New Gold Targets Over 40,000 Metres of Drilling at Blackwater Project in Second Half of 2011

Wednesday, Jun 15, 2011

New Gold Inc. ("New Gold") (TSX:NGD)(NYSE AMEX:NGD) today announces its plan for the continued exploration of the recently acquired Blackwater Project in central British Columbia. Following acquisition of the Blackwater Project on June 1, 2011, New Gold is now planning to significantly increase the exploration program at the project and is targeting 40,000 to 50,000 metres of drilling in the second half of 2011. New Gold is budgeting $20 million for this exploration program.

"We are very excited to embark on this significant drill program," stated Mark Petersen, Vice President, Exploration. "The holes drilled since the March 2011 resource estimate have shown good continuity and we look forward to building upon these successful results to grow the Blackwater resource."

The previous owner and operator of the project, Richfield Ventures Corp. ("Richfield") had targeted 30,000 metres of drilling for the full year 2011. From the beginning of 2011 through New Gold's acquisition of Richfield on June 1, 2011, approximately 20,000 metres of drilling had been completed. When combining the drilling completed prior to the transaction close with New Gold's targeted program for the second half of 2011, the total drilling on the project for the year should be over 60,000 metres, more than doubling Richfield's originally targeted program. Drilling in the second half of 2011 will target both the 100%-owned southern portion of the project and the 75%-owned northern portion, where Silver Quest Resources Ltd. ("Silver Quest") owns the remaining 25%. Pursuant to the joint venture agreement with Silver Quest, the portion of the revised drilling program on the northern portion of the property requires majority approval by the joint venture management committee, where New Gold holds 75% of the votes.

New Gold intends to provide periodic updates on the progress being made at Blackwater and is targeting an updated resource estimate in early 2012. The Blackwater Project's initial mineral resource estimate was completed in March 2011 and was based upon results from 77 holes totalling approximately 25,000 metres of drilling completed in 2009 and 2010.