From its current solid foundation, New Gold’s story is about the future. We have continued investing to become a company with a longer-lived, larger-scale and lower-cost portfolio of assets. We are building projects of greater quality, duration and exploration potential.

We are a 400,000 ounce-per-year gold producer at present, with over 800,000 ounces of low-cost production potential at our Rainy River and Blackwater projects for the future.

During 2014, New Gold made significant advances on several fronts to position your company for a prosperous future. These included driving down costs, moving forward on our development projects and strengthening our management team.

In the face of lower metal prices, New Gold responded by achieving the lowest costs in our history, further solidifying our position as one of the gold industry’s lowest-cost producers. With margins of $477 per ounce after all-in-sustaining costs, our operations continued to generate robust free cash flow that positions us to reinvest in the future of our business. Combined with an industry-leading growth pipeline, this cash flow generation helps fund the opportunities for profitable growth we see before us.

Our operating mines are, collectively, our engine for growth. Together, they achieved 2014 production guidance of 380,000 ounces of gold, at record-low cash costs of $312 per ounce. In 2015, we expect increased production at continued low costs.

From its current solid foundation, New Gold’s story is about the future. We have continued investing to become a company with a longer-lived, larger-scale and lower-cost portfolio of assets. We are building projects of greater quality, duration and exploration potential.

We are a 400,000 ounce-per-year gold producer at present, with over 800,000 ounces of low-cost production potential at our Rainy River and Blackwater projects for the future.

Rainy River should boost our Company’s total annual gold production by over 75 percent after it starts up in mid-2017, with 325,000 low-cost ounces of gold annually for the first nine years – about three times the average production range of our existing mines. In response to the current commodity price environment, we had the discipline to extend the construction period by six months to 2.5 years, giving us time to generate additional free cash flow at current gold prices, thus underpinning our plans for organic growth.

We can then assess the timing of development of our Blackwater project. We plan to advance the project through the permitting phase and have the project ready to go at the time of our choosing. We estimate Blackwater will produce 485,000 ounces of gold per year for the first nine years at low all-in sustaining costs, adding another large-scale, long-lived, low-cost producer to our portfolio.

Importantly, even if metal prices weaken, we have the option to adjust our project development schedules accordingly.

We are also unlocking options at our current operations. At New Afton, we are on track for a mid-year mill expansion designed to increase throughput, recovery rates and, in turn, cash flow by over $20 million per year. Plus, the results of the mine’s C-zone scoping study are exciting, providing the potential to significantly add to the mine’s life.

Our exploration programs present even more upside potential. We are exploring two of the best new gold districts in Canada at our 1,100 square kilometre Blackwater land package and our 190 square kilometre Rainy River land package.

Planning for profitable growth is not possible without the contributions of the team of employees at all of our operations. We thank them for their hard work and dedication. Our success also takes a strong, engaged Board of Directors. New Gold is fortunate to have an exceptionally talented Board, whose depth and breadth of experience and knowledge of the business we think is unmatched in the industry. And we strengthened the management team with the appointment of industry veteran David Schummer as Chief Operating Officer.

We firmly believe that our ability to deliver on our value creation goals will only get better from here. Already, our low production costs help to provide downside protection in uncertain times and we are uniquely positioned to benefit from rising gold prices through both our current production base and by adding incremental production from our growth projects.

New Gold is positioned with assets in politically stable regions, a dedicated executive team who are shareholders themselves, remarkably low costs, strong cash flows and a leading growth pipeline in the industry. We have a track record of value creation through ups and downs in the market and intend to build on it in the future.

We thank our shareholders for their continued support.

Yours truly,

Randall Oliphant Signature

Randall Oliphant

Robert Gallagher Signature

Robert Gallagher