2007 Financial Results, Project Cost Update and Project Update

VANCOUVER, BRITISH COLUMBIA, Mar 31 (MARKET WIRE) --
(All amounts are in Canadian $)

New Gold Inc. (the "Company" or "New Gold") (TSX: NGD)(AMEX: NGD) is
pleased to provide 2007 financial year end results and an update on its
New Afton Copper Gold Project situated 10 kilometres west of Kamloops,
British Columbia.

2007 Year End Results

The Company incurred a loss of $61.4 million or $2.00 per share in 2007
compared with a loss of $3.5 million or $0.15 per share in 2006. The
increased loss is primarily attributable to the $50.1 million impairment
charge which the Company took in 2007 in respect of its investments in
non-bank sponsored Asset Backed Commercial Paper ("ABCP"). In addition,
the Company expensed $22.1 million related to interest and accretion
charges in respect of the debt issuances which were completed in June and
July 2007, which do not qualify for capitalizing to the New Afton Copper
Gold Project (the "Project") costs. Partially offsetting these two items
is an increase in interest income of $3.8 million as well as the
recognition of a future tax recovery of $9.9 million in 2007 relating to
available loss carry forward amounts and share and debt issue costs.

In 2007, the Company expended $39.3 million, including capitalized
financing costs, on the Project and Ajax property as compared to $20.2
million in 2006. In 2007, the Company's primary expenditures were $25.7
million on the underground development related to the expansion of the
existing 2 kilometre decline and commencement of new development faces,
$5.0 million on interest capitalized and paid in 2007, $3.0 million in
payments to complete the feasibility study on the Project, $4.5 million
on surface exploration in and around the New Afton deposit and $0.8
million on exploration of the Company's Ajax property and optioned
properties. In 2006, the Company spent $6.3 million on the feasibility
study on the Project, $6.1 million on underground exploration, including
support services for the underground exploration, and $2.3 million for
tunneling costs (expended in 2005 but paid in 2006).

In addition, the Company spent $30.0 million on property, plant and
equipment in 2007 as compared to only $0.4 million in 2006. The
significant increase relates to the receipt of the initial portion of the
mine development fleet ($11.2 million) and installment payments made on
long lead mill equipment orders ($1.6 million). Additionally, the Company
completed the acquisition of the surface rights for the Project in the
fourth quarter of 2007 for consideration of $16.3 million.

On June 28, 2007 and July 27, 2007, the Company completed an offering
(the "Offering") through a syndicate of underwriters, pursuant to which
the following securities were issued:

- 237,000 Series D units at a price of $1,000 per unit, each unit
consisting of a $1,000 principal amount unsecured note (the "Note") and
100 share purchase warrants;

- 55,000 5% subordinated convertible debentures at a price of $1,000 per
debenture;

- 2,055,000 flow-through shares at $9.75 per share; and

- 10,700,000 shares at $7.50 per share.

The total Offering generated gross cash proceeds of $392.3 million (net
proceeds $374.5 million).

Cash Resources

As at December 31, 2007, the Company had cash and cash equivalents
totalling $190.2 million and negative working capital of $29.6 million.
The negative working capital position is due to the classification of the
Company's Notes as a current liability, because of a provision in the
Note Indenture governing such Notes, which requires the Company to obtain
permits related to the Project on or before June 27, 2008. The Mine
Permit, which is the principal approval required for the development of
the mine, was received on October 31, 2007. The additional material
permits relate to the use of water and waste management respecting
effluent, sewage and air emissions. The Company is in the process of
applying for all of these permits; however if the permits are not
obtained by June 28, 2008 the Company may be obligated under the Note
Indenture to offer to redeem the Notes at par value ($237 million) from
the holders. The Company is presently reviewing alternatives, including
seeking an extension to the June 28, 2008 date. The negative working
capital position is also due to the classification of the Company's
investments in ABCP as non-current assets and will continue to be
classified as such until no sooner than the restructuring of the ABCP is
completed. The Company has $120 million of estimated recoverable value
($170 million face value) in investments subject to the ABCP
restructuring in Canada.

The Company will be required to raise additional capital either from the
issuance of flow-through shares which qualify for the vast majority of
the underground development costs, additional debt, although this market
is currently limited due to the restrictive credit markets world-wide, or
equity financings. The timing and amount of these will be impacted by the
timing and ultimate resolution of the Company's ABCP investments.

Project Update

Construction started in 2007 with underground mine development which is
the critical path component of the Project. Cementation Canada Inc.
("Cementation"), which was engaged as the Company's underground
contractor in late 2006, has completed the expansion of the existing 2
kilometre exploration decline suitable for the larger development
equipment. It is now proceeding on progressing three underground faces
plus the surface portal from which mining commenced in January 2008. In
support of the mining activities there are presently 3 mining crews
working 7 days a week, 20 hours a day. The Cementation crew totals 71
contractors and their efforts are being supported by 4 mining jumbos, 6
haulage trucks, 4 rock bolters, 7 mining scoops and a fleet of equipment
to deliver and apply shotcrete.

The Company has ordered the long lead mill components and ordered and
received the initial mine development fleet. Additional major components
for the surface facilities that have been awarded since December 31, 2007
include the electrical transformers, power line upgrading and the mill
building and site office facilities.

At the end of February 2008, the mine site employee and contractor levels
totaled 146. The development crews will increase from three to 6 crews
once the underground development reaches the bottom of the ore body and
the ore access development commences in the second half of 2008.

The Company has retained AMEC Americas Ltd. ("AMEC") as its EPCM
Contractor and Ledcor Projects Inc ("Ledcor") is being engaged to
construct the surface facilities including the plant and tailings
facilities. Ledcor is scheduled to commence excavation of the surface
facilities in April of 2008 and building erection is planned to commence
in September/October of 2008.

Project Cost Update

Costs of building mining projects world-wide have been increasing as a
result of higher labour and material costs. As a result of a
comprehensive review overseen by AMEC 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 contained in the Feasibility Study and are as
follows:

-----------------------------------------------------
Major Area ($M) % of Total Costs
-----------------------------------------------------
Mining $197.5 33
-----------------------------------------------------
Site Development $16.3 3
-----------------------------------------------------
Process $90.5 15
-----------------------------------------------------
Utilities $12.5 2
-----------------------------------------------------
Ancillary Buildings $12.3 2
-----------------------------------------------------
Water/Waste Management $14.4 2
-----------------------------------------------------
Total Direct Costs $343.5 58
-----------------------------------------------------
EP Cost $22.1 4
-----------------------------------------------------
Construction Management $12.3 2
-----------------------------------------------------
Construction Indirects $77.1 13
-----------------------------------------------------
Other Indirect costs $11.3 2
-----------------------------------------------------
Total Indirect Costs $122.8 21
-----------------------------------------------------
Owner's costs $74.0 12
-----------------------------------------------------
Contingency $48.6 8
-----------------------------------------------------
Capitalized Operating Costs $3.3 1
-----------------------------------------------------
Total Other Costs $125.9 21
-----------------------------------------------------
Total Costs $592.2 100
-----------------------------------------------------

These capital costs will see the mine reach the 4 million tonne per
year throughput rate and a portion of these costs can be funded by
operations during the initial 1.6 million tonne per year ramp up period.
The Company is presently completing its review of the financial and
operational consequences of reducing the ramp up period of less than 12
months from the presently disclosed 27 months and any corresponding
effect on funding requirements. The Project cost increase is primarily
related to labour cost increases which are now based on actual contractor
labour rates for the surface and underground contractors, particularly in
the underground development area plus escalation on material costs. The
Project scope has not been amended from that contained in the Feasibility
Study.To December 31, 2007, the Company has expended approximately $39 million
of the Project capital costs.

Participation Agreement with First Nations

As announced on March 24, 2008, the Company has entered into a
Participation Agreement with the Kamloops Division of the Secwepemc
Nation, comprising the Kamloops Indian Band and the Skeetchestn Indian
Band. The purpose of the Participation Agreement is to establish a
co-operative and mutually beneficial relationship between the First
Nations and the Company with respect to the Project and provide a
long-term framework for communication, collaboration and cooperation. The
Agreement will provide the Kamloops Division with economic opportunities
and social and financial benefits, including employment, education,
training and business opportunities. The Agreement secures the consent of
the Kamloops Division to the Project and its support through all project
phases.

Finalization of Arrangements with Abacus Mining & Exploration Corp

As announced on March 25, 2008, the arrangements with Abacus Mining &
Exploration Corp. ("Abacus") and with Teck Cominco Ltd. ("Teck"), which
were first reported on in the October 30, 2007 release, have been
finalized. The agreement between Abacus, Teck and the Company is intended
to ensure that New Gold and Abacus are able to freely develop their
assets in the area of the New Afton Project. This agreement will ensure
that Abacus maintains the rights of access previously granted to it by
Teck and provides Abacus with shared use of New Gold's water pipeline in
the event that it develops a new milling operation. New Gold will be
provided access from the Trans-Canada Highway to its New Afton operations
over a small portion of the land which Abacus is purchasing from Teck
around the old Afton mill building.

The agreement between Abacus and the Company is intended to ensure that
any economic mineralization within and surrounding the past producing
Ajax pits, is explored, delineated and developed in the most effective
manner. As a result the agreement is intended to grant Abacus an option
to explore for, and potentially develop, mineralization in the area
surrounding Abacus' Ajax Mineral Claims, which overly the past-producing
Ajax pits. Under this agreement Abacus must spend $2.5 million over 2
years over a portion of New Gold's mineral claims surrounding the Ajax
pits, and complete a preliminary economic study within 6 months following
the 2 year period. If economic mineralization is established, it will be
developed as a joint venture between the two companies. In the event of
an open pit operation the interests will be 60:40 in favour of Abacus who
will be the operator. In the event of an underground operation the
interests will be 60:40 in favour of New Gold who will be the operator.

Move to Kamloops

With the financial, personnel, administration and Project functions all
having been moved to Kamloops, we have decided to close our Vancouver
office effective March 31, 2008. All enquiries regarding investor and
shareholder matters should now be directed to our Toronto office.

Certain of the statements made and information contained herein is
"forward- looking information" within the meaning of the Securities Act
(Ontario) and the Securities Act (Alberta) or "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange
Act of 1934 of the United States. Forward-looking statements are subject
to a variety of risks and uncertainties which could cause actual events
or results to differ from those reflected in the forward-looking
statements, including, without limitation, risks and uncertainties
relating to the interpretation of drill results and the estimation of
mineral resources and reserves, the geology, grade and continuity of
mineral deposits, the possibility that future exploration, development or
mining results will not be consistent with the Company's expectations,
metal recoveries, accidents, equipment breakdowns, title matters and
surface access, labour disputes or other unanticipated difficulties with
or interruptions in production, the potential for delays in exploration
or development activities or the completion of feasibility studies, the
inherent uncertainty of production and cost estimates and the potential
for unexpected costs and expenses, commodity price fluctuations, currency
fluctuations, failure to obtain adequate financing on a timely basis and
other risks and uncertainties, including those described under Risk
Factors in the Company's Annual Information Form and in each management
discussion and analysis. Forward-looking information is in addition based
on various assumptions including, without limitation, the expectations
and beliefs of management, the assumed long term price of copper and
gold, that the feasibility study will confirm that a technically viable
and economic operation exists, that the Company will receive required
permits and access to surface rights, that the Company can access
financing, appropriate equipment and sufficient labour and that the
political environment within British Columbia and Canada will continue to
support the development of environmentally safe mining projects so that
the Company will be able to commence the development of the New Afton
project within the timetable to be established by the feasibility study.
Should one or more of these risks and uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking statements.
Accordingly, readers are advised not to place undue reliance on
forward-looking statements.

Cautionary note to U.S. investors concerning estimates of Measured and
Indicated Resources, and the use the terms "measured" and "indicated
resources." We advise U.S. investors that, while those terms are
recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize them. U.S. investors are cautioned
not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves.

WARNING: The Company relies upon litigation protection for
"forward-looking" statements.

Contacts:
New Gold Inc.
Mr Cliff Davis
President and Chief Executive Officer
(416) 977-1067 or Toll Free: 1-877-977-1067

New Gold Inc.
Ms. Laura Sandilands
Manager of Investor Relations
(416) 977-1067 or Toll Free: 1-877-977-1067

Copyright 2008, Market Wire, All rights reserved.

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