New Gold Inc. (“New Gold” or the “Company”) is an intermediate gold mining company engaged in the development and operation of mineral properties. The assets of the Company, directly or through its subsidiaries, are comprised of the Rainy River Mine in Canada (“Rainy River”), the New Afton Mine in Canada (“New Afton”), and the Cerro San Pedro Mine in Mexico (in reclamation) (“Cerro San Pedro” or "CSP"). The Company also holds Canadian-focused investments.

The Company is a corporation governed by the Business Corporations Act (British Columbia). The Company’s shares are listed on the Toronto Stock Exchange and the NYSE American under the symbol NGD. The Company’s registered office is located at 925 West Georgia Street, Suite 1600, Vancouver, British Columbia, V6C 3L2, Canada.

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board on a basis consistent with the accounting policies disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2022. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 which includes information necessary or useful to understanding the Company's business and financial statement presentation.

In particular, the Company's significant accounting policies are presented as Note 2 in the audited consolidated financial statements for the year ended December 31, 2022 and have been consistently applied in the preparation of these unaudited condensed consolidated interim financial statements.

Effective January 1, 2023 amendments to IAS 1, Presentation of Financial Statements helps companies provide useful accounting policy disclosures. The key amendments to IAS 1 require companies to disclose material accounting policies rather than significant policies and clarifies that accounting policies relating to immaterial transactions need not to be disclosed and not all accounting policies that relate to material transactions are material to a company's financial statements. As result of the adoption of the IAS 1 amendments, there were no adjustments to the presentation or amounts recognized in the interim financial statements.

These unaudited condensed consolidated interim financial statements were approved by the Board of Directors of the Company on April 26, 2023.

1.The Company sold its investment in Artemis Gold Inc. for net proceeds of $23.4 million (C$31.5 million).

1.The amount of inventories recognized in operating expenses for the three months ended March 31, 2023 was $113.5 million (2022 - $92.2 million).

1.In 2022, Non-depletable transfers of $132.4 million were made up of $84.8 million from the New Afton thickened and amended tailings facility and $47.6 million from the Rainy River Intrepid zone.

1.Other includes corporate balances.

1.Other includes corporate balances.

13 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD Long-term debt consists of the following: As at March 31 As at December 31 (in millions of U.S. dollars) 2023 2022 LONG-TERM DEBT Senior unsecured notes - due July 15, 2027 (a) 395.2 394.9 Credit Facility (b) — — Total long-term debt 395.2 394.9

The 2027 Unsecured Notes are redeemable by the Company in whole or in part:

•At any time prior to July 15, 2023 at a redemption price of 100% of the aggregate principal amount of the 2027 Unsecured Notes, plus a make-whole premium (consisting of the redemption price as described below, and future interest that would have been paid up to the first call date of July 15, 2023), plus accrued and unpaid interest, if any, to the redemption date.

•During the 12-month period beginning on July 15 of the years indicated at the redemption prices below, expressed as a percentage of the principal amount of the 2027 Unsecured Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date:

•The minimum interest coverage ratio, being earnings before interest, taxes, depreciation, amortization, exploration, impairment, and other non-cash adjustments (“Adjusted EBITDA”) to interest;

•The maximum net debt to Adjusted EBITDA ratio (“Leverage Ratio”); and

•The maximum gross secured debt to Adjusted EBITDA (“Secured Leverage Ratio”).

Significant financial covenants are as follows:

						Twelve months ended March 31			Twelve months ended December 31
Financial Covenant						2023			2022
FINANCIAL COVENANTS
Minimum interest coverage ratio (Adjusted EBITDA to interest)			>3.0:1.0			5.1 : 1			4.5 : 1
Maximum leverage ratio (net debt to Adjusted EBITDA)			<4.5:1.0			2.0 : 1			2.1 : 1
Maximum secured leverage ratio (secured debt to Adjusted EBITDA)			<2.0:1.0			0.2 : 1			0.2 : 1

The interest margin on drawings under the Credit Facility ranges from 1.25% to 3.75% over LIBOR, the Prime Rate or the Base Rate based on the Company’s Leverage Ratio, and the currency and type of credit selected by the Company. Based on the Company’s Leverage Ratio, the rate is 2.75% over LIBOR as at March 31, 2023 (December 31, 2022 – 2.75%). The standby fees on undrawn amounts under the Credit Facility range from 0.51% to 0.84%, depending on the Company’s Leverage Ratio. Based on the Company’s Leverage Ratio, the rate is 0.62% as at March 31, 2023 (December 31, 2022 – 0.62%).

For the three months ended March 31, 2023, $nil has been drawn under the Credit Facility. The Credit Facility has been used to issue letters of credit amounting to $27.5 million (December 31, 2022 - $27.5 million). Letters of credit relate to reclamation bonds and other financial assurances required with various government agencies.

15 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD The following is a summary of the change in non-current derivative financial liabilities: (in millions of U.S. dollars) Rainy River New Afton Total CHANGE IN NON-CURRENT DERIVATIVE FINANCIAL LIABILITIES Balance, December 31, 2021 194.0 467.4 661.4 Settlements during the period (24.0) (12.4) (36.4) Fair value adjustments related to changes in the Company’s own credit risk(1) (20.3) (48.1) (68.4) Other fair value adjustments(2) 25.0 (28.0) (3.0) Balance, December 31, 2022 174.7 378.9 553.6 Less: current portion (28.1) — (28.1) Non-current portion of derivative financial liabilities 146.6 378.9 525.5 Balance, December 31, 2022 174.7 378.9 553.6 Settlements during the period(3) (7.6) — (7.6) Fair value adjustments related to changes in the Company’s own credit risk(1) 10.8 39.6 50.4 Other fair value adjustments(2) 9.1 38.4 47.5 Balance, March 31, 2023 187.0 456.9 643.9 Less: current portion(4) (31.4) — (31.4) Non-current portion of derivative financial liabilities 155.6 456.9 612.5

1.Fair value adjustments related to changes in the Company’s own credit risk are included in other comprehensive income.

2.Other fair value adjustments are included in the consolidated income statements.

3.Settlements during the period are on an accrual basis.

4.The current portion of the derivative financial liabilities is included in trade and other payables on the statement of financial position.

In 2015, the Company entered into a $175 million streaming transaction with RGLD Gold AG, a wholly owned subsidiary of Royal Gold Inc. (“Royal Gold”). Under the terms of the agreement, the Company will deliver to Royal Gold 6.5% of gold production from Rainy River up to a total of 230,000 ounces of gold and then 3.25% of the mine’s gold production thereafter. The Company will also deliver to Royal Gold 60% of the mine’s silver production to a maximum of 3.1 million ounces and then 30% of silver production thereafter.

In addition to the upfront $175.0 million deposit, Royal Gold will pay 25% of the average spot gold or silver price at the time each ounce of gold or silver is delivered under the stream. The difference between the spot price of metal and the cash received from Royal Gold will reduce the $175.0 million deposit over the life of the mine. Upon expiry of the 40 year term of the agreement (which may be extended in certain circumstances), any balance of the $175.0 million upfront deposit remaining unpaid will be refunded to Royal Gold.

The Company has designated the gold stream obligation as a financial liability at fair value through profit or loss (“FVTPL”) under the scope of IFRS 9. Accordingly, the Company values the liability at the present value of its expected future cash flows at each reporting period with changes in fair value reflected in the consolidated income statements and consolidated statements of comprehensive income.

In 2020, New Gold entered into a strategic partnership with Ontario Teachers’ Pension Plan (“Ontario Teachers’”). Under the terms of the strategic partnership, Ontario Teachers' acquired a 46% free cash flow interest in the New Afton mine for upfront cash proceeds of $300 million. Ontario Teachers' has an option to convert the free cash flow interest into a 46% joint venture interest in New Afton in the fourth year, or have their free cash flow interest remain as a free cash flow interest at a reduced rate of 42.5%. The agreement includes a minimum cash guarantee at the end of four years and a buyback option for New Gold.

The Company has designated the free cash flow interest obligation as an FVTPL under the scope of IFRS 9. Fair value of the free cash flow interest obligation on initial recognition was determined by the amount of the cash advance received. Subsequent fair value is calculated on each reporting date with gains and losses recorded in net earnings. Fair value adjustments as a result of the Company’s own credit risk are recorded in the consolidated statement of comprehensive income, as required by IFRS 9 for financial liabilities designated as at FVTPL.

Components of the adjustment to fair value for the non-current derivative financial liabilities at each reporting date include:

These assets are included in Mining Interests on the statement of financial position and are classified as plant & equipment as per Note 8 of the Company’s condensed consolidated financial statements. As at March 31 As at December 31 (in millions of U.S. dollars) 2023 2022 RIGHT-OF-USE- ASSETS Opening balance 21.4 32.0 Depreciation (1.8) (6.8) Disposals — (3.8) Total right-of-use-assets 19.6 21.4

Please see below for a maturity analysis of the Company’s lease payments:

						As at March 31			As at December 31
(in millions of U.S. dollars)						2023			2022
MATURITY ANALYSIS FOR LEASES
Less than 1 year						6.2			7.5
Between 1 and 3 years						1.6			2.4
Between 3 and 5 years						—			0.1
Total undiscounted lease payments(1)						7.8			10.0
Carrying value of lease liabilities						7.6			9.9
Less: current portion of lease liabilities(2)						(7.4)			(8.6)
Non-current portion of lease liabilities						0.2			1.3

1.Total undiscounted lease payments excludes leases that are classified as short term and leases for low value assets, which are not recognized as lease liabilities.

2.The current portion of the lease liabilities is included in trade and other payables on the statement of financial position.

For the three months ended March 31, 2023, the Company recognized $0.1 million in interest expense on lease liabilities (2022 - $0.2 million).

For the three months ended March 31, 2023, the Company expensed $0.5 million related to leases that are classified as short term (2022 - $0.6 million).

1.Foreign exchange forward contracts are included within trade and other payables in the statement of financial position.

2.Fuel hedge swap contracts are included within trade and other payables in the statement of financial position.

3.Unsettled provisionally priced concentrate derivatives are included within trade and other receivables in the statement of financial position.

The Company had provisionally priced sales for which price finalization is outstanding at March 31, 2023. Realized and unrealized gains (losses) on the provisional pricing of concentrate sales are classified as revenue, with the unsettled provisionally priced concentrate derivatives included in trade and other receivables. The Company enters into gold and copper swap contracts to reduce exposure to gold and copper prices. Realized and unrealized gains (losses) are recorded in revenue, with the unsettled gold and copper swaps included in trade and other receivables.

The following tables summarize the realized and unrealized gains on provisionally priced sales:

						Three months ended March 31, 2023
(in millions of U.S. dollars)												Gold			Copper			Total
GAIN (LOSS) ON THE PROVISIONAL PRICING OF CONCENTRATE SALES
Realized												0.9			3.3			4.2
Unrealized												0.7			1.0			1.7
Total gain												1.6			4.3			5.9

The following tables summarize the realized and unrealized losses on gold and copper swap contracts:

						Three months ended March 31, 2023
(in millions of U.S. dollars)												Gold			Copper			Total
GAIN (LOSS) ON SWAP CONTRACTS
Realized												(0.7)			(3.2)			(3.9)
Unrealized												(1.0)			(0.2)			(1.2)
Total loss												(1.7)			(3.4)			(5.1)

19 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD The following table summarizes the net exposure to the impact of movements in market commodity prices for provisionally priced sales: As at March 31 As at December 31 2023 2022 VOLUMES SUBJECT TO FINAL PRICING NET OF OUTSTANDING SWAPS Gold ounces (000s) 0.8 0.5 Copper pounds (millions) 0.5 1.4

The Company entered into foreign exchange forward contracts in order to hedge operating costs at the New Afton and Rainy River mines. These contracts are treated as derivative financial instruments and marked-to-market at each reporting period on the consolidated statement of financial position with changes in fair value recognized in other gains and losses. Realized gains and losses are recorded within operating expenses.

In 2023, the Company entered into forward exchange forward contracts hedging C$44.0 million per month for the second quarter of 2023, and C$20.0 million per month for third quarter of 2023. As at March 31, 2023, the fair value of the unrealized foreign exchange forward contracts liabilities were $0.2 million.

(c) Diesel fuel hedge swap contracts

The Company entered into diesel fuel hedge swap contracts for the Rainy River Mine in order to reduce exposure to volatile fuel prices. These contracts are treated as derivative financial instruments and marked to market at each reporting period on the consolidated statement of financial position with changes in fair value recognized in other gains and losses. Realized gains and losses are recorded within operating expenses.

In 2023, the Company hedged an average of 0.7 million gallons per month for the first two quarters of 2023. As at March 31, 2023, the fair value of the unrealized fuel hedge swap contract liabilities were $0.4 million.

20 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD Changes to the reclamation and closure cost obligations are as follows: (in millions of U.S. dollars) Rainy River New Afton Cerro San Pedro Total CHANGES TO RECLAMATION AND CLOSURE COST OBLIGATIONS Balance – December 31, 2021 109.4 49.3 1.5 160.2 Reclamation expenditures (1.7) — (2.3) (4.0) Unwinding of discount 2.3 0.9 — 3.2 Revisions to expected cash flows (16.6) (15.6) 2.1 (30.1) Foreign exchange movement (5.8) (2.3) — (8.1) Balance – December 31, 2022 87.6 32.3 1.3 121.2 Less: current portion of closure costs (Note 6) (0.4) — (1.3) (1.7) Non-current portion of closure costs 87.2 32.3 — 119.5 Balance – December 31, 2022 87.6 32.3 1.3 121.2 Reclamation expenditures (0.1) — (0.5) (0.6) Unwinding of discount 0.7 0.3 — 1.0 Revisions to expected cash flows (1.9) (0.7) 0.1 (2.5) Foreign exchange movement 0.1 — 0.1 0.2 Balance –March 31, 2023 86.4 31.9 1.0 119.3 Less: current portion of closure costs (Note 6) (0.4) (0.7) (1.0) (2.1) Non-current portion of closure costs 86.0 31.2 — 117.1

The following table summarizes share-based payment expenses:

						Three months ended March 31
(in millions of U.S. dollars)									2023			2022
SHARE-BASED PAYMENT EXPENSES
Stock option expense									0.2			0.3
Performance share unit expense									0.3			0.3
Restricted share unit expense									0.3			1.6
Deferred share unit expense									—			0.1
Total share-based payment expenses									0.8			2.3

22 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD The following table presents changes in the Company’s stock option plan: Number of options Weighted average exercise price (000s) C$/share CHANGES TO THE COMPANY'S STOCK OPTION PLAN Balance at December 31, 2021 5,756 1.58 Granted 1,291 2.18 Exercised (755) 1.17 Forfeited (1,213) 1.98 Expired (228) 3.89 Balance at December 31, 2022 4,851 1.59 Exercised (19) 1.20 Forfeited (30) 1.60 Balance at March 31, 2023 4,802 1.60

23 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD The following table sets out the calculation of earnings (loss) per share: Three months ended March 31 (in millions of U.S. dollars, except where noted) 2023 2022 CALCULATION OF LOSS PER SHARE Net loss (31.8) (7.8) Basic weighted average number of shares outstanding (in millions) 682.7 681.3 Dilution of securities: Stock options — — Diluted weighted average number of shares outstanding (in millions) 682.7 681.3 Net loss per share: Basic (0.05) (0.01) Diluted (0.05) (0.01)

The following table lists the equity securities excluded from the calculation of diluted loss per share. All stock options are excluded from the calculation when the Company is in a net loss position.

The following table outlines the composition of income tax expense between current tax and deferred tax:

						Three months ended March 31
(in millions of U.S. dollars)									2023			2022
CURRENT INCOME AND MINING TAX EXPENSE
Canada									0.5			0.2
DEFERRED INCOME AND MINING TAX EXPENSE
Canada									(0.2)			0.3
Total income tax expense									0.3			0.5

24 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD Supplemental cash flow information (included within operating activities) is as follows: Three months ended March 31 (in millions of U.S. dollars) 2023 2022 CHANGE IN NON-CASH OPERATING WORKING CAPITAL Trade and other receivables (0.6) (5.8) Inventories (4.9) 4.5 Prepaid expenses and other (0.3) (0.3) Trade and other payables (9.3) 3.0 Total change in non-cash operating working capital (15.1) 1.4

Income (loss) from operations of reportable operating segments are reviewed by the Company's chief operating decision maker to make decisions about resources to be allocated to the segments and to assess their performance. The results from operations for these reportable operating segments are summarized in the following tables:

1.Segmented revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the three months ended March 31, 2023.

1. Segmented revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the three months ended March 31, 2022.

The following table presents the segmented assets and liabilities:

						Total assets						Total liabilities			Capital expenditures(1)
			As at March 31			As at December 31			As at March 31			As at December 31			Three months ended March 31
(in millions of U.S. dollars)			2023			2022			2023			2022			2023			2022
SEGMENTED ASSETS AND LIABILITIES
Rainy River			1,036.2			1,067.4			336.4			340.1			28.0			39.8
New Afton			1,017.1			979.9			600.0			518.4			35.0			35.7
Other(2)			175.5			196.2			414.6			425.5			0.1			0.1
Total segmented assets, liabilities and capital expenditures			2,228.8			2,243.5			1,351.0			1,284.0			63.1			75.6

1.Capital expenditures per consolidated statement of cash flows.

2.Other includes corporate balances and Cerro San Pedro.

In assessing the fair value of a particular contract, the market participant would consider the credit risk of the counterparty to the contract. Consequently, when it is appropriate to do so, the Company adjusts the valuation models to incorporate a measure of credit risk. Fair value represents management's estimates of the current market value at a given point in time.

The Company has certain financial assets and liabilities that are measured at fair value. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts), or inputs that are derived principally from, or corroborated by, observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. There were no transfers among Levels 1, 2, and 3 during the three months ended March 31, 2023 or the year ended December 31, 2022. The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer.

Investments

The fair value of the investments are measured based on the closing share price on the reporting date.

Provisionally priced contracts and gold and copper swap contracts

The fair value of the provisionally priced contracts and the gold and copper swap contracts is calculated using the mark-to-market forward prices of London Metals Exchange gold and copper based on the applicable settlement dates of the outstanding provisionally priced contracts and copper swap contracts.

Foreign exchange forward contracts

The fair value of foreign exchange forward contracts is calculated using the mark-to-market method based on the difference between the forward Canadian dollar to U.S dollar foreign exchange rate and the foreign exchange rates of the contracts.

Fuel hedge swap contracts

The fair value of the fuel hedge swap contracts is calculated using the mark-to-market forward prices of diesel, based on the applicable settlement dates of the outstanding swap contracts.

Gold stream obligation

The fair value of the gold stream obligation is calculated using the risk-free interest rate derived from the U.S. Treasury rate, forward and consensus metal prices, company specific credit spread based on the yield on the Company’s 2027 Unsecured Notes, and expected gold and silver ounces to be delivered from Rainy River’s life of mine projections.

The fair value of the free cash flow interest obligation is calculated using the risk-free interest rate derived from the U.S. Treasury rate, forward and consensus metal prices, company specific credit spread based on the yield on the Company’s 2027 Unsecured Notes, and expected production, operating and capital costs from New Afton’s life of mine projections, including considerations to the minimum cash guarantee over the first four years of the instrument.

The following table summarizes the Company’s financial assets and liabilities by category and information about financial assets and liabilities measured at fair value on a recurring basis in the statement of financial position categorized by level of significance of the inputs used in making the measurements:

						As at March 31, 2023						As at December 31, 2022
(in millions of U.S. dollars)			Category			Level						Level
FINANCIAL ASSETS
Cash and cash equivalents			Financial assets at amortized cost						197.3						200.8
Trade and other receivables(1)			Financial assets at amortized cost						13.9						15.9
Provisionally priced contracts			Financial instruments at FVTPL			2			1.7			2			2.3
Gold and copper swap contracts			Financial instruments at FVTPL			2			(1.2)			2			(4.1)
Foreign exchange forward contracts			Financial instruments at FVTPL			2			—			2			0.4
Investments			Financial instruments at FVTPL			1			11.2			1			35.6
FINANCIAL LIABILITIES
Trade and other payables(2)			Financial liabilities at amortized cost						122.7						141.1
Long-term debt			Financial liabilities at amortized cost						395.2						394.9
Foreign exchange forward contracts			Financial instruments at FVTPL			2			0.2			2			—
Fuel hedge swap contracts			Financial instruments at FVTPL			2			0.4			2			—
Gold stream obligation			Financial instruments at FVTPL			3			187.0			3			174.7
Free cash flow interest obligation			Financial instruments at FVTPL			3			456.9			3			378.9

1.Trade and other receivables exclude provisionally priced contracts, and gold and copper swap contracts.

2.Trade and other payables exclude the short-term portions of reclamation and closure cost obligations, the gold stream obligation, and current derivative liabilities.

30 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD The carrying values and fair values of the Company’s financial instruments are as follows: As at March 31, 2023 As at December 31, 2022 (in millions of U.S. dollars) Carrying value Fair value Carrying value Fair value FINANCIAL ASSETS Cash and cash equivalents 197.3 197.3 200.8 200.8 Trade and other receivables(1) 13.9 13.9 15.9 15.9 Provisionally priced contracts 1.7 1.7 2.3 2.3 Gold and copper swap contracts (1.2) (1.2) (4.1) (4.1) Foreign exchange forward contracts — — 0.4 0.4 Investments 11.2 11.2 35.6 35.6 FINANCIAL LIABILITIES Trade and other payables(2) 122.7 122.7 141.1 141.1 Long-term debt 395.2 387.5 394.9 355.0 Gold stream obligation 187.0 187.0 174.7 174.7 Free cash flow interest obligation 456.9 456.9 378.9 378.9 Foreign exchange forward contracts 0.2 0.2 — — Fuel hedge swap contracts 0.4 0.4 — —

1.Trade and other receivables exclude provisionally priced contracts, and gold and copper swap contracts.

2.Trade and other payables exclude the short-term portions of reclamation and closure cost obligations, the gold stream obligation, and current derivative liabilities.

19. Commitments

The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of New Gold Inc. and its subsidiaries (“New Gold” or the “Company”). This MD&A should be read in conjunction with New Gold’s unaudited condensed consolidated interim financial statements for the three months ended March 31, 2023 and 2022, and related notes, which are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. This MD&A contains forward-looking statements that are subject to risks and uncertainties, as discussed in the "Cautionary Note Regarding Forward-Looking Statements" section at the end of this MD&A. Readers are cautioned not to place undue reliance on forward-looking statements. All dollar figures are in U.S. dollars and tabular dollar amounts are in millions, unless otherwise noted. Figures in some tables may not add due to rounding. This MD&A has been prepared as at April 26, 2023. Additional information relating to the Company, including the Company’s Annual Information Form, is available on SEDAR at www.sedar.com.

New Gold Inc. (“New Gold” or the “Company”) is an intermediate gold mining company engaged in the development and operation of mineral properties. The assets of the Company, directly or through its subsidiaries, are comprised of the Rainy River Mine in Canada (“Rainy River”), the New Afton Mine in Canada (“New Afton”), and the Cerro San Pedro Mine in Mexico (in reclamation) (“Cerro San Pedro” or "CSP"). The Company also holds Canadian-focused investments. New Gold's vision is to build a leading diversified intermediate gold company based in Canada that is committed to the environment and social responsibility. For further information on the Company, visit www.newgold.com.

Note references throughout the document are to endnotes which can be found starting on page 40 of this MD&A.

In this MD&A, we use the following non-GAAP financial performance measures: “Total cash costs", "all-in sustaining costs" or "AISC", "adjusted net earnings/(loss)", "adjusted tax expense", "sustaining capital and sustaining leases”, “growth capital”, “average realized gold/copper price per ounce/pound”, "open pit net mining cost per operating tonne mined", "underground net mining costs per operating tonne mined", "processing costs per tonne processed", "G&A costs per tonne", "cash generated from operations before changes in non-cash operating working capital" and "free cash flow". For a detailed description of each non-GAAP financial performance measure used in this MD&A and a detailed reconciliation to the most directly comparable measures under IFRS, please refer to the “Non-GAAP Financial Performance Measures” section of this MD&A starting on page 26. The non-GAAP financial performance measures in this MD&A are intended to provide additional information to investors and do not have any standardized meaning under IFRS. These measures may therefore not be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

						Three months ended March 31
									2023			2022
OPERATING INFORMATION
Gold equivalent (“eq.”) (ounces)(1):
Produced(3)									104,857			87,696
Sold(3)									107,931			92,536
Gold (ounces):
Produced(3)									82,477			68,101
Sold(3)									87,206			70,562
Copper (millions of pounds):
Produced(3)									10.3			8.2
Sold(3)									9.5			9.2
Revenue(10)
Gold ($/ounce)									1,864			1,881
Copper ($/pound)									3.79			4.26
Average realized price(2)
Gold ($/ounce)									1,890			1,897
Copper ($/pound)									4.10			4.53
Operating expenses per gold eq. ounce sold ($/ounce) (10)									1,086			1,029
Depreciation and depletion per gold eq. ounce sold ($/ounce)(10)									514			529
Total cash costs per gold eq. ounce sold ($/ounce)(2)									1,134			1,069
All-in sustaining costs per gold eq. ounce sold ($/ounce) (2)									1,486			1,778

Total recordable injury frequency rate ("TRIFR") was 0.78 in the quarter. New Afton and Rainy River experienced no lost time injuries during the quarter, New Afton reached the milestone of exceeding 1 million hours since its last lost time injury, and Rainy River surpassed 1.6 million hours.

In advance of the spring thaw, Rainy River made upgrades and preparations to water management infrastructure including the water treatment plant, open pit diversions and diffuser system.

The Company continues to assess opportunities for Scope 1 & 2 greenhouse gas ("GHG") emissions reductions at both New Afton and Rainy River to help ensure the Company meets its goal of a 30% reduction in GHG emissions by 2030 (with a baseline year of 2020).

In the quarter, in accordance with its tailings deposition plan, New Afton successfully deposited 100% of tailings to the Afton Pit tailings facility through the use of its Thickened and Amended tailings facility. Rainy River commenced the annual tailings dam raise.

The Cerro San Pedro ("CSP") Closure Report was released in April 2023. The report highlighted the success of social closure activities at CSP as well as the Todos por Cerro San Pedro Foundation ("FTCSP"). Through the CSP closure activities, over MXN $107 million have been contributed to infrastructure projects in the Cerro de San Pedro municipality from 2017 to 2022 and over MXN $81 million has been contributed to the Fund for Sustainable Regional Development of Mining States and Municipalities since 2014. FTCSP has been able to reach over 2500 participants through various programs focused on innovation, entrepreneurship and environmental education.

On January 16, 2023, the Company sold its shares in Artemis Gold Inc. for approximately C$31.5 million.

Subsequent to the quarter, on April 26, 2023, the Company amended its revolving credit facility, extending the maturity date to December 2026 from December 2025.

Subsequent to the quarter, the Company announced the appointment of Yohann Bouchard as Executive Vice President and Chief Operating Officer, and the promotion of Ankit Shah to Executive Vice President, Strategy and Business Development. The Company also announced the appointment of Luke Buchanan as Vice President, Technical Services and Jean-François Ravenelle as Vice President, Geology.

Subsequent to the quarter, the Company announced that Rob Chausse, Chief Financial Officer, will retire at the end of 2023 and will assist with the planned transition of responsibilities through the remainder of the year. Keith Murphy has been promoted to Vice President, Finance and will assume greater finance responsibilities going forward.

New Gold is pleased to reaffirm its 2023 guidance as outlined below.

Details of the Company’s 2023 guidance is available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov, and on the Company’s website at www.newgold.com/news-events/news.

There is a range of key performance drivers that are critical to the successful implementation of New Gold’s strategy and the achievement of its goals. The key internal drivers are production volumes and costs. The key external drivers are the market prices of gold and copper as well as foreign exchange rates.

For an analysis of the impact of production volumes and costs for the three months ended March 31, 2023 relative to the prior-year period, refer to the “Review of Operating Mines” section of this MD&A.

The price of gold is the single largest factor affecting New Gold’s profitability and operating cash flows. As such, the current and future financial performance of the Company is expected to be closely related to the prevailing price of gold.

For the three months ended March 31, 2023, New Gold's gold revenue per ounce10 and average realized gold price per ounce2 were $1,864 and $1,890, respectively, compared to the London Bullion Market ("LBMA") p.m. average gold price of $1,890 per ounce.

For the three months ended March 31, 2023, New Gold’s copper revenue per pound10 and average realized copper price per pound2 were $3.79 and $4.10, respectively, compared to the average London Metals Exchange ("LME") copper price of $4.05 per pound.

While the Company’s key operations are in Canada, revenue is generated in U.S. dollars. As a result, the Company has foreign currency exposure with respect to costs not denominated in U.S. dollars. New Gold’s operating results and cash flows are influenced by changes in exchange rates against the U.S. dollar. The Company has exposure to the Canadian dollar through New Afton and Rainy River, as well as through corporate administration costs.

The spot Canadian dollar stayed consistent against the U.S. dollar during the first quarter of 2023. The average value of the Canadian dollar against the average value of the U.S. dollar for the three months ended March 31, 2023 decreased compared to the prior-year period. The weakening of the Canadian dollar impacts costs in U.S. dollar terms at the Company’s Canadian operations, as a significant portion of operating and capital costs are denominated in Canadian dollars.

For an analysis of the impact of foreign exchange fluctuations on operating costs, refer to the relevant sections for Rainy River and New Afton under the heading “Review of Operating Mines”.

The LBMA p.m. gold price increased by 9% during the first quarter of 2023, finishing the quarter at $1,980 per ounce. Safe-haven demand, driven by issues in the banking sector, in addition to the expectations of monetary policy loosening, supported the price of gold. Gold held in exchange-traded funds was largely unchanged in the first quarter. Looking forward, further inflation concerns, geopolitical uncertainty and recessionary concerns may provide support for gold prices.

Prospects for gold are impacted by several structural factors. Mine supply has been plateauing as high-quality deposits become more difficult to find and more expensive to develop and mine. Economic events can have significant effects on the price of gold, through currency rate fluctuations, the relative strength of the U.S. dollar, gold supply and demand, and macroeconomic factors, such as interest rates and inflation expectations. Management anticipates that the long-term economic environment should provide support for gold and precious metals, and believes the prospects for the business are favourable.

The LME cash copper price increased by 7% during the first quarter of 2023, finishing the quarter at $4.05 per pound. Copper prices increased on the prospects of China re-opening post COVID-19 restriction

easement. Over the longer-term, continued growth in the global economy could increase demand for copper and provide support for copper prices.

Inflationary pressures continue to impact the economy in general. Inflation is impacted by various macroeconomic factors and can affect the cost of labour and key consumables.

For the three months ended March 31, 2023, the increase in revenue relative to the prior-year period was due to higher gold and copper sales volume, partially offset by lower gold and copper prices. A detailed discussion of production is included in the “Review of Operating Mines” section of this MD&A.

For the three months ended March 31, 2023, operating expenses increased over the prior-year period primarily due to higher operating tonnes mined at both sites. For further information, please refer to the "Review of Operating Mines" section of this MD&A.

For the three months ended March 31, 2023, depreciation and depletion increased when compared to the prior-year period due to higher gold equivalent1 production.

For the three months ended March 31, 2023, revenue less costs of goods sold decreased when compared to the prior-year period due to higher operating expenses and depreciation and depletion, partially offset by higher revenue.

For the three months ended March 31, 2023, corporate administration was consistent compared to the prior-year period.

For the three months ended March 31, 2023, share-based payment expenses decreased when compared with the prior-year period due to a decrease in New Gold's share price.

For the three months ended March 31, 2023, exploration and business development expenses decreased when compared to the prior-year period primarily due to decreased exploration activity at both Rainy River and New Afton.

For the three months ended March 31, 2023, finance income increased due to an increase in interest rates when compared to the prior-year period.

For the three months ended March 31, 2023, finance costs decreased mainly due to the $100 million redemption of the 2025 Unsecured Notes in May 2022 resulting in a lower interest expense in the current year period as well as additional capitalized interest at New Afton.

Foreign exchange

Movements in foreign exchange are primarily due to the revaluation of monetary assets and liabilities as at the balance sheet date and the appreciation or depreciation of the Canadian dollar when compared to the U.S. dollar in the current period.

Unrealized loss on investments

For the three months ended March 31, 2023, the Company recorded an unrealized loss of $1.2 million primarily due to a decrease in the share price of certain investments.

Rainy River gold stream obligation

For the three months ended March 31, 2023, the Company recorded an unrealized loss on the revaluation of the gold stream obligation derivative instrument of $9.1 million. The loss was primarily driven by lower market observable discount rates and higher metal prices.

New Afton free cash flow interest obligation

For the three months ended March 31, 2023, the Company recorded an unrealized loss on revaluation of the New Afton free cash flow interest obligation of $38.4 million. The loss was primarily driven by lower market observable discount rates and higher metal prices.

Loss on foreign exchange derivative

For the three months ended March 31, 2023, the Company recorded a loss on foreign exchange derivatives of $0.5 million, associated with the Company's foreign exchange contracts.

Loss on fuel hedge swap contracts

For the three months ended March 31, 2023, the Company recorded a loss of $0.7 million, associated with the Company's fuel hedge swap contracts.

The other gains and losses listed above are added back for the purposes of calculating adjusted net earnings2. Adjusted net earnings2 is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Please refer to the "Non-GAAP Financial Performance Measures" section of this MD&A.

The current income tax expense and prior-year income tax expense relates primarily to current and deferred mineral taxes in the period. Income tax expense for the three months ended March 31, 2023 was consistent compared to the prior-year period.

On an adjusted net earnings2 basis, the adjusted tax expense2 for the three months ended March 31, 2023, was $0.1 million, compared to $0.7 million in the prior-year period. The adjusted tax expense2 excludes the tax impact of other gains and losses on the consolidated income statement. Adjusted tax expense2 is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.

For the three months ended March 31, 2023, there was a decrease in net earnings compared to the prior-year period, primarily due to an unrealized loss on the revaluation of the Rainy River gold stream obligation and the New Afton free cash flow interest obligation.

Adjusted net earnings (loss)2

Net earnings (loss) have been adjusted for other gains and losses on the consolidated income statement. Key elements in other gains and losses are the fair value changes for the gold stream obligation, fair value changes for the free cash flow interest obligation, foreign exchange gains/loss and fair value

changes in investments. The adjusted entries are also impacted by tax expenses to the extent that the underlying entries are impacted for tax in the unadjusted net earnings. Adjusted net earnings is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.

For the three months ended March 31, 2023, adjusted net earnings2 increased over the prior-year period due to higher revenues and lower exploration and business development costs, partially offset by higher operating expenses, and depreciation and depletion.

For further information on the Company’s liquidity and cash flow position, please refer to the “Liquidity and Cash Flow” section of this MD&A.

Selected financial and operating information for the current and previous quarters is as follows:

(in millions of U.S. dollars,  except where noted)			Q1 2023			Q4 2022			Q3 2022			Q2 2022			Q1 2022			Q4 2021			Q3 2021			Q2 2021			Q1 2021
OPERATING INFORMATION
Gold production from operations (ounces)(4)			82,477			80,694			70,147			52,431			68,101			81,072			72,210			66,989			66,650
Gold sales from operations (ounces)(4)			87,206			78,507			68,816			51,263			70,562			78,745			66,982			68,184			63,539
Revenue			201.6			162.8			151.2			115.7			174.7			202.6			179.8			198.2			164.9
Net (loss) income			(31.8)			(16.9)			(4.2)			(37.9)			(7.8)			150.9			(11.3)			(15.8)			16.8
Per share:
Basic ($)			(0.05)			(0.02)			(0.01)			(0.06)			(0.01)			0.22			(0.02)			(0.02)			0.02
Diluted ($)			(0.05)			(0.02)			(0.01)			(0.06)			(0.01)			0.22			(0.02)			(0.02)			0.02

Rainy River is a gold mine located in Northwestern Ontario, Canada approximately 50 kilometres northwest of Fort Frances, a town of approximately 8,000 people.

A summary of Rainy River’s operating results is provided below.

Production

First quarter gold eq.1 production was 67,596 ounces (66,201 ounces of gold and 110,976 ounces of silver), an increase over the prior-year period due to higher gold grade with the inclusion of higher grade underground tonnes, partially offset by lower tonnes processed. Production is expected to strengthen in the second half of the year and represent approximately 55% of the annual production.

Revenue

For the three months ended March 31, 2023, revenue increased when compared to the prior-year period due to higher gold sales volume, partially offset by the lower average realized gold price.

For the three months ended March 31, 2023, revenue less cost of goods sold increased when compared to the prior-year period, primarily driven by higher revenues.

Operating expenses, depreciation and depletion, total cash costs, all-in sustaining costs, capital expenditures and free cash flow                                    

Operating expense4 per gold eq. ounce increased over the prior-year period as a result of higher costs associated with production from the Intrepid underground zone and increased costs associated with mill maintenance performed in the quarter, partially offset by higher sales volume.

Open pit net mining costs per operating tonne mined2 for the three months ended March 31, 2023, decreased over the prior-year period due to an increase in tonnes mined.

Processing costs per tonne processed2 for the three months ended March 31, 2023, increased over the prior-year period due to a decrease in tonnes milled.

Depreciation and depletion was $541 per gold eq. ounce10 for the three months ended March 31, 2023, which decreased compared to the prior-year period due to higher sales volume.

Total capital decreased over the prior-year period due to lower sustaining capital, partially offset by higher growth capital. Sustaining capital2 primarily related to capitalized waste, as well as capital maintenance, and the commencement of the annual tailings dam raise. Growth capital2 primarily related to the development of the Intrepid underground zone, which advanced 388 metres during the quarter.

Cash generated from operations for the three months ended March 31, 2023, decreased when compared to the prior-year period primarily due to negative working capital movements, partially offset by an increase in revenues.

Free cash flow2 for the three months ended March 31, 2023, was $14.7 million (net of $7.7 million stream payment), which is consistent with the prior-year period.

16 WWW.NEWGOLD.COM TSX:NGD NYSE American:NGD Rainy River’s operations are impacted by fluctuations in the valuation of the U.S. dollar against the Canadian dollar. For the three months ended March 31, 2023, the value of the U.S. dollar averaged $1.36 against the Canadian dollar, when compared to $1.27 against the Canadian dollar in the prior-year period. This reduced total cash costs2 by $69 per gold eq. ounce1 relative to the prior-year period.

The New Afton mine is located in South-Central British Columbia near Kamloops, a city of approximately 90,000 people.

A summary of New Afton’s operating results is provided below.