BREAKING NEWS

New Gold Announces Sale of Peak Mines for $58 Million

New Gold Inc. ("New Gold") (TSX:NGD) (NYSE American:NGD) today announces that it has entered into a binding agreement with Aurelia Metals Limited ("Aurelia") to sell the Peak Mines located in Cobar, New South Wales, Australia for cash consideration of $58 million (the "Transaction").

"Peak has generated significant value for New Gold and predecessor companies over its 25 years of operation," stated Hannes Portmann, President and Chief Executive Officer. "Peak's robust history of replacing and growing its mineral resources has been key to its successful contribution to New Gold's portfolio of assets. The sale of Peak Mines will offer Aurelia the opportunity to grow its asset base in the Cobar region by leveraging Peak's great team, strong track record of performance, and unlocking its longer-term potential. Today's transaction is another step to enhance New Gold's liquidity and will further enable the company to focus on its Americas-centric portfolio of operating mines and development projects."

"On behalf of New Gold, I would like to thank the Peak team for their commitment and dedication, and wish them continued success as they move forward with Aurelia," added Mr. Portmann.

Aurelia intends to fund the Transaction through a combination of an A$45 million debt facility provided by the Investec Group and an equity placement in the order of A$70 million. Aurelia's largest shareholder, Pacific Road Capital Management Pty Ltd, has committed to Aurelia to subscribe for up to A$35 million in the equity raising and increase their interest in Aurelia to 36.7% from 33.6%, subject to shareholder approval. Aurelia will pay at least a $3 million deposit, which will be retained by New Gold in certain circumstances if the Transaction is not completed.

The Transaction is subject to customary closing conditions, including Aurelia shareholder approval of a portion of the equity financing and consent from the New South Wales Minister responsible for the Mining Act 1992 for the transfer of control of certain exploration licenses, and is expected to close in the first quarter of 2018.

Macquarie Capital acted as financial advisor to New Gold and Corrs Chambers Westgarth acted as New Gold's legal advisor.

About New Gold Inc.
New Gold is an intermediate gold mining company with a portfolio of five producing assets in top-rated jurisdictions. The New Afton and Rainy River Mines in Canada, the Mesquite Mine in the United States, the Peak Mines in Australia and the Cerro San Pedro Mine in Mexico (which transitioned to residual leaching in 2016), provide the company with its current production base. In addition, New Gold owns 100% of the Blackwater project located in Canada. New Gold'sobjective is to be the leading intermediate gold producer, focused on the environment and social responsibility.

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