BUILDING OUR SHARED FUTURE

2017 was a year of important achievements including the start of commercial production at Rainy River, as well as the sale of the Peak Mine in Australia as the company focuses on its core operations in Canada. Throughout this year, while we pushed forward to increase production and improve our financial performance, we sought to emphasize the importance of our relationships with our Indigenous and local communities while complying with our environmental obligations at all of our sites.

Corporate Social Responsibility remained a top priority for New Gold in 2017. At Rainy River, the commencement of commercial production would not have been possible without the support of local Indigenous and non-Indigenous communities founded in trusting relationships developed and maintained through meaningful dialogue. At Cerro San Pedro, where we are continuing our phased closure, we continue to work with our local communities, suppliers and partners to ensure that our process provides opportunities for positive outcomes and a high standard of closure that considers the social aspects as a key component – building our shared future.

Our Values and Principles

New Gold is a values-based company that believes in doing what is right. We are signatories and supporters of the United Nations Global Compact, and our policies and practices are guided by its principles with reference to human rights, labour standards, the environment and anti-corruption. Our corporate standards are based on best practices and international guidance such as ISO 14001 (Environmental), ISO 45001 (Occupational Health and Safety), ISO 26000 (Social Responsibility) and the International Cyanide Management Code.

As a member of the Mining Association of Canada (MAC), New Gold’s operations adopt the MAC’s Towards Sustainable Mining (TSM) Protocols, and we apply them at our domestic and international sites. In 2017, our Cerro San Pedro site was presented with a TSM Leadership Award – an achievement in which we take great pride.

These standards continue to guide our practices and our strategy as we identify areas of focus and set short- to long-term goals.

Employment Practices

At New Gold, we recognize that our people are our greatest asset. We adopt labour practices that comply with local laws and regulations at a minimum. We ensure that priority is given to employment of local community members as well as training and hiring of Indigenous employees. At our Rainy River and New Afton sites, our workforce is made up of over 20% Indigenous employees – well above the industry average of 6%.

Our company sees the value of being an employer that is both inclusive and diverse. We can proudly boast that we have several women within our senior management team, and through board renewal we will see a more gender inclusive board in 2018.

At our Cerro San Pedro mine, we are reducing employee levels while undergoing phased closure. As a part of that transition, we encourage our employees to undergo training made available by New Gold that will provide skills needed for other employment opportunities. We look for placement opportunities for our employees in other industrial sectors that are found locally. We also make available guidance and training to become entrepreneurs – a service that is extended not only to employees, but to all local community members as part of our Economic Development Plan.

Health and Safety

2017 saw strong performance in a variety of health and safety metrics. We were saddened, however, by a fatality at our Peak mine during the year.

Our goal of zero harm reflects our commitment to the prevention of all occupational injuries and illnesses and “doing the right thing” as a core value at New Gold. We continue to strive for zero injuries by focussing on improving leading indicators and accident prevention initiatives.

Environment

Our environmental performance reflects the emphasis we have always put on protecting the environment and human health at all our operations. We understand that environmental management is critical to all of our communities of interest and, therefore, to our business strategy. The way we manage cyanide, water, tailings, biodiversity, energy and greenhouse gas emissions is particularly significant to our local and global communities of interest, and essential for meaningful relationships to be developed and maintained.

Community Engagement and Development

At New Gold, we believe that respectful and meaningful dialogue with communities, with the objective of making a lasting and positive contribution to sustainable development, goes beyond a moral imperative and is a key driver to achieving a productive and sustainable business in the long term. All New Gold mines and projects actively engage with their respective local communities and strive to be contributors to their economic and social well-being.

During 2017, our community teams initiated the development of standards and guidelines that will ensure we have a consistent approach to our local Indigenous communities, based on best practices and our own experiences.

Looking Forward

We have exciting challenges in front of us for 2018. A key area of focus is ongoing work to optimize the operations at Rainy River. In addition, New Afton continues to assess the C-zone expansion which, if the project goes ahead, will add years to the current mine life. Our efforts to obtain the Environmental Approval Certificate for our Blackwater project are ongoing.

Just as important as these operational initiatives is our commitment to our people, health and safety, the environment and our communities of interest. We believe that leadership in these areas is the best way to secure long-term value and growth for our investors. I would like to thank our employees, contractors, local Indigenous communities and non-Indigenous communities for their support – contributions that ensure New Gold’s success.

Yours truly,

Ian Pearce Signature

Ian Pearce
Chair of the Board