TORONTO, Sept. 14, 2015 /CNW/ - New Gold Inc. ("New Gold") (TSX:NGD) (NYSE MKT:NGD) today provides an update on development progress at the company's Rainy River project, where New Gold is hosting an analyst and investor tour tomorrow, and announces the planned retirement of Robert Gallagher, the company's President and Chief Executive Officer, in June of 2016.

Rainy River Development Update
New Gold is pleased to provide an update on the development activities at its Rainy River project in northwestern Ontario, where the company is hosting an analyst and investor tour on September 15, 2015.

RAINY RIVER DEVELOPMENT HIGHLIGHTS – THROUGH THE END OF AUGUST 2015

Detailed engineering completed
Temporary accommodation facility completed
Relocation of Highway 600 – over 40% complete
Plant Site earthworks – over 40% complete
Concrete placement – over 10% complete
Targeting erection of structural steel in early October
Assembly of initial mine fleet commenced – commissioned one 218-tonne truck, one dozer, two blasthole drills and commissioning of one hydraulic shovel 50% complete
No Lost Time Incidents since the company acquired the project in 2013
Key members of operational team hired and on site including: General Manager, Mine Manager, Mill Manager, Maintenance Manager, Materials Manager, Environment Manager and Health and Safety Manager
98 employees hired and on site to support development and operational readiness
Recruitment for operations phase ongoing – over 1,700 applications received including significant First Nations and other local interest in employment
Total project spending through August 31, 2015 – $144 million
Total capital committed (inclusive of $144 million of spending) through August 31, 2015 – $480 million; represents 55% of total development capital estimate


The development of Rainy River remains on budget with a total capital estimate of $877 million, and on time with first production targeted for mid-2017. The 21,000 tonne per day, combined open pit-underground operation is expected to produce an average of 325,000 ounces of gold per year over its first nine years of full production at all-in sustaining costs(1) of approximately $670 per ounce, including total cash costs(2) of $570 per ounce.

Over the course of the last two months, New Gold has completed two transactions that further strengthen the company's balance sheet and increase its liquidity position without requiring the issuance of equity. In July, the company announced a $175 million streaming transaction with Royal Gold on future gold and silver production from Rainy River (of which $100 million was paid on closing) and, in August, New Gold agreed to sell its 30% interest in El Morro to Goldcorp in exchange for $90 million of cash, the cancellation of the company's $93 million carried funding loan and a 4% stream on future gold production from El Morro. Subject to meeting the conditions required for payment of the second installment of the stream, conditions of closing of the El Morro sale and net of applicable taxes, New Gold will have improved its financial position by a total of approximately $333 million.

The combination of New Gold's June 30, 2015 cash balance of $327 million, the $175 million Rainy River stream proceeds, the $65 million (net of tax) El Morro proceeds and the $236 million available under the company's credit facility provides the company with total pro forma liquidity of approximately $800 million. The total liquidity exceeds the remaining development capital estimate to complete Rainy River. In addition, New Gold's 2015 targeted all-in sustaining costs(1) remain $300 to $350 per ounce below the current gold price which should enable the company to generate additional free cash flow to support the Rainy River development.

In parallel with the ongoing construction activities, New Gold's exploration team continues to explore for additional resources across the company's Rainy River claim holdings. The team's focus is currently being directed toward prospective target areas located within a few kilometres of the central mine development area. To date, four areas with good potential to host significant gold mineralization in the subsurface have been identified. A 2,500 metre reconnaissance drilling campaign to test these targets is scheduled to commence during the coming months. Multiple prospective gold showings have also been identified on the broader Rainy River claim holdings that further support the significant potential for future discoveries in one of Canada's newly emerging gold districts. The company will update its mineral resource and reserve estimates at the end of 2015 to incorporate the additional mineral resources on the Burns Block, which was added to the company's holdings as part of New Gold's acquisition of Bayfield Ventures Corp. in late 2014.

Overall, the Rainy River project enhances New Gold's growth pipeline through its manageable capital costs, significant production scale at below current industry average costs and exciting regional exploration potential in a great mining jurisdiction. The company looks forward to advancing the Rainy River project and providing further updates on its development progress through the remainder of 2015 and beyond.

Presentation slides that will be used during the Rainy River tour will be made available tomorrow morning on New Gold's website at www.newgold.com.

Robert Gallagher Planned Retirement
Mr. Gallagher plans to retire from the company in June of 2016. Over the last number of years, Mr. Gallagher's focus has primarily been on overseeing the successful development and start-up of the company's New Afton mine as well as further strengthening New Gold's partnerships with First Nations in support of the development of the Rainy River project and permitting of the Blackwater project. As part of Mr. Gallagher's planned retirement, New Gold has an established leadership transition plan that will see Randall Oliphant, the company's Executive Chairman, continuing to lead New Gold and Mr. Gallagher's portfolio of responsibilities transitioned to members of the company's executive leadership team over the next nine months.

From an operational and project development continuity perspective, Mr. Gallagher has already been working closely with David Schummer, New Gold's Chief Operating Officer, since Mr. Schummer joined the company in 2014. In addition to the significant experience already provided by Mr. Schummer and his current team, the company is in the final stages of hiring a Vice President, Operations to further strengthen the operations group.

Mr. Gallagher's scheduled retirement will culminate a remarkable 40-year career in the industry. He has served as
New Gold's President and Chief Executive Officer since the company's transformational three-way merger in 2008. Under Mr. Gallagher's stewardship, New Gold has created a culture of values-based leadership which has served as a foundation for the company's track record of meeting operational targets and delivering on development projects. Among his many significant contributions, Mr. Gallagher played a key role in the advancement of New Gold's three Canadian assets. He was instrumental in leading the successful development of the company's New Afton Mine in British Columbia, which achieved commercial production six weeks ahead of schedule in mid-2012 and has outperformed expectations since production commenced. In 2014, Mr. Gallagher received the E.A. Scholz Award for Excellence in Mine Development from the Association for Mineral Exploration British Columbia for his involvement in the development of New Afton. Mr. Gallagher has built upon the strong First Nations partnerships previously established at New Afton to form lasting relationships, founded on mutual respect and trust, with First Nations communities in the areas surrounding both Rainy River in Ontario and Blackwater in British Columbia. Mr. Gallagher will continue to remain involved with the company in an advisory role subsequent to his retirement.

"Bob's leadership and breadth of operational expertise have been key components of New Gold's growth into a leading intermediate gold producer," stated Randall Oliphant, Executive Chairman. "It has been a privilege to work alongside Bob and to see him further establish himself as one of the most respected operational leaders in the gold business. Bob will forever be part of the New Gold family and, on behalf of our board of directors and all of our employees, I thank him for his dedication to our company."

"It has been tremendously rewarding for me to help lead New Gold to become the great company that it is today," stated Robert Gallagher, President and Chief Executive Officer. "The company has a robust portfolio of mines and projects in great jurisdictions, but I am proud to say that New Gold's greatest asset is its people. After spending over 40 years in the industry, it is very rewarding to be in a position to turn over responsibility for New Gold's operations and development projects to very capable and experienced hands. I look forward to working with the executive leadership team over the coming months to ensure a seamless transition."

Mr. Gallagher will remain in his role as President and Chief Executive Officer of New Gold until his planned retirement in June 2016.

ABOUT NEW GOLD INC.
New Gold is an intermediate gold mining company. The company has a portfolio of four producing assets and three significant development projects. The New Afton Mine in Canada, the Mesquite Mine in the United States, the Peak Mines in Australia and the Cerro San Pedro Mine in Mexico, provide the company with its current production base. In addition, New Gold owns 100% of the Rainy River and Blackwater projects, both in Canada, as well as an interest in the
El Morro project located in Chile. New Gold's objective is to be the leading intermediate gold producer, focused on the environment and social responsibility. For further information on the company, please visit www.newgold.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this news release, including any information relating to New Gold's future financial or operating performance are "forward looking". All statements in this news release, other than statements of historical fact, which address events, results, outcomes or developments that New Gold expects to occur are "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as "plans", "expects", etc. etc.