Exhibit 99.1

Consolidated Financial Statements

For the three months ended March 31, 2019

Contents

CONDENSED CONSOLIDATED INCOME STATEMENTS	2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	3
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION	4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW	6
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7

1. Description of business and nature of operations	7
2. Basis of preperation and significant accounting policies	7
3. Expenses	9
4. Trade and other receivables	10
5. Trade and other payables	11
6. Inventories	11
7. Mining interests	12
8. Long-term debt	14
9. Gold stream obligation	16
10. Leases	17
11. Derivative instruments	18
12. Share capital	21
13. Discontinued operations	23
14. Income and mining taxes	24
15. Reclamation and closure cost obligations	24
16. Supplemental cash flow information	25
17. Segmented information	26
18. Fair value measurement	29
19. Commitments and contingencies	31

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3

CONDENSED CONSOLIDATED INCOME STATEMENTS

			Three months ended March 31
(in millions of U.S. dollars, except per share amounts)	Note		2019			2018
Revenues				167.9			147.5
Operating expenses		3		86.9			89.1
Depreciation and depletion				61.2			56.1
Revenue less cost of goods sold				19.8			2.3
Corporate administration				5.3			5.4
Share-based payment expenses		12		0.3			1.4
Exploration and business development				0.4			0.6
Income (loss) from operations				13.8			(5.1	)
Finance income		3		0.5			0.4
Finance costs		3		(15.3	)		(16.6	)
Other losses		3		(8.7	)		(8.2	)
Loss before taxes				(9.7	)		(29.5	)
Income tax expense		14		(3.7	)		(1.4	)
Loss from continuing operations(1)				(13.4	)		(30.9	)
Earnings from discontinued operations, net of tax(1)		13		-			1.4
Net loss				(13.4	)		(29.5	)
Loss from continuing operations per share
Basic		12		(0.02	)		(0.05	)
Diluted		12		(0.02	)		(0.05	)
Net loss per share
Basic		12		(0.02	)		(0.05	)
Diluted		12		(0.02	)		(0.05	)
Weighted average number of shares outstanding (in millions)
Basic		12		579.1			578.7
Diluted		12		579.1			578.7

1. In the prior year period, Peak Mines and Mesquite were classified as discontinued operations and accordingly earnings and cash flows from continuing operations are presented exclusive of Peak Mines and Mesquite. Peak Mines was sold in April 2018 and Mesquite was sold in October 2018. Refer to Note 13 for further details.

See accompanying notes to the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

			Three months ended March 31
(in millions of U.S. dollars)	Note		2019			2018
Net loss				(13.4	)		(29.5	)
Other comprehensive income
(Loss) gain on revaluation of gold stream obligation		9		(2.9	)		6.0
Deferred income tax related to derivative contracts and gold stream obligation		9		1.0			(2.0	)
Total other comprehensive income (loss)				(1.9	)		4.0
Total comprehensive loss				(15.3	)		(25.5	)

See accompanying notes to the condensed consolidated financial statements.

 

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

		As at March 31	As at December 31
(in millions of U.S. dollars)	Note	2019	2018 (Note 2c)
ASSETS
Current assets
Cash and cash equivalents		132.3	103.7
Trade and other receivables	4	26.7	35.9
Inventories	6	127.7	141.8
Current income tax receivable		4.7	4.3
Prepaid expenses and other		5.4	4.7
Total current assets		296.8	290.4
Non-current inventories	6	15.9	14.9
Mining interests	7	1,845.7	1,853.4
Other	13	10.4	10.9
Total assets		2,168.8	2,169.6
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables	5	125.5	130.9
Current income tax payable		0.8	-
Total current liabilities		126.3	130.9
Reclamation and closure cost obligations	15	89.8	86.1
Gold stream obligation	9	167.5	161.9
Long-term debt	8	781.2	780.5
Deferred tax liabilities (note 2c)	14	56.3	56.3
Lease obligations	10	17.8	8.9
Other		0.5	0.5
Total liabilities		1,239.4	1,225.1
Equity
Common shares	12	3,035.2	3,035.2
Contributed surplus		105.2	105.0
Other reserves		4.2	6.1
Deficit (note 2c)		(2,215.2)	(2,201.8)
Total equity		929.4	944.5
Total liabilities and equity		2,168.8	2,169.6

See accompanying notes to the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three months ended March 31
(in millions of U.S. dollars)	Note		2019			2018
COMMON SHARES
Balance, beginning of period				3,035.2			3,036.5
Common share issuance		12		-			0.2
Balance, end of period				3,035.2			3,036.7
CONTRIBUTED SURPLUS
Balance, beginning of period				105.0			103.2
Equity settled share-based payments				0.2			1.1
Balance, end of period				105.2			104.3
OTHER RESERVES
Balance, beginning of period				6.1			(38.9	)
(Loss) gain on revaluation of gold stream obligation (net of tax)		9		(1.9	)		4.0
Balance, end of period				4.2			(34.9	)
DEFICIT
Balance, beginning of period (Note 2c)				(2,201.8	)		(961.3	)
Net loss				(13.4	)		(29.5	)
Balance, end of period				(2,215.2	)		(990.8	)
Total equity				929.4			2,115.3

See accompanying notes to the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

			Three months ended March
(in millions of U.S. dollars)	Note			2019			2018
OPERATING ACTIVITIES
Loss from continuing operations					(13.4	)		(30.9	)
Adjustments for:
Foreign exchange loss		3			1.9			19.9
Reclamation and closure costs paid		15			(3.1	)		(0.2	)
Depreciation and depletion					61.4			55.9
Other non-cash adjustments		16			7.2			(11.4	)
Income tax expense		14			3.7			1.4
Finance income		3			(0.5	)		(0.4	)
Finance costs		3			15.3			16.6
					72.5			50.9
Change in non-cash operating working capital		16			3.2			(10.2	)
Income taxes paid					(1.4	)		(1.0	)
Operating cash flows generated from continuing operations(1)					74.3			39.7
Operating cash flows generated from discontinued operations		13			-			25.4
Cash generated from operations					74.3			65.1
INVESTING ACTIVITIES
Mining interests					(50.4	)		(68.2	)
Proceeds from sale of Mesquite, net of transaction costs and other adjustments		13			12.0			-
Proceeds from sale of assets					-			0.3
Interest received					0.4			0.2
Investing cash flows used by continuing operations(1)					(38.0	)		(67.7	)
Investing cash flows used by discontinued operations		13			-			(9.1	)
Cashused by investing activities					(38.0	)		(76.8	)
FINANCING ACTIVITIES
Lease payments					(2.1	)		-
Cash settlement of gold stream obligation		9			(4.6	)		(3.6	)
Interest paid					(1.3	)		(3.1	)
Cash used by financing activities					(8.0	)		(6.7	)
Effect of exchange rate changes on cash and cash equivalents					0.3			(0.8	)
Cash and cash equivalents sold or classified as held-for-sale					-			(5.7	)
Change in cash and cash equivalents					28.6			(24.9	)
Cash and cash equivalents, beginning of period					103.7			216.2
Cash and cash equivalents, end of period					132.3			191.3
Cash and cash equivalents are comprised of:
Cash					88.1			141.4
Short-term money market instruments					44.2			49.9
					132.3			191.3

1. In the prior year period, Peak Mines and Mesquite were classified as discontinued operations and accordingly earnings and cash flows from continuing operations are presented exclusive of Peak Mines and Mesquite. Peak Mines was sold in April 2018 and Mesquite was sold in October 2018. Refer to Note 13 for further details.

See accompanying notes to the condensed consolidated financial statements.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For three months ended March 31, 2019

(Amounts expressed in millions of U.S. dollars, except per share amounts and unless otherwise noted)

1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

New Gold Inc. (“New Gold” or the “Company”) is an intermediate gold mining company engaged in the development and operation of mineral properties. The assets of the Company, directly or through its subsidiaries, are comprised of the Rainy River Mine in Canada (“Rainy River”), the New Afton Mine in Canada (“New Afton”) and the Cerro San Pedro Mine in Mexico (“Cerro San Pedro”). The Company also owns the Blackwater project in Canada (“Blackwater”).

The Company is a corporation governed by the Business Corporations Act (British Columbia). The Company’s shares are listed on the Toronto Stock Exchange and the NYSE American under the symbol NGD.

The Company’s registered office is located at 1100 Melville Street, Suite 610, Vancouver, British Columbia, V6E 4A6, Canada.

2. BASIS OF PREPERATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”) on a basis consistent with the accounting policies disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2018.

These unaudited interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018 which includes information necessary or useful to understanding the Company's business and financial statement presentation. In particular, the Company's significant accounting policies are presented as Note 2 in the audited consolidated financial statements for the year ended December 31, 2018 and have been consistently applied in the preparation of these unaudited condensed consolidated interim financial statements, except as noted below in “Changes in accounting policies”.

These unaudited condensed consolidated interim financial statements were approved by the Board of Directors of the Company on April 24^th, 2019.

(b) Changes in accounting policies

Leases

On January 6, 2016, the IASB issued IFRS 16, Leases (“IFRS 16”). This standard specifies the methodology to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases. This standard replaces IAS 17 Leases.  The effective date is for reporting periods beginning on or after January 1, 2019 with early adoption permitted.

The Company adopted IFRS 16 on January 1, 2019 using the modified retrospective approach. Under this approach, the cumulative effect of initially applying IFRS 16 is recognized as an adjustment to equity at the date of initial application. Comparative figures are not restated to reflect the adoption of IFRS 16. Additionally, the Company has adopted the exemption for leases with a lease term of 12 months or less and for leases that are low value. Given that the Company’s existing operating leases are not material, no adjustment to equity has been recognized upon IFRS 16 adoption on January 1, 2019.

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(c) Revisions to prior period comparatives

In the first quarter of 2019 the Company identified an immaterial error relating to its deferred tax liabilities. The result of this error is an increase to income tax expense and deferred tax liabilities of $14.8 million for the three months and year ended December 31, 2018. The resulting understatement of the deferred tax liabilities balance and the deficit balance of $14.8 million as at December 31, 2018 has been revised in the comparative condensed consolidated statement of financial position. There has been no change to the comparative condensed consolidated income statements or the comparative condensed consolidated statement of cash flow.

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3. EXPENSES

(a) Operating expenses by nature

	Three months ended March 31
(in millions of U.S. dollars)	2019			2018
OPERATING EXPENSES BY NATURE
Raw materials and consumables		28.3			39.3
Salaries and employee benefits		27.6			28.7
Contractors		16.8			17.1
Repairs and maintenance		10.6			10.3
General and administrative		6.4			5.9
Leases		1.0			1.4
Royalties		1.0			1.0
Drilling and analytical		0.3			0.4
Other		3.1			1.2
Total production expenses		95.1			105.3
Less: Production expenses capitalized		(17.7	)		(8.0	)
Add (less): Change in inventories		9.5			(8.2	)
Total operating expenses		86.9			89.1

(b) Finance costs and income

	Three months ended March 31
(in millions of U.S. dollars)	2019		2018
FINANCE COSTS
Interest on senior unsecured notes		13.2		13.2
Interest on Credit Facility		-		2.8
Accretion expense on decommissioning obligations (Note 15)		0.4		0.2
Other finance costs		1.7		0.4
Total finance costs		15.3		16.6
FINANCE INCOME
Interest income		0.5		0.4

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(c) Other gains and losses

	Three months ended March 31
(in millions of U.S. dollars)	2019			2018
OTHER GAINS AND LOSSES
Rainy River Underground project costs(1)		(1.7	)		-
Loss on foreign exchange		(1.9	)		(19.9	)
Other loss on disposal of assets		(0.1	)		-
Gain on revaluation of investments		0.5			-
Unrealized (loss) gain on revaluation of gold stream obligation (Note 9)		(4.7	)		3.3
Settlement and gain on revaluation of gold price option contracts		1.1			-
Settlement and (loss) gain on revaluation of copper price option contracts		(3.1	)		6.8
Revaluation of CSP’s reclamation and closure cost obligation and social closure costs(2)		(1.0	)		-
Gain on additional proceeds realized from collection of amounts receivable associated with Mesquite sale(3)		2.1			-
Other		0.1			1.6
Total other losses		(8.7	)		(8.2	)

1. In early 2019, the Company announced that it has deferred the Rainy River underground mine development plan. As a result, the Company has recognized demobilization and related costs within other gains and losses.

2. Cerro San Pedro has transitioned to the reclamation phase of its mine life cycle effective December 31, 2018. As a result, changes in estimate to Cerro San Pedro’s reclamation and closure cost obligation resulting from revisions to the expected cash flows will be recognized within other gains and losses. Additionally, social closure costs associated with Cerro San Pedro is also recognized within other gains and losses.

3. In the first quarter of 2019, the Company collected the outstanding working capital proceeds due from the sale of Mesquite, as well as a portion of the proceeds due from income tax refunds at Mesquite. Additional proceeds collected in excess of the amounts accrued as at December 31, 2018 were recognized within other gains and losses.

4. TRADE AND OTHER RECEIVABLES

	As at March 31	As at December 31
(in millions of U.S. dollars)	2019	2018
TRADE AND OTHER RECEIVABLES
Trade receivables	17.6	9.5
Sales tax receivable	8.5	14.0
Unsettled provisionally priced concentrate derivatives and swap contracts (Note 11)	(0.1)	(0.7)
Proceeds due from the sale of Mesquite, excluding income tax refund receivable (Note 13)	-	11.2
Other	0.7	1.9
Total trade and other receivables	26.7	35.9

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5. TRADE AND OTHER PAYABLES

	As at March 31		As at December 31
(in millions of U.S. dollars)	2019		2018
TRADE AND OTHER PAYABLES
Trade payables		36.5		47.1
Interest payable		19.4		6.9
Accruals		42.0		47.3
Current portion of reclamation and closure cost obligations (Note 15)		5.8		6.5
Current portion of gold stream obligation (Note 9)		15.7		18.3
Derivative liabilities (Note  11)		6.1		4.8
Total trade and other payables		125.5		130.9

6. INVENTORIES

	As at March 31			As at December 31
(in millions of U.S. dollars)	2019			2018
INVENTORIES
Stockpile ore		70.8			74.3
Work-in-process		8.9			7.7
Finished goods(1)		10.8			25.4
Supplies		53.1			49.3
		143.6			156.7
Less: non-current inventories(2)		(15.9	)		(14.9	)
Total current inventories		127.7			141.8

1. The amount of inventories recognized in operating expenses for the three months ended March 31, 2019 was $84.0 million (2018 -  $86.2 million).

2. Non-current inventories consist of low-grade stockpiled inventories at Rainy River.

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7. MINING INTERESTS

Mining Properties
	Depletable			Non- depletable			Plant & equipment			Construction in progress			Total
(in millions of U.S. dollars)
COST
As at December 31, 2017		2,353.0			562.0			1,379.3			57.0			4,351.3
Additions		70.8			23.8			48.3			72.0			214.9
Disposals		(0.4	)		-			(4.8	)		-			(5.2	)
Sale of Mesquite(1)		(323.5	)		-			(232.0	)		(1.8	)		(557.3	)
Transfers		(0.6	)		-			0.6			-			-
Asset impairment		(836.6	)		(218.2	)		-			-			(1,054.8	)
As at December 31, 2018		1,262.7			367.6			1,191.4			127.2			2,948.9
Additions		4.8			5.1			6.1			31.2			47.2
Disposals		-			(0.1	)		-			-			(0.1	)
Transfers		101.3			-			-			(101.3	)		-
As at March 31, 2019		1,368.8			372.6			1,197.5			57.1			2,996.0
ACCUMULATED DEPRECIATION
As at December 31, 2017		737.3			-			413.6			-			1,150.9
Depreciation for the year		169.1			-			130.7			-			299.8
Disposals		(0.1	)		-			(3.6	)		-			(3.7	)
Sale of Mesquite(1)		(189.3	)		-			(162.2	)		-			(351.5	)
As at December 31, 2018		717.0			-			378.5			-			1,095.5
Depreciation for the period		27.2			-			27.6			-			54.8
Disposals		-			-			-			-			-
Sale of Mesquite(1)		-			-			-			-			-
As at March 31, 2019		744.2			-			406.1			-			1,150.3
CARRYING AMOUNT
As at December 31, 2018		545.7			367.6			812.9			127.2			1,853.4
As at March 31, 2019		624.6			372.6			791.4			57.1			1,845.7

1. Refer to Note 13 for further information on discontinued operations. Mesquite was classified as an asset held-for-sale in the third quarter of 2018 and was sold in October 2018.

Carrying amount by property as at March 31, 2019

	As at March 31, 2019
(in millions of U.S. dollars)	Depletable		Non- depletable		Plant & equipment		Construction in progress		Total
MINING INTEREST BY SITE
New Afton		400.4		27.6		180.8		23.4		632.2
Rainy River		224.2		15.8		593.7		33.7		867.4
Blackwater		-		328.1		14.9		-		343.0
Other(1)		-		1.1		2.0		-		3.1
Carrying amount as at March 31, 2019		624.6		372.6		791.4		57.1		1,845.7

1. Other includes corporate balances and exploration properties.

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Carrying amount by property as at December 31, 2018:

	As at December 31, 2018
(in millions of U.S. dollars)	Depletable		Non- depletable		Plant & equipment		Construction in progress		Total
MINING INTEREST BY SITE
New Afton		421.9		26.1		191.6		16.4		656.0
Cerro San Pedro(2)		-		-		-		-		-
Rainy River		123.8		14.3		605.0		110.8		853.9
Blackwater		-		326.1		14.2		-		340.3
Other(1)		-		1.1		2.1		-		3.2
Carrying amount as at December 31, 2018		545.7		367.6		812.9		127.2		1,853.4

1. Other includes corporate balances and exploration properties.

2. Cerro San Pedro transitioned to the reclamation phase of its mine life cycle on December 31, 2018. As a result, Cerro San Pedro’s mining interests are fully amortized as at December 31, 2018.

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8. LONG-TERM DEBT

Long-term debt consists of the following:

	As at March 31	As at December 31
(in millions of U.S. dollars)	2019	2018
LONG-TERM DEBT
Senior unsecured notes - due November 15, 2022 (a)	495.6	495.3
Senior unsecured notes - due May 15, 2025 (b)	285.6	285.2
Total long-term debt	781.2	780.5

(a) Senior Unsecured Notes – due November 15, 2022

In 2012, the Company issued $500.0 million of senior unsecured notes (“2022 Unsecured Notes”). As at March 31, 2019, the face value was $500.0 million. The 2022 Unsecured Notes are denominated in U.S. dollars, mature and become due and payable on November 15, 2022, and bear interest at the rate of 6.25% per annum. Interest is payable in arrears in equal semi-annual instalments on May 15 and November 15 of each year. The Company incurred transaction costs of $9.9 million which have been offset against the carrying amount of the 2022 Unsecured Notes and are being amortized to net earnings using the effective interest method.

The 2022 Unsecured Notes are subject to a minimum interest coverage incurrence covenant of earnings before interest, taxes, depreciation, amortization, impairment, and other non-cash adjustments to interest of 2:1. The test is applied on a pro-forma basis prior to the Company incurring additional debt, entering into business combinations or acquiring significant assets, or certain other corporate actions. There are no maintenance covenants.

The 2022 Unsecured Notes are redeemable by the Company in whole or in part:

● During the 12-month period beginning on November 15 of the years indicated at the redemption prices below, expressed as a percentage of the principal amount of the 2022 Unsecured Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date:

Date	Redemption prices (%)
2018	102.08%
2019	101.04%
2020 and thereafter	100.00%

(b) Senior Unsecured Notes – due May 15, 2025

In 2017, the Company issued $300.0 million of senior unsecured notes (“2025 Unsecured Notes”). As at March 31, 2019, the face value was $300.0 million. The 2025 Unsecured Notes are denominated in U.S. dollars, mature and become due and payable on May 15, 2025, and bear interest at the rate of 6.375% per annum. Interest is payable in arrears in equal semi-annual instalments on May 15 and November 15 of each year. The Company incurred transaction costs of $10.7 million which have been offset against the carrying amount of the 2025 Unsecured Notes and are being amortized to net earnings using the effective interest method.

The 2025 Unsecured Notes are subject to a minimum interest coverage incurrence covenant of earnings before interest, taxes, depreciation, amortization, impairment, and other non-cash adjustments to interest of 2:1. The test is applied on a pro-forma basis prior to the Company incurring additional debt, entering into business combinations or acquiring significant assets, or certain other corporate actions. There are no maintenance covenants.

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The 2025 Unsecured Notes are redeemable by the Company in whole or in part:

● At any time prior to May 15, 2020 at a redemption price of 100% of the aggregate principal amount of the 2025 Unsecured Notes, plus a make-whole premium (consisting of future interest that would have been paid up to the first call date of May 15, 2020), plus accrued and unpaid interest, if any, to the redemption date.

● During the 12-month period beginning on May 15 of the years indicated at the redemption prices below, expressed as a percentage of the principal amount of the 2025 Unsecured Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date:

Date	Redemption prices (%)
2020	104.78%
2021	103.19%
2022	101.59%
2023 and thereafter	100.00%

(c) Credit Facility

The Company holds a revolving credit facility (the “Credit Facility”) with a maturity date of August 2021 and has a borrowing limit of $400.0 million.

The Credit Facility contains various covenants customary for a loan facility of this nature, including limits on indebtedness, asset sales and liens. The Credit Facility contains three covenant tests, the minimum interest coverage ratio, being earnings before interest, taxes, depreciation, amortization, exploration, impairment and other non-cash adjustments (“Adjusted EBITDA”) to interest, the maximum net debt to Adjusted EBITDA ratio (“Leverage Ratio”), and the maximum gross secured debt to Adjusted EBITDA (“Secured Leverage Ratio”), all of which are measured on a rolling four-quarter basis at the end of every quarter. Significant financial covenants are as follows:

		Twelve months ended March 31	Twelve months ended December 31
Financial Covenant		2019	2018
FINANCIAL COVENANTS
Minimum interest coverage ratio (Adjusted EBITDA to interest)	>3.0 : 1	4.7 : 1	4.5 : 1
Maximum leverage ratio (net debt to Adjusted EBITDA)	<4.5 : 1	2.5 : 1	2.6 : 1
Maximum secured leverage ratio (secured debt to Adjusted EBITDA)	<2.0 : 1	0.5 : 1	0.4 : 1

The interest margin on drawings under the Credit Facility ranges from 1.25% to 3.75% over LIBOR, the Prime Rate or the Base Rate, based on the Company’s Leverage Ratio and the currency and type of credit selected by the Company. Based on the Company’s Leverage Ratio, the rate is 3.25% over LIBOR as at March 31, 2019 (December 31, 2018 – 3.25%). The standby fees on undrawn amounts under the Credit Facility range from 0.51% to 0.84%, depending on the Company’s Leverage Ratio. Based on the Company’s Leverage Ratio, the rate is 0.73% as at March 31, 2019 (December 31, 2018 – 0.73%).

As at March 31, 2019, letters of credit amounting to $112.8 million have been issued through the Credit Facility (December 31, 2018 - $110.8 million). Letters of credit relate to reclamation bonds, and other financial assurances required with various government agencies.

 15 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

9. GOLD STREAM OBLIGATION

In 2015, the Company entered into a $175 million streaming transaction with RGLD Gold AG, a wholly owned subsidiary of Royal Gold Inc. (“Royal Gold”). Under the terms of the agreement, the Company will deliver to Royal Gold 6.5% of gold production from Rainy River up to a total of 230,000 ounces of gold and then 3.25% of the mine’s gold production thereafter. The Company will also deliver to Royal Gold 60% of the mine’s silver production to a maximum of 3.1 million ounces and then 30% of silver production thereafter. Royal Gold paid $175.0 million in consideration of this transaction.

In addition to the upfront deposit, Royal Gold will pay 25% of the average spot gold or silver price at the time each ounce of gold or silver is delivered under the stream. The difference between the spot price of metal and the cash received from Royal Gold will reduce the $175.0 million deposit over the life of the mine. Upon expiry of the 40‐year term of the agreement (which may be extended in certain circumstances), any balance of the $175.0 million upfront deposit remaining unpaid will be refunded to Royal Gold.

The Company has designated the gold stream obligation as a financial liability at fair value through profit or loss (“FVTPL”) under the scope of IFRS 9. Accordingly, the Company values the liability at the present value of its expected future cash flows at each reporting period with changes in fair value reflected in the consolidated income statements and consolidated statements of comprehensive income. The gold stream obligation contained a maximum leverage ratio covenant (net debt to Adjusted EBITDA) of 3.5 : 1.0 as at March 31, 2019.

The following is a summary of the changes in the Company’s gold stream obligation:

(in millions of U.S. dollars)
CHANGE IN STREAM OBLIGATION
Balance, December 31, 2017	273.5
Settlements during the period	(15.0	)
Fair value adjustments related to changes in the Company’s own credit risk(1)	(66.6	)
Other fair value adjustments(2)	(11.7	)
Balance, December 31, 2018	180.2
Less: current portion of gold stream obligation(3)	(18.3	)
Non-current portion of gold stream obligation	161.9
Balance, December 31, 2018	180.2
Settlements during the period	(4.6	)
Fair value adjustments related to changes in the Company’s own credit risk(1)	2.9
Other fair value adjustments(2)	4.7
Balance, March 31, 2019	183.2
Less: current portion of gold stream obligation(3)	(15.7	)
Non-current portion of gold stream obligation	167.5

1. Fair value adjustments related to changes in the Company’s own credit risk are included in other comprehensive income.

2. Other fair value adjustments are included in the consolidated income statements.

3. The current portion of the gold stream obligation is included in trade and other payables on the statement of financial position.

Fair value adjustments represent the net effect on the gold stream obligation of changes in the variables included in the Company’s valuation model between the date of receipt of deposit and the reporting date. These variables include accretion, risk-free interest rate, future metal prices, Company-specific credit spread and expected gold and silver ounces to be delivered.

 16 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

10. LEASES

The Company adopted IFRS 16 on January 1, 2019 using the modified retrospective approach. Under this approach, the cumulative effect of initially applying IFRS 16 is recognized as an adjustment to equity at the date of initial application. Comparative figures are not restated to reflect the adoption of IFRS 16. Additionally, the Company adopted the exemption for leases with a lease term of 12 months or less and for leases that are low value. As the Company’s operating leases were not material, no adjustment to equity was recognized upon IFRS 16 adoption on January 1, 2019.

(a) Right-of-use assets

The Company leases assets such as buildings, mobile equipment and machinery. These assets are included in Mining Interests on the statement of financial position and are classified as plant & equipment as per note 7 of the Company’s consolidated financial statements.

(in millions of U.S. dollars)
RIGHT-OF-USE ASSETS
Balance, December 31, 2018	20.8
Additions	12.2
Depreciation	(1.0)
Disposals	-
Balance, March 31, 2019	32.0

(b) Lease liabilities

Please see below for a maturity analysis of the Company’s lease payments:

As at March 31, 2019
(in millions of U.S. dollars)
MATURITY ANALYSIS FOR LEASES(3)
Less than 1 year	10.1
Between 1 and 3 years	11.0
Between 3 and 5 years	8.1
More than 5 years	-
Total undiscounted lease payments(1)	29.2
Carrying value of lease liabilities	26.9
Less: current portion of lease liabilities(2)	(9.1	)
Non-current portion of lease liabilities	17.8

1. Total undiscounted lease payments excludes leases that are classified as short term and leases for low value assets, which are not recognized as lease liabilities.

2. The current portion of the lease liabiltiies is included in trade and other payables on the statement of financial position.

3. In addition to the lease commitments included in this maturity analysis, the Company has committed to a Corporate office lease which will commence in the second quarter of 2019.

For the three months ended March 31, 2019, the Company recognized $0.2 million in interest expense on lease liabilities. For the three months ended March 31, 2019, the Company expensed $1.6 million related to leases that are classified as short term and $0.2 million for leases for low value assets.

 17 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

11. DERIVATIVE INSTRUMENTS

	As at March 31		As at December 31
(in millions of U.S. dollars)	2019		2018
DERIVATIVE ASSETS
Copper price option contracts(1)		-		0.7
Total derivative assets		-		0.7
DERIVATIVE LIABILITIES
Unsettled provisionally priced concentrate derivatives, and swap contracts(2)		0.1		0.7
Copper price option contracts(1)		2.4		-
Gold price option contracts(1)		3.7		4.8
Total derivative liabilities		6.2		5.5

1. As at March 31, 2019, copper and gold price option contracts are included within trade and other payables in the statement of financial position. As at December 31, 2018, copper price option contracts are included within prepaids and other in the statement of financial position and gold price option contracts are included within trade and other payables in the statement of financial position.

2. Unsettled provisionally priced concentrate derivatives are included within trade and other receivables in the statement of financial position.

(a) Provisionally priced contracts

The Company had provisionally priced sales for which price finalization is outstanding at March 31, 2019. Realized and unrealized non-hedged derivative gains (losses) on the provisional pricing of concentrate sales are classified as revenue, with the unsettled provisionally priced concentrate derivatives included in trade and other receivables. The Company enters into gold and copper swap contracts to reduce exposure to gold and copper prices. Realized and unrealized gains (losses) are recorded in revenue, with the unsettled gold and copper swaps included in trade and other receivables.

The following tables summarize the realized and unrealized gains (losses) on provisionally priced sales:

	Three months ended March 31, 2019
(in millions of U.S. dollars)	Gold			Copper		Total
GAIN (LOSS) ON THE PROVISIONAL PRICING OF CONCENTRATE SALES
Realized		0.9			3.1		4.0
Unrealized		(0.1	)		1.1		1.0
Total gain		0.8			4.2		5.0

	Three months ended March 31, 2018
(in millions of U.S. dollars)	Gold		Copper			Total
GAIN (LOSS) ON THE PROVISIONAL PRICING OF CONCENTRATE SALES
Realized		0.5		(1.5	)		(1.0	)
Unrealized		-		(2.0	)		(2.0	)
Total gain (loss)		0.5		(3.5	)		(3.0	)

 18 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

The following tables summarize the realized and unrealized gains (losses) on gold and copper swap contracts:

	Three months ended March 31, 2019
(in millions of U.S. dollars)	Gold			Copper			Total
(LOSS) GAIN ON SWAP CONTRACTS
Realized		(0.6	)		(4.1	)		(4.7	)
Unrealized		0.2			(1.3	)		(1.1	)
Total loss		(0.4	)		(5.4	)		(5.8	)

	Three months ended March 31, 2018
(in millions of U.S. dollars)	Gold			Copper		Total
(LOSS) GAIN ON SWAP CONTRACTS
Realized		(0.4	)		2.0		1.6
Unrealized		0.1			2.5		2.6
Total (loss) gain		(0.3	)		4.5		4.2

The following table summarizes the net exposure to the impact of movements in market commodity prices for provisionally priced sales:

As at March 31			As at December 31
	2019		2018
VOLUMES SUBJECT TO FINAL PRICING NET OF OUTSTANDING SWAPS
Gold ounces (000s)		1.9		0.8
Copper pounds (millions)		1.6		1.6

(b)  Copper price option contracts

In December 2018, the Company entered into copper price option contracts by purchasing put options at an average strike price of $2.50 per pound and selling call options at an average strike price of $3.00 per pound for 21,600 tonnes (approximately 47.6 million pounds) of copper production during 2019. The Company entered into these contracts at no premium and therefore incurred no investment costs upon initiation.

The call options sold and put options purchased are treated as derivative financial instruments and marked-to-market at each reporting period on the consolidated statement of financial position with changes in fair value recognized in other gains and losses. Realized gains and losses as a result of the exercise of the Company’s call and put options up to an amount not exceeding the Company’s production of copper pounds for the reporting period are recorded as an adjustment to revenue. The exercise of options on copper pounds in excess of the Company’s copper production for the reporting period are recorded as other gains and losses.

	Quantity outstanding	Remaining term	Exercise price ($/lb)	Fair value  - asset (liability) (1)
COPPER PRICE OPTION CONTRACTS OUTSTANDING
Copper call contracts - sold	16,200 tonnes	April – December  2019	3.00	(2.8)
Copper put contracts - purchased	16,200 tonnes	April – December  2019	2.50	0.4

1. The Company presents the fair value of its put and call options on a net basis on the consolidated statements of financial position. The Company has a legally enforceable right to set off the amounts under its option contracts and intends to settle on a net basis.

 19 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

(c)  Gold price option contracts

In December 2018, the Company entered into gold price option contracts by purchasing put options at an average strike price of $1,230 per ounce and selling call options at an average strike price of $1,300 per ounce for 192,000 ounces of gold production between January 2019 and December 2019 (“gold price option contracts”). The Company entered into these contracts at no premium and therefore incurred no investment costs upon initiation.

Consistent with the accounting treatment of the copper price option contracts described above, the call options sold and put options purchased are treated as derivative financial instruments and marked to market at each reporting period on the consolidated statement of financial position with changes in fair value recognized in other gains and losses. Realized gains and losses as a result of the exercise of the Company’s call and put options up to an amount not exceeding the Company’s production of gold ounces for the reporting period are recorded as an adjustment to revenue. The exercise of options on gold ounces in excess of the Company’s gold production for the reporting period are recorded as other gains and losses.

Quantity outstanding		Remaining term	Exercise price ($/lb)		Fair value - asset (liability) (1)
GOLD PRICE OPTION CONTRACTS OUTSTANDING
Gold call contracts - sold	144,000 oz	April – December  2019		1,300		(4.5	)
Gold put contracts - purchased	144,000 oz	April – December  2019		1,230		0.8

1. The Company presents the fair value of its put and call options on a net basis on the consolidated statements of financial position. The Company has a legally enforceable right to set off the amounts under its option contracts and intends to settle on a net basis.

 20 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

12. SHARE CAPITAL

At March 31, 2019, the Company had unlimited authorized common shares and 579.1 million common shares outstanding.

(a) No par value common shares issued

	Number of shares
(in millions of U.S. dollars, except where noted)		(000s	)	$
NO PAR VALUE COMMON SHARES ISSUED
Balance at December 31, 2017		578,636			3,036.5
Issuance of common shares under First Nations agreements		113			0.3
Exercise of options and vested performance share units		366			0.3
Reversal of deferred tax recovery(1)		-			(1.9	)
Balance at December 31, 2018		579,115			3,035.2
Balance at March 31, 2019		579,115			3,035.2

1. In 2017, the Company closed a bought deal financing and related agreements and recognized a deferred tax recovery of $1.9 million. This deferred tax recovery was reversed in 2018.

(b) Share-based payment expenses

The following table summarizes share-based payment expenses:

	Three months ended March 31
(in millions of U.S. dollars)	2019	2018
SHARE-BASED PAYMENT EXPENSES
Stock option expense (i)	0.2	0.6
Performance share unit expense	-	0.8
Restricted share unit expense(1)	0.4	0.4
Shares issued under First Nations agreements(1)	-	0.3
Total share-based payment expenses	0.6	2.1

1. For the three months ended March 31, 2019 $0.3 million of share-based payment expenses were recognized in operating expenses (2018 - $0.5 million).

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(i) Stock options

The following table presents changes in the Company’s stock option plan:

	Number of options	Weighted average exercise price
	(000s)	C$/share
CHANGES TO THE COMPANY’S STOCK OPTION PLAN
Balance at December 31, 2017	13,087	5.08
Forfeited	(1,925)	4.13
Expired	(2,534)	8.22
Balance at December 31, 2018	8,628	4.39
Granted	2,250	1.17
Forfeited	(340)	3.83
Expired	(1,130)	6.33
Balance at March 31, 2019	9,408	3.41

(c) Loss per share

The following table sets out the calculation of loss per share:

	Three months ended March 31
(in millions of U.S. dollars, except where noted)		2019			2018
CALCULATION OF LOSS PER SHARE
Loss from continuing operations			(13.4	)		(30.9	)
Net loss			(13.4	)		(29.5	)
Basic weighted average number of shares outstanding (in millions)			579.1			578.7
Dilution of securities:
Stock options			-			-
Diluted weighted average number of shares outstanding (in millions)			579.1			578.7
Loss from continuing operations per share:
Basic			(0.02	)		(0.05	)
Diluted			(0.02	)		(0.05	)
Net loss per share:
Basic			(0.02	)		(0.05	)
Diluted			(0.02	)		(0.05	)

The following table lists the equity securities excluded from the calculation of diluted loss per share. All stock options are excluded from the calculation of diluted earnings per share when the Company is in a net loss position.

	Three months ended March 31
(in millions of units)	2019	2018
EQUITY SECURITIES EXCLUDED FROM THE CALCULATION OF DILUTED EARNINGS PER SHARE
Stock options	9.4	11.8

 22 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

13. DISCONTINUED OPERATIONS

(a) Peak Mines

In the third quarter of 2017, Peak Mines in Australia (“Peak Mines”) met the criteria as a discontinued operation under IFRS 5. The Company completed the sale of Peak Mines in early April 2018 and recognized a loss from discontinued operations, net of tax of $0.8 million for the year ended December 31, 2018.

(b) Mesquite

In September 2018, the Company announced that it had entered into an agreement to sell the Mesquite Mine in the United States (“Mesquite”) and as a result Mesquite met the criteria as a discontinued operation under IFRS 5. The Company completed the sale of Mesquite in October 2018.

For the year ended December 31, 2018, the net earnings from Mesquite was reported as earnings from discontinued operations. Upon execution of the sale, the Company received $158.0 million in cash and incurred $0.9 million in disposal costs. In addition to the net cash proceeds, the purchase consideration included a working capital receivable due from the purchaser, which was collected in the first quarter of 2019. Additionally, the expected purchase consideration included an estimate for a receivable from the purchaser related to income tax refunds that were recoverable by Mesquite at the date of the sale, which is included in Other non-current assets on the statement of financial position. For the year ended December 31, 2018, the Company recognized a loss from discontinued operations of $154.1 million related to Mesquite.

 23 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

14. INCOME AND MINING TAXES

The following table outlines the composition of income tax expense between current tax and deferred tax:

	Three months ended March 31
(in millions of U.S. dollars)	2019		2018
CURRENT INCOME AND MINING TAX EXPENSE
Canada		1.8		-
		1.8		-
DEFERRED INCOME AND MINING TAX EXPENSE
Canada		1.9		1.4
		1.9		1.4
Total income tax expense		3.7		1.4

15. RECLAMATION AND CLOSURE COST OBLIGATIONS

Changes to the reclamation and closure cost obligations are as follows:

(in millions of U.S. dollars)	Rainy River			New Afton			Mesquite			Cerro San Pedro			Blackwater			Total
CHANGES TO RECLAMATION AND CLOSURE COST OBLIGATIONS
Balance – December 31, 2017		63.4			11.6			20.5			19.2			9.4			124.1
Reclamation expenditures		(0.3	)		-			-			(0.9	)		-			(1.2	)
Unwinding of discount		1.5			0.2			0.4			0.1			0.2			2.4
Revisions to expected cash flows		(6.1	)		(0.3	)		(0.9	)		1.5			(0.5	)		(6.3	)
Foreign exchange movement		(4.9	)		(0.8	)		-			0.1			(0.8	)		(6.4	)
Less: amounts reclassified as held for sale and sold		-			-			(20.0	)		-			-			(20.0	)
Balance – December 31, 2018		53.6			10.7			-			20.0			8.3			92.6
Less: current portion of closure costs (Note 5)		-			-			-			(6.5	)		-			(6.5	)
Non-current portion of closure costs		53.6			10.7			-			13.5			8.3			86.1
Balance – December 31, 2018		53.6			10.7			-			20.0			8.3			92.6
Reclamation expenditures		-			-			-			(3.1	)		-			(3.1	)
Unwinding of discount		0.3			0.1			-			-			-			0.4
Revisions to expected cash flows		2.8			0.1			-			0.6			0.5			4.0
Foreign exchange movement		1.1			0.2			-			0.2			0.2			1.7
Balance – March 31, 2019		57.8			11.1			-			17.7			9.0			95.6
Less: current portion of closure costs (Note 5)		-			-			-			(5.8	)		-			(5.8	)
Non-current portion of closure costs		57.8			11.1			-			11.9			9.0			89.8

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16. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information (included within operating activities) is as follows:

	Three months ended March 31
(in millions of U.S. dollars)		2019	2018
CHANGE IN NON-CASH OPERATING WORKING CAPITAL
Trade and other receivables		(4.8)	(1.3)
Inventories		5.5	(12.5)
Prepaid expenses and other		(1.0)	(0.4)
Trade and other payables		3.5	4.0
Total change in non-cash operating working capital		3.2	(10.2)

	Three months ended March 31
(in millions of U.S. dollars)		2019	2018
OTHER NON-CASH ADJUSTMENTS
Unrealized loss (gain) on concentrate contracts		0.1	(2.5)
Equity settled share-based payment expense		0.2	1.2
Loss on disposal of assets		0.1	-
Settlement and gain on revaluation of gold price option contracts		(1.1)	-
Unrealized loss (gain) on gold stream obligation		4.7	(3.3)
Settlement and loss (gain) on revaluation of copper price option contracts		3.1	(6.8)
Revaluation of CSP’s reclamation and closure cost obligation		0.6	-
Other non-cash adjustments		(0.5)	-
Total other non-cash adjustments		7.2	(11.4)

 25 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

17. SEGMENTED INFORMATION

(a) Segment revenues and results

The Company manages its reportable operating segments by operating mines and development projects. Operating results of reportable operating segments are reviewed by the Company's chief operating decision maker ("CODM") to make decisions about resources to be allocated to the segments and to assess their performance.

Effective January 1, 2019, Cerro San Pedro is in the reclamation phase of its mine life cycle. As a result, the Company has grouped Cerro San Pedro with the Company’s development and exploration properties that have no revenues or operating costs. The segmented information for the three months ended March 31, 2018 has been restated to reflect the Company’s reportable operating segments for the three months ended March 31, 2019.

 The results from operations for these reportable operating segments are summarized in the following tables:

Three months ended March 31, 2019
(in millions of U.S. dollars)	Rainy River		New Afton		Corporate			Other(1)		Total
OPERATING SEGMENT RESULTS
Gold revenues		91.5		22.8		-			-		114.3
Copper revenues		-		51.5		-			-		51.5
Silver revenues		1.0		1.1		-			-		2.1
Total revenues(2)		92.5		75.4		-			-		167.9
Operating expenses		57.3		29.6		-			-		86.9
Depreciation and depletion		21.7		39.5		-			-		61.2
Revenue less cost of goods sold		13.5		6.3		-			-		19.8
Corporate administration		-		-		5.3			-		5.3
Share-based payment expenses		-		-		0.3			-		0.3
Exploration and business development		0.1		0.2		0.1			-		0.4
Income (loss) from operations		13.4		6.1		(5.7	)		-		13.8

1. Other includes balances relating to the development properties and properties in the reclamation phase of the mine life cycle.

2. Segmented revenue reported above represents revenue generated from external customers. There were no inter-segment sales for the three months ended March 31, 2019.

 26 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

 

Three months ended March 31, 2018
(in millions of U.S. dollars)	Rainy River			New Afton		Corporate			Other(1)			Discontinued Operations(3)		Total
OPERATING SEGMENT RESULTS
Gold revenues		54.3			22.2		-			6.4			-		82.9
Copper revenues		-			61.2		-			-			-		61.2
Silver revenues		1.0			1.1		-			1.3			-		3.4
Total revenues(2)		55.3			84.5		-			7.7			-		147.5
Operating expenses		51.6			28.3		-			9.2			-		89.1
Depreciation and depletion		17.5			37.8		-			0.8			-		56.1
Revenue less cost of goods sold		(13.8	)		18.4		-			(2.3	)		-		2.3
Corporate administration		-			-		5.4			-			-		5.4
Share-based payment expenses		-			-		1.4			-			-		1.4
Exploration and business development		0.2			0.1		0.2			0.1			-		0.6
(Loss) income from operations		(14.0	)		18.3		(7.0	)		(2.4	)		-		(5.1	)

1. Other includes balances relating to the development properties and properties in the reclamation phase of the mine life cycle.

2. Segmented revenue reported above represents revenue generated from external customers. There were no inter-segment sales for the three months ended March 31, 2018.

3. Refer to Note 13 for further information on discontinued operations

 27 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

(b) Segmented assets and liabilities

The following table presents the segmented assets and liabilities:

Total assets					Total liabilities				Capital expenditures(1)
	As at March 31		As at December 31		As at March 31		As at December 31		Three months ended March 31
(in millions of U.S. dollars)	2019		2018 (note 2c)		2019		2018 (note 2c)		2019		2018
SEGMENTED ASSETS AND LIABILITIES
Rainy River		994.8		986.0		313.4		313.6		38.4		59.1
New Afton		696.1		730.9		78.2		73.8		10.5		7.2
Blackwater		343.9		341.4		20.2		18.8		1.4		1.9
Other(2)		134.0		111.3		827.6		818.9		0.1		-
Total assets, liabilities and capital expenditures		2,168.8		2,169.6		1,239.4		1,225.1		50.4		68.2
Capital expenditures from discontinued operations (Note 13)		-		-		-		-		-		9.2
Total assets, liabilities and capital expenditures		2,168.8		2,169.6		1,239.4		1,225.1		50.4		77.4

1. Capital expenditures per condensed consolidated statement of cash flows.

2. Other includes corporate, exploration properties and properties in the reclamation phase of the mine life cycle.

 28 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

18. FAIR VALUE MEASUREMENT

Fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In assessing the fair value of a particular contract, the market participant would consider the credit risk of the counterparty to the contract. Consequently, when it is appropriate to do so, the Company adjusts the valuation models to incorporate a measure of credit risk. Fair value represents management's estimates of the current market value at a given point in time.

The Company has certain financial assets and liabilities that are held at fair value. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts), or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. There were no transfers among Levels 1, 2 and 3 during the three months ended March 31, 2019 or the year ended December 31, 2018. The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer.

Valuation methodologies for Level 2 and 3 financial assets and liabilities:

Provisionally priced contracts and gold and copper swap contracts

The fair value of the provisionally priced contracts and the gold and copper swap contracts is calculated using the mark-to-market forward prices of London Metals Exchange gold and copper based on the applicable settlement dates of the outstanding provisionally priced contracts and copper swap contracts.

Gold and copper price option contracts

The fair value of the gold and copper price option contracts are calculated using the mark-to-market method based on fair value prices obtained from the counterparties of the gold price option contracts and copper price option contracts.

Gold stream obligation

The fair value of the gold stream obligation is calculated using the risk-free interest rate derived from the U.S. Treasury rate, forward metal prices, company specific credit spread based on the yield on the Company’s 2025 Senior Unsecured Notes, and expected gold and silver ounces to be delivered from Rainy River’s life of mine model.

Proceeds due from income tax refunds at Mesquite

The proceeds due from income tax refunds at Mesquite is related to income tax refunds that were recoverable by Mesquite on the date of the sale of Mesquite. These income tax refunds are required to be paid to the Company once Mesquite receives these income tax refunds. The fair value of the income tax refund receivable is calculated based on the value of the income tax refunds that Mesquite is expected to receive, and an unsecured discount rate.

Performance share units (PSU)

The fair value of the PSU liability is calculated using the quantity of base options subject to cash settlement, the weighted-average three-year achieved performance ratio (calculated using the annualized return of the Company’s share price compared to the annualized return of the S&P Global Gold Index) and the expected share price at the end of the vesting period.

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The following table summarizes the Company’s financial assets and liabilities by category and information about financial assets and liabilities measured at fair value on a recurring basis in the statement of financial position categorized by level of significance of the inputs used in making the measurements:

		As at March 31, 2019				As at December 31, 2018
(in millions of U.S. dollars)	Category	Level				Level
FINANCIAL ASSETS
Cash and cash equivalents	Financial assets at amortized cost			132.3				103.7
Trade and other receivables	Financial assets at amortized cost			26.8				36.6
Provisionally priced contracts	Financial instruments at FVTPL		2	1.1			2	(1.6	)
Gold and copper swap contracts	Financial instruments at FVTPL		2	(1.2	)		2	0.9
Copper price option contracts	Financial Instruments at FVTPL		2	-			2	0.7
Proceeds due from income tax refunds at Mesquite(2)	Financial Instruments at FVTPL		3	7.6			3	8.5
Investments	Financial instruments at FVTPL		1	1.3			1	0.8
FINANCIAL LIABILITIES
Trade and other payables(1)	Financial liabilities at amortized cost			97.9				101.3
Long-term debt	Financial liabilities at amortized cost			781.2				780.5
Gold stream obligation	Financial instruments at FVTPL		3	183.2			3	182.4
Performance share units	Financial instruments at FVTPL		3	0.2			3	0.2
Restricted share units	Financial instruments at FVTPL		1	0.3			1	0.3
Copper price option contracts	Financial instruments at FVTPL		2	2.4			2	-
Gold price option contracts	Financial instruments at FVTPL		2	3.7			2	4.8

1. Trade and other payables exclude the short-term portion of reclamation and closure cost obligations, the short-term portion of the gold stream obligation and derivative liabilities.

2. Proceeds due from income tax refunds at Mesquite are included in other non-current assets on the condensed consolidated statement of financial position.

 30 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD

The carrying values and fair values of the Company’s financial instruments are as follows:

As at March 31, 2019							As at December 31, 2018
(in millions of U.S. dollars)	Carrying value			Fair value			Carrying value			Fair value
FINANCIAL ASSETS
Cash and cash equivalents		132.3			132.3			103.7			103.7
Trade and other receivables		26.8			26.8			36.6			36.6
Provisionally priced contracts		1.1			1.1			(1.6	)		(1.6	)
Gold and copper swap contracts		(1.2	)		(1.2	)		0.9			0.9
Investments		1.3			1.3			0.8			0.8
Copper price option contracts		-			-			0.7			0.7
Proceeds due from income tax refunds at Mesquite(2)		7.6			7.6			8.5			8.5
FINANCIAL LIABILITIES
Trade and other payables(1)		97.9			97.9			101.3			101.3
Long-term debt		781.2			686.5			780.5			652.9
Gold stream obligation		183.2			183.2			182.4			182.4
Performance share units		0.2			0.2			0.2			0.2
Restricted share units		0.3			0.3			0.3			0.3
Copper price option contracts		2.4			2.4			-			-
Gold price option contracts		3.7			3.7			4.8			4.8

1. Trade and other payables exclude the short-term portion of reclamation and closure cost obligation, the short-term portion of the gold stream obligation and derivative liabilities.

2. Proceeds due from income tax refunds at Mesquite are included in other non-current assets on the condensed consolidated statement of financial position.

19. COMMITMENTS AND CONTINGENCIES

The Company has entered into a number of contractual commitments for capital items relating to operations and development. At March 31, 2019, these commitments totalled $63.2 million, $62.9 million of which is expected to fall due over the next 12 months. This compares to commitments of $27.2 million as at December 31, 2018, $26.9 million of which was expected to fall due over the upcoming year. Certain contractual commitments may contain cancellation clauses; however, the Company discloses its commitments based on management’s intent to fulfill the contracts.

 31 WW.NEWGOLD.COM   TSX:NGD  NYSE American:NGD