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Re: News Release - Tuesday, May 13, 2008
First Quarter 2008 Financial Results
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May 13, 2008, Toronto, Ontario -- New Gold Inc. (the "Company" or "New
Gold") (NGD: TSX/AMEX) is pleased to provide the 2008 first quarter
financial results and an update on its New Afton Copper Gold Project
(the "Project") situated 10 kilometres west of Kamloops, British
Columbia.

2008 First Quarter End Results

The Company incurred a loss of $9.2 million or $0.25 per share in the
first quarter as compared to a loss of $0.5 million or $0.02 per share
in the first quarter of 2007. The increase in the loss is primarily
related to the expensing of $9.4 million related to interest and
accretion charges which do not qualify for capitalization.

During the first quarter of 2008, the Company invested approximately
$20.1 million on its mineral properties as compared to $5.9 million in
the comparative quarter in 2007. During the current quarter,
expenditures on the New Afton project included $18.0 million on
underground development and infrastructure and $1.3 million on surface
exploration in and around the New Afton project and $0.8 million on the
Company's Ajax claims. In the comparative quarter of 2007, the Company
spent $3.7 million on development activities, principally related to
the construction of a new pit road, $1.8 million on the feasibility
study and $0.3 million on surface exploration programs in and around
the current resource.

In addition, during the first quarter of 2008, the Company spent $11.0
million on property, plant and equipment in the first quarter as
compared to $1.3 million in the comparative quarter in 2007. The
significant increase relates to the acquisition of the initial mine
development fleet plus sundry capital assets required for the
development of the New Afton Mine. In 2007, the acquisitions related to
the acquisition of the underground equipment acquired from the former
underground mining contractor.

Cash Resources

As at March 31, 2008, the Company had cash and cash equivalents
totaling $158 million and negative working capital of $76.6 million
versus negative working capital of $29.6 million as at
December 31, 2007. The primary reason for the negative working capital
relates to the continued accounting for the Notes as current debt
pending finalization of the permit waiver request and business
combination completion and categorizing the currently illiquid ABCP
investments as long-term assets. Once the Company meets or secures a
waiver on its permit test on the debt, the Company expects to return to
a positive working capital position. The increase in the negative
working capital has occurred primarily as a result of funding the
Project development which totaled $31.1 million in the quarter.

During the quarter it was determined that the previous approach to
exploration, which had been focused in and around the New Afton
resource both at surface and at depth, would be curtailed on the basis
that the mineralisation identified in this program would not be mined
in the first five years of the mine life. The Company will now focus on
a full evaluation of the previous drilling program results and
re-direct the future program to an evaluation of the regional potential
of the Company's mineral claim holdings including a geophysical survey.
As a result, the extent of drilling expected in the near term will be
significantly reduced.

Project Update

During the first quarter of 2008 the Company continued the underground
development of the Project. The underground development is now
proceeding on five development faces including commencement of the
surface portal which began in early 2008. The Company completed 824
metres of underground development during the first quarter of 2008 and
is currently averaging 90 to 100 metres per week.

Surface activities included the development of new surface roads and
preparation of the construction office site in advance of the mill
construction. This is planned to commence late in the third quarter
following site preparation and foundation completion for the mill in
the second quarter of 2008. The Company also commissioned after the
quarter end the pit de-watering system and is now dewatering the New
Afton pit into the previously mined Pothook pit where water will be
stored and later used when milling commences.

The Company also continued its permitting processes for the remaining
permits. In April 2008 the remaining key permit applications, focused
on water use and tailings impoundment, were submitted to the
authorities.

The procurement procedures for the mill site continued with the
tendering of the mill structure, the vertimill and the floatation
cells. Detailed engineering attained the 30% level. In addition, as
previously reported, after a comprehensive review overseen by AMEC
Americas Limited and including input from Cementation, Ledcor and AMC
Consultants (Pty) Ltd., the Company's mining consultant, the
construction costs for the Project are now projected to total $592
million (which includes a contingency of $48.6 million), 19.6% over the
projected costs stated in the Feasibility Study. The primary reasons
for the increase are attributed to higher labour and material costs.

The current schedule indicates that the mill will be completed in the
fourth quarter of 2009 with treatment of ore commencing before the end
of 2009. Mine production is planned to increase throughout 2010 and
attain an annualized production rate of 4 million tonnes per year in
early 2011.

On March 24, 2008 the Company announced that it had signed a
Participation Agreement with the Kamloops Division of the Secwepemc
Nation, comprising the Kamloops Indian Band and the Skeetchestn Indian
Band.

Business Combination
The Company signed a letter agreement dated March 31, 2008 with
Metallica Resources Inc. ("Metallica") and Peak Gold Ltd. ("Peak") to
complete a business combination ("the Transaction") whereby New Gold
would be the surviving company. The Transaction is subject to the
completion of confirmatory due diligence, definitive documentation,
regulatory approvals and obtaining a minimum two-thirds shareholder
approval at special meetings of the shareholders of each of Metallica
and Peak and majority approval at a general meeting of the shareholders
of New Gold. Peak and Metallica's obligations were conditional upon the
Holders of the Company's 10% Notes agreeing by extraordinary resolution
to certain amendments to the Note Indenture. As announced on May 8,
2008, the necessary approval of the Noteholders has been obtained. On
May 12, 2008 the Company, Peak and Metallica jointly announced that the
definitive agreement had been signed.



For more information contact:

Mr Cliff Davis, President and Chief Executive Officer
or Ms. Laura Sandilands, Manager of Investor Relations
New Gold Inc.
70 University Avenue
Toronto, Ontario
M5J 2M4

Phone: (416) 977-1067
Toll free: (877) 977-1067

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Copyright (c) 2008 NEW GOLD INC. (TSX/AMEX:NGD) All rights reserved.
For more information visit our website at http://www.newgoldinc.com/ or
send mailto:invest@newgoldinc.com
Message sent on Wed May 14, 2008 at 6:39:33 AM Pacific Time
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