- All dollar figures are in US dollars unless otherwise indicated)
TORONTO, Oct. 28, 2015 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today announces its 2015 third quarter operational and financial results.

2015 THIRD QUARTER HIGHLIGHTS
Gold production increased by 31% to 122,580 ounces relative to 93,367 ounces in the prior-year quarter
Copper production of 24.6 million pounds consistent with 25.6 million pounds in the prior-year quarter
Silver production increased to 0.6 million ounces from 0.2 million ounces in the prior-year quarter
All-in sustaining costs(1) of $788 per ounce, including total cash costs(2) of $495 per ounce
Net cash generated from operations before changes in working capital(3) of $58 million, or $0.11 per share
September 30, 2015 cash balance of $385 million
Construction at Rainy River advancing on schedule – site earthworks over 50% complete and key initial mining equipment successfully commissioned
Strengthened balance sheet through two previously announced transactions
$175 million Rainy River streaming transaction with Royal Gold – initial payment of $100 million received in July 2015 with remaining $75 million expected by mid-2016
El Morro transaction expected to close in the fourth quarter – New Gold to receive approximately $60 million in cash after-tax, a 4% gold stream on future gold production from El Morro and have the company's $94 million carried funding loan payable to Goldcorp cancelled


"New Gold moved from strength to strength during the third quarter," stated Randall Oliphant, Executive Chairman. "Our gold production increased significantly, our costs decreased and we further strengthened our balance sheet. When including the cash proceeds from the El Morro transaction and the remaining stream deposit from Royal Gold, our company has total pro forma liquidity of over $750 million which exceeds the remaining development capital estimate at Rainy River. In addition, with quarterly all-in sustaining costs below $800 per ounce we continued to generate a robust margin. We now look forward to finishing the year with another strong operational quarter and further advancing the construction of Rainy River."

CONSOLIDATED YEAR-TO-DATE OPERATIONAL RESULTS AND 2015 GUIDANCE

Consistent with the company's February 2015 guidance for the year, production was planned to be weighted to the second half of 2015 and New Gold's four operations began to deliver this higher production in the third quarter. As the company has produced over 300,000 ounces of gold through the first nine months of the year and expects a strong fourth quarter, full-year gold production continues to have the potential to be toward the high end of the original guidance range of 390,000 to 430,000 ounces. Consolidated copper production is expected to be at the low end of the guidance range of 100 to 112 million pounds and consolidated silver production is expected to be in line with guidance at 1.75 to 1.95 million ounces.

New Gold's 2015 all-in sustaining costs(1) guidance of $745 to $785 per ounce, including total cash costs(2) of $340 to $380 per ounce was set in February of 2015. The company's cost guidance was based on assumptions of $2.75 per pound of copper and $16.00 per ounce of silver and foreign exchange rates for the Canadian dollar, Australian dollar and Mexican peso of $1.25, $1.25 and $15.00 to the U.S. dollar, respectively.

For the nine-month period ended September 30, 2015, New Gold's all-in sustaining costs(1) were $895 per ounce, including total cash costs(2) of $464 per ounce. All-in sustaining costs(1) and total cash costs(2) per ounce are tracking above guidance due to the combined impact of by-product commodity prices being lower than those assumed at the beginning of 2015, copper production being at the low end of guidance and a higher percentage of the company's gold production coming from Mesquite, which is expected to have an above average cost year in 2015.

The company's fourth quarter all-in sustaining costs(1) and total cash costs(2) are expected to be lower than the year-to-date costs driven by the combined benefit of higher gold and copper sales volumes. As a result, the 2015 full-year all-in sustaining costs(1) and total cash costs(2) per ounce are expected to decrease relative to those achieved through the first nine months of the year.

At the end of the second quarter, the company indicated that based on spot commodity prices and foreign exchange rates at that time, full-year costs were expected to be higher than the guidance provided at the beginning of 2015. Since that time, copper prices have decreased further, while foreign exchange rates have remained in line. As a result, New Gold expects full-year all-in sustaining costs(1) of $840 to $860 per ounce, including total cash costs(2) of $430 to $450 per ounce.

2015 THIRD QUARTER OPERATIONAL RESULTS

New Gold's third quarter gold production of 122,580 ounces increased by 31% relative to the prior-year quarter. The significant increase in quarterly gold production was a result of higher production at each of New Afton, Mesquite and Cerro San Pedro more than offsetting a decrease at the Peak Mines. Consolidated copper production of 24.6 million pounds was in line with the third quarter of 2014 and silver production increased to 0.6 million ounces.

New Gold's third quarter all-in sustaining costs(1) of $788 per ounce decreased by $60 per ounce relative to the prior-year quarter. The decrease in all-in sustaining costs(1) was attributable to the higher gold production base as well as a $13 million, or $244 per ounce, decrease in cumulative sustaining capital, exploration, general and administrative, and amortization of reclamation expenditures. The decrease in all-in sustaining costs(1) was achieved despite a $19 million, or $368 per ounce, decrease in copper and silver by-product revenue resulting from lower realized prices(4). The company's third quarter total cash costs(2) of $495 per ounce, which are a component of all-in sustaining costs(1), increased relative to the prior-year quarter as the impact of lower by-product revenue was only partially offset by the higher gold production and the depreciation of the Canadian and Australian dollars relative to the U.S. dollar.

New Afton
Gold production at New Afton during the third quarter of 26,986 ounces increased relative to the prior-year quarter. The increase in quarterly production was driven by a 5% increase in throughput to an average of over 15,300 tonnes per operating day, with gold grade and recovery remaining consistent. New Afton's quarterly operating performance continued to benefit from the completion of the mill expansion in mid-2015. As a result of the incremental grinding capacity added to the mill circuit, gold recovery remained at 83% despite the increase in throughput.

New Afton's quarterly copper production of 21.4 million pounds was in line with the third quarter of 2014. The combination of the 5% increase in throughput and a 1% increase in copper recovery, resulting from the successful mill expansion project, offset a decrease in copper grade.

The increase in New Afton's total cash costs(2) to ($533) per ounce was primarily attributable to an $18 million, or $687 per ounce, decrease in copper by-product revenue relative to the prior-year quarter driven by a decrease in the realized price(4). The impact to costs of the increase in ore tonnes mined and processed during the quarter was offset by a 20% depreciation of the Canadian dollar relative to the U.S. dollar. New Afton's sustaining capital expenditures of $12 million remained in line with the third quarter of 2014 resulting in all-in sustaining costs(1) of ($20) per ounce in the quarter.

New Afton's third quarter co-product cash costs(2) were $471 per ounce of gold and $0.94 per pound of copper relative to $383 per ounce and $1.04 per pound in the prior-year quarter as a greater percentage of revenue was derived from gold relative to the third quarter of 2014. The mine's third quarter co-product all-in sustaining costs(1) of $671 per ounce of gold and $1.33 per pound of copper compared to $560 per ounce and $1.44 per pound in the third quarter of 2014.

NEW GOLD SUMMARY OPERATIONAL RESULTS
Three months ended September 30
Nine months ended September 30
2015 2014 2015 2014

GOLD PRODUCTION (thousand ounces)
New Afton 27.0 25.6 75.3 79.3
Mesquite 43.3 26.3 91.5 70.4
Peak Mines 20.7 28.3 55.1 77.1
Cerro San Pedro 31.6 13.2 82.2 47.3
Total Gold Production 122.6 93.4 304.0 274.1
Total Gold Sales (thousand ounces) 115.7 88.2 295.8 267.0
Average Realized Gold Price per ounce(4) $1,117 $1,236 $1,174 $1,283

COPPER PRODUCTION (million pounds)
New Afton21.4 21.1 60.9 64.1
Peak Mines 3.2 4.6 10.3 12.9
Total Copper Production 24.6 25.6 71.1 77.0

Total Copper Sales (million pounds) 21.6 22.7 67.4 72.2
Average Realized Copper Price per pound(4) $2.23 $3.11 $2.52 $3.06

SILVER PRODUCTION (thousand ounces)
New Afton 70.9 59.8 192.3 183.2
Peak Mines 26.3 32.6 78.6 99.4
Cerro San Pedro 472.2 138.3 1,107.8 783.0
Total Silver Production 569.4 230.7 1,378.6 1,065.6

Total Silver Sales (thousand ounces) 544.4 233.6 1,321.3 1,064.4

Average Realized Silver Price per ounce(4) $14.72 $19.66 $15.72 $19.90

TOTAL CASH COSTS(2)($ per ounce)
New Afton ($533) ($1,245) ($769) ($1,264)
Mesquite 718 951 800 937
Peak Mines894 568 941 641
Cerro San Pedro 731 1,604 852 1,185
Total Cash Costs(2) $495 $311 $464 $272

All-IN SUSTAINING COSTS(1)($ per ounce)
New Afton($20) ($700) ($203) ($680)
Mesquite 892 1,625 1,300 1,354
Peak Mines 1,250 873 1,302 955
Cerro San Pedro 749 1,701 866 1,317
All-in Sustaining Costs(1) $788 $848 $895 $754

For the nine-month period ended September 30, 2015, gold production at New Afton of 75,256 ounces was slightly below production of 79,288 ounces in the prior-year period as the combination of lower gold grade and recovery was only partially offset by higher throughput. As the mill expansion was completed on schedule in mid-2015, gold recovery in the early part of 2015 was lower than the prior year as throughput was increased. Since the completion of the mill expansion, gold recovery has increased by 3% relative to the first quarter of 2015.

New Afton's copper production of 60.9 million pounds in the first nine months of 2015 was below prior-year period production of 64.1 million pounds for reasons consistent with those noted above for gold production. Copper recovery in the third quarter was 4% higher than the first quarter of 2015, demonstrating the benefits of the mill expansion project.

New Afton's total cash costs(2) for the nine-month period ended September 30, 2015 of ($769) per ounce were $495 per ounce higher than the prior-year period. The increase in costs was primarily attributable to a $41 million, or $392 per ounce, decrease in copper by-product revenue relative to the prior-year period driven by a combination of the decrease in the realized price(4) and lower copper sales volumes. New Afton's sustaining capital expenditures in the first nine months of 2015 were approximately 10% below the prior-year period, resulting in all-in sustaining costs(1) of ($203) per ounce.

New Afton's co-product cash costs(2) were $476 per ounce of gold and $1.01 per pound of copper in the first nine months of 2015 relative to $413 per ounce and $0.99 per pound in the prior-year period and the mine's co-product all-in sustaining costs(1) were $682 per ounce of gold and $1.44 per pound of copper compared to $612 per ounce and $1.47 per pound in the prior-year period.

New Afton remains on track to finish the year in line with its gold production guidance range of 105,000 to 115,000 ounces. Full-year copper production is expected to be at the low end of the guidance range of 85 to 95 million pounds. Though New Afton's gross operating costs have been approximately 10% lower than the company's plans due to the depreciation of the Canadian dollar relative to the U.S. dollar, the mine's total cash costs(2) and all-in sustaining costs(1) have been impacted by lower than expected copper by-product revenue. The year-to-date average realized copper price(4) of $2.52 per pound has been below the company's guidance assumption of $2.75 per pound which, when combined with copper production being at the low end of guidance, will negatively impact the mine's 2015 total cash costs(2) and all-in sustaining costs(1) per ounce relative to guidance. Based on the net impact of the decrease in the copper price, the expected 2015 full-year copper production and the Canadian dollar foreign exchange rate benefit, New Afton's all-in sustaining costs(1) and total cash costs(2) should both be approximately $350 per ounce above the mine's guidance ranges of ($560) to ($520) per ounce and ($1,070) to ($1,030) per ounce, respectively.

Mesquite
Mesquite's third quarter gold production of 43,291 ounces increased by 65% relative to the prior-year quarter. The third quarter delivered Mesquite's highest quarterly production since the first quarter of 2012. The increase in production relative to the third quarter of 2014 was driven by the combination of a significant increase in the number of ore tonnes mined and placed on the leach pad and faster process recoveries resulting from the company's investment in the leach pad expansion. The benefit of the increase in ore tonnes was partially offset as a portion of the tonnes contained lower gold grade. Consistent with the company's expectations, Mesquite had a strong third quarter and with the significant number of ore tonnes placed on the pad, the mine is well positioned for a solid finish to the year.

Mesquite's third quarter total cash costs(2) of $718 per ounce were $233 per ounce below the prior-year quarter with the decrease attributable to higher quarterly production and lower diesel prices. Third quarter sustaining capital expenditures of $6 million were $11 million lower than the prior-year quarter thus positively impacting Mesquite's all-in sustaining costs(1). Mesquite's third quarter all-in sustaining costs(1) of $892 per ounce were $733 per ounce below the prior-year quarter.

For the nine-month period ended September 30, 2015, gold production of 91,479 ounces increased by 30% relative to the same period of the prior year. The increase in production was attributable to a 78% increase in ore tonnes mined and placed on the leach pad which was partially offset by lower gold grade.

Mesquite's total cash costs(2) of $800 per ounce for the nine-month period ended September 30, 2015 were $137 per ounce below the same period of the prior year while the mine's all-in sustaining costs(1) of $1,300 per ounce were $54 per ounce lower. The increase in sustaining capital expenditures at Mesquite in the first nine months of 2015, resulting from the company's planned focus on waste stripping as well as the leach pad expansion, was offset by higher gold production.

As Mesquite has produced over 90,000 ounces in the first nine months of 2015, the mine's full-year gold production is expected to exceed the high end of its guidance range of 110,000 to 120,000 ounces by approximately 10,000 ounces. Consistent with the company's plans, Mesquite's third quarter costs were well below those of the first half of the year thus positioning the mine to deliver full-year costs below guidance. Mesquite's 2015 full-year total cash costs(2) are expected to come in significantly below the guidance range of $925 to $965 per ounce due to the combined benefit of higher production and approximately $20 million of waste stripping costs being capitalized. At the same time, Mesquite's all-in sustaining costs(1) are expected to be $75 to $100 per ounce below the guidance range of $1,290 to $1,330 per ounce.

Peak Mines
Third quarter gold production at the Peak Mines of 20,734 ounces increased relative to the second quarter as planned, however was below that of the prior-year quarter. Gold production decreased when compared to the third quarter of 2014 due to the combined impact of an 11% decrease in tonnes processed and lower gold grade. As previously disclosed, the main stoping area of the Perseverance ore body experienced geotechnical challenges in March of 2015. Since that time, there has been reduced accessibility and a decrease in tonnes mined and processed from this area as there was an increased focus on rehabilitation and remediation.

Quarterly copper production of 3.2 million pounds was lower than the 4.6 million pounds produced in the prior-year quarter. Copper production decreased due to the combination of lower ore tonnes processed, grade and recovery.

Total cash costs(2) at the Peak Mines of $894 per ounce increased relative to the prior-year quarter due to the combined impact of a 19% decrease in gold sales volumes, a $4 million, or $99 per ounce, decrease in copper by-product revenue and increased costs associated with the rehabilitation of Perseverance. This increase was partially offset by the 28% depreciation of the Australian dollar relative to the U.S. dollar. Sustaining capital expenditures at the Peak Mines remained consistent with the third quarter of 2014, however, all-in sustaining costs(1) per ounce were similarly impacted by the lower gold sales volumes.

For the nine-month period ended September 30, 2015, gold production at the Peak Mines of 55,054 ounces was well below production of 77,141 ounces in the same period of the prior year. The decrease in gold production was attributable to a 12% decrease in throughput and lower gold grade, with both primarily related to the geotechnical challenges at Perseverance.

Copper production in the first nine months of 2015 of 10.3 million pounds was below the 12.9 million pounds produced in the prior-year period primarily due to lower throughput and copper recovery.

Total cash costs(2) of $941 per ounce and all-in sustaining costs(1) of $1,302 per ounce at the Peak Mines in the nine-month period ended September 30, 2015 increased relative to the prior-year period primarily due to the lower gold sales volumes as the impact of lower copper by-product revenue was offset by the combined benefit of the depreciation of the Australian dollar relative to the U.S. dollar and lower sustaining capital expend

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