Letter I received today from New GoldDecember 3, 2008
Dear Shareholders,
New Gold’s third quarter results released on November 12, 2008 updated shareholders on a revised New Afton
development schedule. We are including below a further update on the Company.
Similar to most mining companies, New Gold’s share price has been negatively impacted by the volatile financial
markets and fear of recession. This has been exacerbated by the poor performance at our Brazilian Amapari mine
and lack of capital to complete the New Afton development project in Kamloops, British Columbia, Canada.
The mining companies who have been affected the most by the recent turmoil in financial markets are those who do not have the capital needed to complete their development projects. To mitigate against this and maintain a solid financial position, New-Gold is slowing development .at the New Afton project. The new 2009 schedule requires spending US$83 million versus the fast track schedule at New Afton which required US$320 million.
Management continues to monitor cash flow very closely. The three operating mines all produce positive cash flow
at current metal prices — even Amapari where considerable changes have been made at the operating level.
Amapari’s performance is monitored monthly and management will not operate the mine if it cannot continue to
generate positive cash flow. New Gold intends to maintain a strong financial position.
New Gold had cash and cash equivalents of US$251.1 million as at September 30, 2008 and is well positioned to
weather a lower metal price environment, while maintaining flexibility in a market of evolving opportunities in the
gold sector.
New Afton is an important part of New Gold’s internal growth strategy. Management is working to obtain the
required funding to resume full development of the project at the end of 2010, with full production expected to start
in the second half of 2012. New Gold’s Board of Directors, which has tremendous experience in raising capital, is
working with management to facilitate these efforts.
New Gold is anticipating gold production of approximately 250,000 ounces in 2008. For further information about
New Gold, you can visit our website at www.newgold.com or call toll free at 1-888-315-9715.
Thank you for your interest in New Gold Inc.
Regards,
Robert Gallagher
President and Chief Executive Officer