New Gold Increases Exposure in New Afton Copper/Gold Mine to 80% and Launches US$150 Million Bought Deal Financing

(All dollar figures are in US dollars unless otherwise indicated)

TORONTO, May 13, 2024 (GLOBE NEWSWIRE) -- New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE American: NGD) is pleased to announce that it has entered into an agreement relating to its strategic partnership with Ontario Teachers’ Pension Plan (“Ontario Teachers’”) at the New Afton Mine (“New Afton”), whereby New Gold will increase its effective free cash flow interest in New Afton to 80.1% (the “Transaction”).

On closing of the Transaction, Ontario Teachers’ free cash flow interest in New Afton will be reduced from 46.0% to 19.9% in exchange for an upfront cash payment of $255 million from New Gold. New Gold will fund the cash payment with cash on hand, borrowings from its existing revolving credit facility and net proceeds from a concurrent bought deal equity financing of common shares of New Gold (“Common Shares”) for approximately $150 million.

Anticipated Benefits to New Gold Shareholders

• Increased free cash flow interest in an attractive copper/gold mine – With C-Zone on-track to achieve commercial production in the second half of 2024, New Afton is expected to enter a period of significant free cash flow growth driven by increasing production and improved costs.
• Accretive and disciplined transaction – Expected to deliver a meaningful increase in attributable life-of-mine cash flow while maintaining New Gold’s balance sheet strength and financial liquidity.
• Investment in an existing high-quality operation – Through many years of building and operating the New Afton mine, New Gold has developed extensive technical, operational, and social knowledge and expertise. The Transaction provides growth without requiring any increase in general and administrative expenses.
• Increased upside exposure – New Gold’s renewed focus on exploration activities provides the New Afton mine with the potential to add value by improving the production profile and extending mine life.

“This is an excellent transaction where we are able to increase our free cash flow exposure in a copper and gold asset which we already own and operate. This transaction is expected to allow us to grow accretively with no diligence risk and increase our free cash flow interest at New Afton,” stated Patrick Godin, President and CEO. “With key C-Zone milestones set for completion later this year, New Afton is on the verge of attractive production growth and cost improvement that we believe will lead to increased free cash flow generation. Our goal is not only to maximize this free cash flow generation at the mine, but to also maximize benefits for our shareholders.”