New Gold Inc.: New Afton Project; Continued Positive Underground Drill Results; Up to 2.37% Cu, and 1.52 grams Au/t over 54 Metres

Business Wire, June 22, 2005

VANCOUVER, British Columbia -- New Gold Inc. (TSX:NGD)(AMEX:NGD) is pleased to announce continued success from its ongoing 20,000 metre (m) underground diamond drill program at its New Afton Copper-Gold Project, Kamloops, B.C., Canada. The drilling continues to intersect zones of significant grade copper-gold mineralization (greater than 1.50% copper equivalent) which correlate well with those identified by the current resource block model.

This program is being completed from the Project's underground exploration decline and is designed to complete the infill drilling necessary to confirm the validity of the current resource block model and (in conjunction with completion of a feasibility study) is expected to enable the Company to convert current resources into reserves. The underground decline is forecast to be completed to a total length of 2,000m.

The current results are from a total of seven drill holes completed on two sections (76E and 84E), and are shown in the attached table and figures. Future results will continue to be released on a sectional basis as the infill drilling is completed. All copper equivalent grades are calculated using the following metal prices - Copper (Cu) US$0.85/lb; Gold (Au); US$375/oz; Silver (Ag) US$5.25/oz; and Palladium (Pd) US$200/oz. This is consistent with the metal prices used in the existing independently calculated resource and is also consistent with metal prices used in preparation of the independent Scoping Study (by qualified person James Currie, P.Eng, 2004 Behre Dolbear Advanced Scoping Study).

The highlights of these results are:

- Individual intersections encountered include 54m (46m true thickness) grading 2.37% Cu and 1.52 grams per tonne (g/t) Au (3.46% Cu equivalent); and 82m (36m true thickness) grading 1.65% Cu and 0.84 g/t Au (2.26% Cu equivalent).

- The weighted average for the principal mineralized intersections of the three holes on Section 76E was 1.66% Cu and 0.76 g/t Au (2.22% Cu equivalent) over 54m.

- The weighted average for the principal mineralized intersections of the four holes on Section 84E was 1.17% Cu and 0.81 g/t Au (1.77% Cu equivalent) over 36m.

- Higher grade intersections (greater than 1.50% Cu equivalent) continued to be encountered where predicted by the resource model.

- In addition, a number of higher grade intersections were encountered on Section 84E in areas indicated as low grade by the block model, suggesting the possibility that this higher grade mineralization extends further to the east than previously believed.

- The underground exploration decline has now been advanced more than 1,040m and is ahead of schedule. The cross-cut to directly access the ore has been started. Ground conditions continue to be better than anticipated and are better at depth.

Upon releasing these results, President and CEO, Chris Bradbrook stated, "We continue to be very encouraged by the results of the infill drilling program. As the year progresses we will continue the procedure of releasing results for individual sections as the drilling is completed. We are also very excited to be able to announce the commencement of the additional decline heading, to enable the excavation of the cross-cuts into the mineralization as this will provide the opportunity to directly access the New Afton Cu-Au discovery underground."

The information obtained from the exploration decline and the underground diamond drill program will be used in completion of a feasibility study, which will determine the capital requirements and potential economics of developing a new underground mine to extract this resource. The total planned budget for the decline, underground diamond drilling and feasibility study is $18 million over 18 months. Work commenced in November, 2004. The Company remains fully funded to complete this work which is under budget and ahead of schedule.

NATURE OF MINERALIZATION

The currently defined copper and gold resource was outlined by approximately 100 diamond drill holes completed from surface. Results for these holes are available in past press releases on the Company's website (www.newgoldinc.com). The outline of this mineralization is indicated on the attached plan view. This plan indicates that mineralization occurs over a strike length in excess of 800m.

The resource was independently calculated from a kriged block model as part of an independent advanced scoping study conducted by Behre Dolbear in 2003 and updated in 2004 under the supervision of qualified person James A. Currie, P.Eng.. At a cut-off of 0.70% Cu equivalent the Measured and Indicated Mineral Resource was calculated to be 68.7 Million Tonnes grading 1.68% Cu equivalent or 2.61 g/t Au equivalent (1.08% Cu, 0.85 g/t Au, 2.62 g/t Ag, 0.12 g/t Pd), which contains approximately 1.6 billion pounds of copper, and 1.9 million ounces of gold. The scoping study suggested that the project has very robust economics, with an after-tax IRR of 20% at metal prices of US$0.85 per lb copper, and US$375 per ounce gold.