New Gold extends limits of resource model at New Afton

Vancouver – The first hole of the 2006 underground exploration program has returned significant copper and gold values while extending the known limit of mineralization at the New Afton project being explored by New Gold (NGD-T, NGD-X) near Kamloops, B.C.

The best interval from Hole UA-66 was 21.6 metres grading 2.27% copper, 2.05 grams gold, 4.76 grams silver and 0.1 gram palladium per tonne, or 3.67% copper-equivalent, at the bottom of the hole.

The intersection is located about 30 metres west of the resource model, and about 60 metres below its lower limits. The hole stopped in mineralization because of technical problems, but the base of the mineralization occurred at a vertical depth of 900 metres, making it the deepest occurrence encountered from the underground drill program.

New Gold also reported encouraging results from its newly completed infill drilling program. Highlights were: Hole UA-54, which returned 1.34% copper and 1.01 gram gold, or 2.06% copper-equivalent, over 236 metres (136 metres true thickness); and Hole UA-53, which returned 2.05% copper and 1.46 grams gold, or 3.04% copper-equivalent, over 72 metres (59 metres true thickness), contained within a wider zone of 1.82% copper and 1.32 grams gold, or 2.71% copper-equivalent, over 118 metres (95 metres true thickness).

The results of the infill drill program will be used to update a previously released resource estimate for New Afton, a copper-gold deposit being defined beneath and adjacent to the past-producing Afton openpit mined by a major company in the 1970s and 1980s.

The previous estimate placed measured and indicated resources at 68.7 million tonnes grading 1.08% copper, 0.85 gram gold, 2.62 grams silver and 0.12 gram palladium, or about 1.68% copper-equivalent.

The new resource estimate is expected in mid-2006, and will be used in a feasibility study that will examine the economic potential and technical parameters for a new underground mine at New Afton.