New Gold Inc. provided an update on promising opportunities for mine life extension at New Afton, with the potential to extend the mine life beyond 2030. The company also reports encouraging drill results and future exploration plans for the K-Zone and AI-Southeast gold-copper zones and presents a regional outlook on exploration initiatives in South-Central British Columbia, with a plan to strategically leverage New Afton's mill and tailings facilities to further extend the mine life. Highlights: Potential opportunity to extend C-Zone mine life beyond 2030 with minimal capital investment.

Encouraging drill results at K-Zone, a new exploration zone located approximately 200 metres east of East Extension, targeting copper-gold porphyry mineralization. New Afton's exploration strategy includes the development of an exploration drift to accelerate K-Zone exploration drilling. Promising drill results at AI-Southeast with intersection of 40 metres (estimated true width) of 0.56 g/t gold and 1.03% copper mineralization within potassic alteration zone.

The Company plans to test down-dip continuation utilizing the upcoming K-Zone underground exploration drift in 2024. Launch of New Gold's regional-scale mineral system and machine-learning driven prospectivity mapping of South-Central British Columbia, and greenfield exploration work programs planned for Little Fort copper-gold porphyry property and Meridian orogenic gold project. The New Afton Mine is well positioned with a current Mineral Reserves life to 2030 and is currently transitioning to a period of production growth and decreasing costs, which is expected to result in strong cash flow generation over the coming years.

With C-Zone entering the production ramp-up phase, the Company is focused on unlocking the long-term potential of the mine. Exploration spending has increased over the past few years allowing the Company to develop a pipeline of Mineral Resources and exploration targets, underpinning a strategic outlook for mine life extension. At December 31, 2022, New Afton's Measured and Indicated Mineral Resources included 66.5 million tonnes at average grades of 0.71% copper and 0.57 g/t gold.

A priority for New Gold is to convert a portion of these Mineral Resources to Mineral Reserves over the next few years. New Gold is currently evaluating three of the most promising resource zones for potential conversion to Mineral Reserves; C-Zone, East Extension, and D-Zone (Figure 1). Together these zones contain Measured and Indicated Mineral Resources of 418 million pounds of copper and 509,000 ounces of gold and Inferred Mineral Resources of 85 million pounds of copper and 118,000 ounces of gold.

The company is currently evaluating the opportunity to extend C-Zone with minimal capital investment, which would extend New Afton's mine life and C-Zone's profile of low operating costs and strong cash flow. Current C-Zone Mineral Reserves are limited to a maximum height of draw ("HOD") of 350 metres, leaving Mineral Resources between the top of C-Zone and the bottom of the B3 cave. The Company will reassess C-Zone HOD assumptions in the coming years based on cave performance.

Additionally, there is an opportunity to expand C-Zone laterally, with the inclusion of additional drawpoints on the extraction level. The Company is evaluating the potential to add additional drawpoints on the eastern side of the C-Zone footprint to mine the lower portion of East Extension. The upper part of the East Extension contains a wide high-grade core and is currently being evaluated as a potential stoping mine.

With the completion of the East Extension drilling campaign in 2023, the Company is advancing a scoping study towards a potential Mineral Resource and Mineral Reserve estimate for the zone. As the zone is entirely above the elevation of the C-Zone footprint, C-Zone materials handling, ventilation, and dewatering infrastructure could be utilized, reducing capital investment. D-Zone is the continuation of the same orebody as Lift 1, B3, and C-Zone, and is considered as a potential fifth block cave.

D-Zone has the potential to continue to improve as the deposit is extended at depth with additional drilling. The Company intends to continue drilling D-Zone with the objective of developing a critical mass of Mineral Resources to support a pre-feasibility study, which could result in a step-change in New Afton Mineral Reserves. In addition to the existing large Mineral Resource base, the Company is actively testing several targets for potential new underground mining zones outside of the main deposit.

In 2020, New Gold defined three drill targets through analysis of alteration, geochemical data, and artificial intelligence; AI-Southeast, AI-North, and AI-West. Drill testing of these targets has confirmed copper-gold mineralization with favorable alteration and metal zonation, including a high-grade copper intersection at AI-Southeast, reported below. Follow-up drilling has been limited due to a lack of suitable underground drill locations as B3 and C-Zone cave construction was prioritized.