During 2015, New Gold continued its steady, disciplined approach to managing the company’s financial resources. We took steps during the year to increase our financial flexibility and further strengthen our balance sheet. Coupled with the free cash flow generation from our operations that we expect in 2016, these factors provide us with the opportunity to invest in the future of our business.

During a year of low metal prices, our team performed well, better positioning us to benefit from rising gold prices and realize our goals.

2015 highlights included:

  • Our operations delivered record gold production.
  • 2015 revenues of $713 million remained in line with the prior year as increased gold and silver sales volumes largely offset the combination of lower copper sales volumes and lower realized metal prices.
  • Full-year cash generated from operations was $263 million, remaining in line with the prior year despite lower metal prices.
  • Our balance sheet grew stronger.
  • At year end, our total liquidity position was $595 million.

Overall, we buttressed our financial resources in support of the continued development of our Rainy River project. The size of the prize justifies our focus: we expect this mine to be a game-changer for the company, with the potential to nearly double New Gold’s cash flow.

A vital part of preparing for the future is sound financial stewardship. This means continually monitoring the landscape to ensure we are well positioned to handle lower metal prices as well as benefit from higher ones.

In order to provide additional financial flexibility and strengthen the balance sheet, we completed two transactions, which are discussed in the letter to shareholders. First, our streaming agreement with Royal Gold, and second, the sale of our 30 percent interest in El Morro.

The combination of our year end cash, the remaining stream deposit and the amount available on our credit facility provides New Gold with total liquidity of $595 million. When you combine these transactions with our strong cash generating potential at current metal prices, we are well positioned to fund the development of Rainy River.

This is good news for investors who share our vision that investing in larger, longer-lived, lower-cost assets should position us for a bright future.

As we plan for exciting growth, we appreciate the continued support of our investors. From your perspective, the future is fast approaching as Rainy River moves closer to start-up. We have the financial resources in place, strong expected cash flows, an experienced development team and a management team with a track record of creating value for shareholders.

Yours truly,

Brian Penny Signature

Brian Penny