During the first and second quarters of 2005, New Gold completed a systematic evaluation of the property, which included geological mapping, soil sampling and geophysical surveys, and identified several targets having the potential to host significant copper-gold and/or epithermal gold mineralization. New Gold also completed 40 reverse circulation rotary holes totaling 7,475 meters targeting four different porphyry and epithermal zones.

Encouraging drill results were obtained from the Cerro Matta copper-gold target where a mineralized intrusive is exposed over an area of 300 by 900 meters within a larger altered envelope. During the last quarter of 2005, New Gold completed a second reverse circulation drilling program of seven holes totaling 2,250 meters at the Cerro Matta target. Results included 158 meters averaging 0.36% copper and 0.37 g/t gold in drill hole MRC-15. In July and August 2006, New Gold completed three core holes totaling 1,500 meters at Cerro Matta. All three holes intercepted porphyry-style copper-gold mineralization, which generally confirmed the overall grade and continuity encountered in previous drilling programs. The best hole intercepted 108 meters of oxidized copper-gold mineralization averaging 0.40% copper and 0.96 g/t gold from 314 to 422 meters. This intercept was followed by 186 meters of transitional oxide-sulfide mineralization that averaged 0.43% copper and 0.31 g/t gold. This drilling program confirms two distinct target types at Cerro Matta: a near-surface copper oxide mineralization and a deeper copper-gold sulfide mineralization. An additional 3,268-meter drilling program was completed in 2007. Results include 104 meters averaging 0.39% copper and 0.26 g/t gold from 358 to 462 meters depth in hole MDH-4, and 190 meters averaging 0.37% copper and 0.21 g/t gold from 254 to 444 meters depth in hole MDH-8. Surface trenching and sampling are in progress in preparation for another round of drilling planned for late 2007 or early 2008.

The drill results have defined a core zone of copper-gold mineralization of 400 by 500 meters, extending to a vertical depth of approximately 400 meters. The core zone occurs within a broader two square kilometers area of hydrothermal alteration with anomalous copper-gold mineralization. The Cerro Matta target remains open in three directions and at depth.

In the Quebrada target area, epithermal, or near-surface, gold mineralization is hosted in a shallow zone of oxidized sedimentary rocks along a major northeast-trending fault system. Twenty-five reverse circulation drill holes totaling 2,001 meters were completed, with 12 of these holes intercepting anomalous gold mineralization over intervals ranging from 1 to 17 meters with grades ranging from 0.50 to 3.70 g/t gold. These holes were drilled within a 300 by 250 meter area that remains open to the northeast and southwest. The best hole, QG-02, intercepted 17 meters averaging 1.98 g/t gold and included 8 meters averaging 3.70 g/t gold. Further geochemical and geological work is planned to determine if the Quebrada area merits additional drilling.

Maps

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