Pursuant to the Arrangement, Silver Quest shareholders will receive 0.09 of a New Gold share and $0.0001 in cash for each Silver Quest share held and one common share in a new precious metals-focused exploration company, Independence Gold Corp. ("Independence Gold") (formerly referred to as McIntyre Minerals Inc.), for every three Silver Quest shares held.

Upon closing of the Arrangement, which is expected in December 2011, New Gold will acquire Silver Quest's 25% interest in the Davidson Property, which forms the northern half of the Blackwater Project and in which New Gold currently holds the remaining 75% interest, as well as Silver Quest's Capoose Property.

The terms of the Arrangement will be described in further detail in the Management Information Circular of Silver Quest to be filed with regulatory authorities and mailed to Silver Quest shareholders in accordance with applicable securities laws. The special meeting of Silver Quest shareholders to approve the Arrangement is expected to take place on December 15, 2011 (the "Meeting").

Directors and Officers of Silver Quest have entered into lock-up agreements with New Gold under which they have agreed to vote in favour of the Arrangement, their Silver Quest shares and options, which represent approximately 7.7% of Silver Quest's fully diluted shares outstanding.

As part of the Arrangement, New Gold will purchase, on a private placement basis, $3.5 million of Independence Gold shares, which will result in New Gold holding 9.9% of the shares outstanding of Independence Gold. Current Silver Quest shareholders will hold the remaining 90.1% upon completion of the Arrangement. Including the proceeds from the New Gold private placement, it is expected Independence Gold will have approximately $15 million in cash to fund an aggressive two year exploration program focused on the 3Ts Gold Project in central British Columbia and a number of Yukon exploration properties.

A Special Committee comprised of independent directors of Silver Quest, established to review the transaction, received a written opinion from Paradigm Capital Inc. The opinion stated that the consideration to be received by the Silver Quest securityholders under the terms of the transaction is fair, from a financial point of view, to the securityholders of Silver Quest. Silver Quest directors have determined that the transaction is in the best interest of Silver Quest and its securityholders and have unanimously approved the transaction. The directors intend to recommend, in the information circular for the Meeting, that Silver Quest shareholders vote in favour of the transaction. The Arrangement has been approved unanimously by the Board of Directors of both New Gold and Silver Quest and will be subject to, among other things, the Silver Quest shareholder, court and regulatory approval.

In the event that the Arrangement is not completed, Silver Quest has agreed, under certain circumstances, to pay New Gold a termination fee equal to $5 million. Silver Quest has also provided New Gold with certain other customary rights, including a right to match competing offers.

Silver Quest securityholders and other interested parties are advised to read the materials relating to the proposed Arrangement that will be filed by Silver Quest with securities regulatory authorities in Canada when they become available. Anyone may obtain copies of these documents when available free of charge at the Canadian Securities Administrators' website at www.sedar.com.

This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell the shares or a solicitation of a proxy.

New Gold's financial advisor is Canaccord Genuity Corp. and its legal advisor is Cassels Brock & Blackwell LLP. Silver Quest's financial advisor is Paradigm Capital Inc. and its legal advisor is Gowling Lafleur Henderson LLP. The legal advisor for the Special Committee of Silver Quest is DuMoulin Black LLP.

About New Gold Inc.

New Gold is an intermediate gold mining company. The company has a portfolio of three producing assets and three significant development projects. The Mesquite Mine in the United States, the Cerro San Pedro Mine in Mexico and Peak Gold Mines in Australia are expected to produce between 380,000 and 400,000 ounces of gold in 2011. The fully-funded New Afton project in Canada is scheduled to add further growth in 2012. In addition, New Gold owns 30% of the world-class El Morro project located in Chile and, in June 2011, New Gold acquired the exciting Blackwater project in Canada. For further information on the company, please visit www.newgold.com.

About Silver Quest Resources Ltd.

Silver Quest is a gold and silver exploration company, whose main areas of interest are central British Columbia and the White Gold District of the Yukon. Silver Quest maintains a portfolio of highly prospective projects, ranging from grassroots exploration through advanced stage resource expansion. The Company is poised to add shareholder value through project advancement, while evaluating early to advanced stage gold and silver projects for possible acquisition. For further information on the company, please visit www.silverquest.ca.

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