound sold ($/pound, co-product)1 2.57 2.80 2.62 3.14 All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 (433) 447 (107) 664 All-in sustaining costs per gold ounce sold ($/ounce, co-product)1 856 920 874 972 All-in sustaining costs per copper pound sold ($/ounce, co-product)1 2.73 3.13 2.83 3.48 Sustaining capital ($M)1 2.0 4.1 5.8 8.1 Growth capital ($M)1 30.4 31.4 58.1 62.6 Total capital ($M) 32.5 35.5 63.9 70.6 Operating Key Performance Indicators New Afton Mine