(All figures are in US dollars unless otherwise stated)

VANCOUVER, July 24 /PRNewswire-FirstCall/ - New Gold Inc. ('New Gold') (TSX and AMEX - NGD) is pleased to announce the second quarter production and cash cost, an update on the New Afton project, and a revised forecast for 2008. The production and cash cost information provided below are approximate figures and might differ slightly from the second quarter earnings and includes results for the period prior to the close of the business combination between New Gold, Peak Gold Ltd. and Metallica Resources Inc. on June 30, 2008. It should be noted that because the business combination closed on June 30, the consolidated interim statements of New Gold for the period ended June 30, 2008 that will be released on August 14, 2008 will not include the results presented below for the Cerro San Pedro mine and the New Afton project.

    Second Quarter Highlights
    Second quarter highlights reflect the operating results for the three
months ended June 30th, 2008 for Cerro San Pedro, Amapari and Peak Mines.
    -  Gold production was 62,705 ounces
    -  Gold sales were 62,730 ounces
    -  Total cash cost was $612 (net of by-product sales)
    -  Copper production was 1.237 million pounds
    -  Silver production was 284 thousand ounces
    First Half 2008 Highlights
    For the six month period ending June 30, 2008, the operational results for
Cerro San Pedro, Amapari and Peak Mines are as follows:
    -  Gold production was 124,295 ounces
    -  Gold sales were 130,351 ounces
    -  Total cash cost was $532 per ounce (net of by-product sales)
    -  Copper production was 3.4 million pounds
    -  Silver production was 512 thousand ounces

The Cerro San Pedro mine in Mexico achieved excellent results in the second quarter with gold sales increasing 39% at 22,190 ounces compared to 15,922 ounces in the first quarter of 2008. Silver sales increased 47% at 300,728 ounces in comparison to 203,973 ounces in the first quarter of 2008. Gold and silver production for the second quarter was 20,653 ounces and 283,749 ounces respectively and for the six month period ending June 30, 2008, gold and silver production was 38,943 ounces and 512,372 ounces respectively. Total cash cost net of by product sales for the second quarter was $375 per ounce and for the six month period ending June 30, 2008, was $426 per ounce. Cash cost showed a 24% improvement in the second quarter in comparison to the first quarter reflecting the production ramp up from the heaps.

Operations at the Amapari mine in Brazil continued to be challenged by low equipment availabilities and extreme rain falls. Second quarter gold production was 20,938 ounces and for the six month period ending June 30, 2008, the gold production was 39,139 ounces. Total cash costs for the quarter were $968 per ounce bringing the figure for the six month period ending June 30, 2008 to $829 per ounce. During the quarter, access to higher grade materials was restricted due to unfavourable weather conditions, while mobile and plant equipment availabilities adversely impacted the amount of ore processed. Unit costs were also impacted by $165 per ounce due to reconciliation of leach pad inventory. A comprehensive review of operations at Amapari is underway and is expected to return the project to normal operating levels by year end.

Second quarter results at Peak Mines in Australia included production of 21,114 ounces of gold and 1.2 million pounds of copper and for the six month period ending June 30, 2008, gold production was 46,213 ounces and copper production was 3.4 million pounds. Total cash cost net of by product sales for the second quarter was $472 per ounce and for the six month period ending June 30, 2008, was $360 per ounce. Production was adversely affected by delayed development of two high grade stopes due to difficult ground conditions deferring production to later in the year. While expenditures in Australian dollar terms were at expected levels, lower production and exchange rate movement impacted the cash costs.

Commenting on operating results, Robert Gallagher, President and Chief Executive Officer said, 'The results at Cerro San Pedro are excellent and in-line with expectations. Great work has also been done at the community level in the environs of the mine.