New Afton Sustainability Newsletter

2016 | FALL ISSUE

NOTE FROM Health & Safety Manager

Community Spotlight

Come and see our volunteers at these upcoming events:

• Basic for Babies

- November 18, 2016 at Hotel 540

• Kamloops Santa Claus Parade

- November 26, 2016

• Toys for Kids Breakfast

- December 7, 2016 at Hotel 540

Our Achievements

Local Award Nominations

• The Mayor’s Award: Business in Support of the Arts

• Kamloops Chamber of Commerce: Rocky Mountaineer Environment Stewardship Award

New Afton is committed to providing a safe workplace for all of our employees, contractors and visitors on site. We continually strive to improve safety by collaborating with our employees and stakeholders to achieve this goal. Above all, our objective is to continually develop our safety culture at all levels within the organization with the vision of sending workers at our operation home safely every day to enjoy the things they all work hard for.

We encourage our employees to be proactive in hazard recognition and raise concerns in order to prevent incidents before they occur. We are very proud of how the safety and reporting culture has evolved and credit all of our employees in achieving industry leading safety performance.

If you would like to learn more about our operation or would like to provide feedback please use our feedback hot line 250.377.2100 or email us at info@newgold.com.

Kevin Mihalicz

Health & Safety Manager

Our Performance

Three months ended June 30

2016 2015OUTPUTS

Ore Processed (thousand tonnes) 1,393 1,202

Tailings Produced (tonnes) 1,356,102 1,169,139

Average gold grade (g/tonne) 0.68 0.76

Average copper grade (%) 0.84 0.88

Copper Produced (million lbs) 22.1 19.9

Gold Produced (thousand ounces) 25.3 24.4

Health and Safety Performance

Safety...Live by it!New Afton’s safety slogan toencourage employees to live the safety culture both at work and at home.

SAFETY STATISTICS 2016

Year to Date - August 31

Work related fatalities 0

Lost Time Injuries (LTI) 0

Lost Time Injury Frequency Rate (LTIFR)1 0

Restricted Work Injuries 3

Medical Treatments 2

Total Reportable Injury Frequency Rate (TRIFR)2 1.4

Safety and Health Complaints 0

Man Hours 713,943

Safety Training Hours 16,832

New Afton’s employees are passionate about safety both on and off the job. A big thanks to employee volunteers of our Safety Initiative Committee. They have been successful in taking Safety into the community by delivering safety presentations to high school students in Grade 10 in the local community. This initiative was developed directly by volunteers at New Afton to help prepare young workers entering the workforce and encourage safety as a top priority. The goal of the committee is to educate local students on the importance of safety both at work and at home.

New Afton is proud to say that we officially milled our 20th million tonne of ore on September 20th, 2016. Our employees should be very proud of the effort they put forward to achieve this accomplishment.

¹ Lost-Time Injury Frequency Rate (LTIFR) is the number of lost-time injuries per 200,000 hours worked. (Lost-Time Injuries x 200,000 hours) ÷ Total hours worked.

² Total Reportable Injury Frequency Rate (TRIFR) is the number of injuries per 200,000 hours worked. (Lost-Time

Injuries + Medical Treatment Injuries + Restricted Duties Injuries) x 200,000 hours ÷ total hours worked.

New Afton Sustainability Newsletter 2016 | Fall Issue

Environment PerformanceEnvironmental Scorecard

2016 YTD- Aug 31-16

2015 2014

Environmental Non-Compliances 0 0 1

Externally Reported Spills 2 9 14

Number of Fines Incurred 0 0 0

Environmental Complaints 0 0 1

Malaise TrappingWhat are those tents for?

New Gold’s New Afton Mine partnered with the Biodiversity Institute of Ontario to work on the DNA barcoding project to aid in tracking our potential impact on biodiversity and to hopefully demonstrate the effectiveness of the site restoration.

New Afton started collecting insects from 4 locations on site in 2013, the goal is to have an idea on the genetic diversity and species compilation for future reclamation at the end of mine life. The first set of collection netted us 51,264 different specimens with 3956 distinct species. In 2016, we have added a pitfall trap to collect the creepy crawlies on the ground in the alkali wetland area. So far we have caught a few different spiders, ants, and beetle types. The malaise traps are used to track long-term trends in a standardized way. The containers use ethanol alcohol to preserve the specimen and the DNA.

To monitor the program we have our Environment Technician change out the collection containers weekly and freeze them until they are ready to be shipped to the lab. In the lab there are 3 main steps in finding the barcode – DNA extraction, PCR Amplification, and DNA Sequencing. Tissue samples are taken (say a leg from each specimen) then the samples are isolated using a high throughput robotics (think bugs in a blender), using Sanger sequencing technology the products where read via laser and produced a DNA sequence that can be interpreted called “DNA barcodes”. Barcode of Life Database houses the collection of DNA samples from around the world. At New Afton we are very excited to learn about our impacts and the progress towards site restoration.

To learn more, check out the following websites:

http://biodiversitygenomics.net/projects/biobus/

http://malaiseprogram.com/

Employee SpotlightJeanette GagnonUnderground MinerWow 10 years. May 2006 I started at New Gold, as a surface labrourer/equipment operator. During this time on surface I found my self wanting to be part of the very allied group of people that make their living underground. “How did I get there?” Well through hard work and determination I made it! Yes it is dark, and grey with the odd splash of orange paint here and there, but it is not the decor that drew me there. It is the people, the scene of belonging to a group that works together as a team to accomplish one common goal.

I currently am a production scoop operator, trying to prefect my skills and gain as much knowledge as I can to further my career. I feel that I am very fortunate to have the support and opportunity to learn as much as I have and look forward to many more years of learning.

There are many perks to working here but the best part of the job is the 7 on 7 off shift, and the fact that I get to come home and sleep in my own bed, and still being able to be a big part of my children’s lives.

I would like to take this time to thank K.M. and the many mentors that I have had over the years for believing in me. Thank you all, I would not be where I am today, without your guidance and support.

- Jeanette Gagnon

OUR PEOPLE

At New Afton, we acknowledge our success can be attributed back to our workforce. Together we can accomplish the goals set before us as at the mine site.

Looking back, members of our team have now been with the New Afton Team for many years contributing to the overall success of the operations. This issue, New Afton would like to spotlight Jeanette Gagnon, one of our Underground Miners. Jeanette is celebrating 10 years with the New Afton Team. A big thank you to Jeanette for her dedication to the New Afton Team.

Three Months ended August 31 2016

Total # of Employees on Payroll 439 100%

Employees from BC 403 92%

Employees hired from Kamloops region 343 78%

Employees hired from BC, outside Kamloops 60 14%

Employees from outside BC 30 7%

Employees from outside Canada 6 1%

First Nations Employees 102 23%

First Nations Employees from Tk’emlúps te Secwepemc and Skeetchestn Indian Band

34 8%

Female Employees 52 12%

Male Employees 387 88%

Average Age 40.1

New Afton Sustainability Newsletter 2016 | Fall Issue

Maintenance Reliability

Reliability

The Reliability Group at New Afton continues the pursuit of lubrication excellence on site! Working together with other mine staff, this ongoing project has yielded many initiatives aimed at extending equipment life, reducing oil consumption, reducing unnecessary labor, and ultimately saving money.

Some of these initiatives include:

• Choosing better lubricants for our equipment and our operating conditions. There are often better choices for our conditions than the manufacturer’s generic recommendations.

• Utilizing fine filtration to keep oils and diesel clean. Our portable filters remove almost 99% of particles the size of bacteria and larger in one pass.

• Sampling the lubricants in our equipment regularly. By watching trends, we can anticipate convenient times to change the oils and keep an eye on how well our equipment is operating. We regularly monitor the oil in about 1500 different components on site.

• Changing oil based on its condition instead of after a period of time. Today’s high quality lubricants can last much longer than the equipment manufacturer’s recommendations. All of our Fixed Plant and many large Mobile Equipment oil reservoirs are changed on condition.

• Optimizing oil change intervals. The oil in some components, like engines, is still changed based on time. We extend the time between these oil changes if possible to reduce downtime and labor time, reduce waste oil, and maintain good protection.

• Improving oil handling techniques. Redundant labeling, color-coding, and the use of proper containers to fill equipment is key to keeping bulk oil clean and uncontaminated with other oils.

• Educating staff on lubricants and proper lubricant usage. Industry experts are brought in to improve lubrication knowledge for engineers, millwrights, and heavy-duty mechanics.

We track the value of our initiatives. When considering oil and labor costs alone, New Afton saves over $500,000 per year due to lubrication excellence efforts, and has saved over $1.5 million since this process began 4 years ago. These savings do not include increased availability and improved equipment life, so it’s clear that these are very conservative figures.

Also, in 2015 New Afton sent 41% (51,000L) less waste oil off for recycling than we did in the year 2012. In fact, when comparing to manufacturer’s recommendations, we have diverted over 280,000L of waste oil from recycling in the past 4 years through optimization efforts.

We are proud of how all New Afton staff recognizes the importance of striving for a world-class lubrication program and the substantial economic benefits it brings.

C0-op Student spotlightLizzy Ignace

Environmental co-op studentWeyt-kp! Lizzy Ignace ren skwekwst, Skeetchestn ren St’e7qin. Hello, my name is Lizzy Ignace and I am from Skeetchestn Indian Band. I have worked for New Gold, New Afton over the past four years. I started out in 2013 working as a summer student in the Geology - Technical Services Department and would continue to work in Geology for the next three summers. Over those summers, I learned a lot about underground mining, geology, and learning to drive a stick! It is during this time, that I decided to switch from a Bachelor of Arts at Thompson Rivers University to a Bachelor of Natural Resource Sciences with the hope of working in Environment. And now, I have just finished working an 8 months co-op in the Environmental Department at New Afton. This was extremely rewarding as I learned many new skills that will carry over into the future, for both work and school. The best parts about working in the Environmental Department were definitely the people, the skills that I acquired and will take forward with me, and the projects that I was a part of. New Afton has been an amazing place to work, and I can’t wait to see where all of the skills and knowledge that I now have, will take me!

- Lizzy Ignace

Energy PerformanceAt the Clean Energy Ministerial in San Francisco in June 2016, New Afton Mine was one of three winners of the 2016 Energy Management Award of Excellence. This award is in recognition of New Afton’s energy management achievements achieved through the implementation of the ISO 50001 energy management system. New Afton continues to be the only mine in North America to have implemented ISO 50001.

Energy conservation initiatives at New Afton continue to deliver excellent results, with a record low total energy use per tonne of ore processed by the mill being recorded in June this year. Major contributors to this include the ventilation management initiative, which is currently saving the mine in excess of 6 GWh of electricity per year, and a SAG mill discharge grate design change in January 2016, which provide a step change improvement in the energy efficiency of the SAG mill.

In terms of energy management, the primary focus in 2016 has been on the integration of energy management into the existing systems at the mine through better utilization of the Energy Team. Initiatives

for the remainder of 2016 are to reduce the underground compressed air use and to improve the diesel use reporting systems, in order to better understand the mines diesel use, which will, in turn, help us to optimize our diesel consumption and minimize greenhouse gas emissions.

New Afton Sustainability Newsletter 2016 | Fall Issue

OUR COMMUNITYCommunity - Earth Rangers At New Afton we are proud to be apart of the local community of Kamloops. One way to give back to the local area is by the sponsorship of the Earth Rangers program in the 2016/2017 school year. Earth Rangers is a Canadian Kids’ conservation organization, dedicated to educating children and families about biodiversity and empowering them to become directly involved in protecting animals and their habitats. They use original elements such as video, interactive games and of course, animals, to engage with school aged kids. All of these tools combine to engage children, while demonstrating the importance of biodiversity protection, and leave students with the knowledge that we all have the power to make a difference.

This year, New Afton is sponsoring 6 local schools to receive school wide assemblies and two classroom visits each:

1. Arthur Stevenson Elementary

2. Marion Schilling Elementary

3. Pacific Way Elementary

4. Sk’elep School of Excellence

5. Skeethcestn Community School

6. Westmount Elementary

Earth Rangers identify the School Outreach Program is one of the most powerful ways of connecting large numbers of students with conservation, as well as introducing them to our Earth Rangers community. Often, students join the Earth Rangers membership program as a result of seeing a school presentation.

Word from the Kamloops Foodbank

The employee group at New Gold/New Afton are a generous and compassionate group indeed.

They have quietly supported the Food Banks’ efforts to create a Hunger-Free community for the past several years and have impacted our community in ways they may never realize. They have been role models in serving our community by volunteering at food drives, handing out food to our clients, setting up equipment before our events and choosing the Food Bank as one recipient of the funds gathered through Christmas raffles and of course by donating their own turkey dinners to people living at or below the poverty line.

The dedicated support of New Afton employees ensures that we can feed nearly 7000 individuals, 38 community agencies that make meals and 9 regional food banks. The operation of our foodSHARE program depends on community support as well and you should be proud as this is the largest food recovery program in Western Canada. We have diverted over 6 million pounds of food from the landfill since 2008 and distributed this food to people and farmers. New Gold

New Afton is most certainly a role model for corporate social responsibility and please know that we are grateful.

We require the support of our community in the short-term while we work on the longer-term solutions that surround the complex issue of poverty. Thank-you all so very much for helping us along the way and demonstrating clearly what community truly means.

- Bernadette Siracky, Executive Director

New Afton welcomes your feedback on our Newsletter

Call us at 250.377.2100 or email our community specialist: korah.dewalt-gagnon@newgold.com

for a chance to win a prize!

1. Was the report clear and understandable?

2. Number 1 to 5 (one being highest your level of interest in the following) : Production, Health & Safety, Environment, Our People and Community Relations.

3. Did the report provide adequate information for your top two interests?

4. Any other comments.

Further InformationIf you have any comments on this report or would like further information on the New Afton Operation, please contact either of the following:

Scott Davidson Environment and Social Responsibility Manager

New Afton Ph: +1 250 377 2785 Fax: +1 250 377 2702

New Gold Inc. Corporate Office Brookfield Place 181 Bay Street, Suite 3510 Toronto, Ontario M5J 2T3

New Afton welcomes your feedback: Call us at 250.377.2100 or email us at info@newgold.com

To learn about New Afton’s current career opportunities please visit: www.newgold.com under the careers link.

While every effort has been made to ensure accuracy of the information presented, please note that all figures are unaudited.