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Lower than modeled gold grade at Rainy River impacts New Gold's updated 2021 operational outlook

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(Kitco News) - New Gold (TSX: NGD) (NYSE American: NGD) today provided an update to its 2021 operational outlook for the Rainy River mine and the consolidated operational outlook.

The company said that in early August, the company indicated that July production at Rainy River was primarily from the eastern area of the ODM zone ("East Lobe") and the realized gold grade from this area was below the modeled gold grade in this period, and that this trend continued in August.

According to the company’s statement, over both July and August, the modeled East Lobe high and medium grade ore negatively reconciled to ounces mined, leading to a total of approximately 20,000 lower gold ounces produced during this period.

As a result of the variance in gold grade experienced in the East Lobe, Rainy River's gold equivalent production for 2021 is now expected to be between 240,000 and 255,000 ounces, or down 13% from between 275,000 and 295,000 ounces projected in the original guidance, the company noted in its press-release.

As a result of the Rainy River revisions, New Gold’s consolidated gold equivalent production for 2021 is now expected to be between 405,000 and 450,000 ounces, compared to 440,000 – 490,000 ounces in the original guidance.

The company added it continues reverse circulation drilling in the East Lobe and the understanding of the mineralization is improving, however, additional drilling is required to refine the block model and improve its predictability.

New Gold is a Canadian-focused intermediate mining company with a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New Afton copper-gold mine. The company also holds an 8% gold stream on the Artemis Gold Blackwater project located in Canada, a 6% equity stake in Artemis Gold, and other Canadian-focused investments.

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