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| 1  | EXECUTIVE SUMMARY                               |
|----|-------------------------------------------------|
| 3  | FINANCIAL AND OPERATING HIGHLIGHTS              |
| 4  |                                            | Operating highlights |
| 5  |                                            | Development and exploration highlights |
| 5  |                                            | Financial highlights |
| 6  |                                            | Corporate developments |
| 7  | 2014 OUTLOOK                                    |
| 9  | BUSINESS OVERVIEW AND STRATEGY                  |
| 9  |                                            | New Gold’s business |
| 10 |                                            | New Gold’s strategy |
| 12 | KEY PERFORMANCE DRIVERS AND ECONOMIC OUTLOOK    |
| 12 |                                            | Key performance drivers |
| 13 |                                            | Economic outlook |
| 15 | CORPORATE SOCIAL RESPONSIBILITY                 |
| 16 | FINANCIAL AND OPERATING RESULTS                 |
| 16 |                                            | Summary of annual financial and operating results |
| 20 |                                            | Summary of quarterly financial and operating results |
| 26 |                                            | Review of operating mines |
| 37 | DEVELOPMENT AND EXPLORATION REVIEW              |
| 40 | MINERAL RESERVES AND RESOURCES UPDATE           |
| 42 | FINANCIAL CONDITION REVIEW                      |
| 42 |                                            | Balance sheet review |
| 44 |                                            | Liquidity and cash flow |
| 44 |                                            | Commitments |
| 44 |                                            | Contingencies |
| 45 |                                            | Contractual obligations |
| 45 |                                            | Related party transactions |
| 45 |                                            | Off-balance sheet arrangements |
| 45 |                                            | Outstanding shares |
| 45 | NON-GAAP FINANCIAL PERFORMANCE MEASURES         |
| 50 | ENTERPRISE RISK MANAGEMENT                      |
| 50 |                                            | General risks |
| 50 |                                            | Financial risk management |
| 54 | CRITICAL JUDGMENTS AND ESTIMATION UNCERTAINTIES |
| 57 | CONTROLS AND PROCEDURES                         |
| 58 | CAUTIONARY NOTES                                |

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| 1.   | We use certain non-GAAP financial performance measures throughout our MD&A. For a detailed description of each of the non-GAAP measures used in this MD&A and a detailed reconciliation, please refer to the “Non-GAAP Financial Performance Measures” section of this MD&A. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  Three months ended December 31                                     | Year Ended December31 |
|--------------------------------------------------------------------------|-----------------------|
| (in millions of U.S. dollars, except where noted)                        | 2013                  | 2012 | 2013 | 2012 | 2011 |
| Operating information:                                                   |                  |   |   |   |   |
| Gold (ounces):                                                           |                  |   |   |   |   |
|    Produced (1)                                           |  106,520         |  112,883 |  397,688 |  411,892 |     387,155 |
|    Sold (1)                                               |  104,523         |  109,766 |  391,823 |  395,535 | 391,890 |
| Silver (ounces):                                                         |                  |   |   |   |   |
|    Produced (1)                                           |  383,493         |  476,298 |  1,605,272 |  2,157,762 | 1,989,333 |
|    Sold (1)                                               |  378,852         |  489,264 |  1,572,265 |  2,081,964 | 2,007,801 |
| Copper (thousands of pounds):                                            |                  |   |   |   |   |
|    Produced (1)                                           |  24,032          |  20,920 |  85,398 |  42,820 | 12,715 |
|    Sold (1)                                               |  23,768          |  19,758 |  82,615 |  35,613 | 15,316 |
| Average realized price (2):                                              |                  |   |   |   |   |
|    Gold ($/ounce)                                         |  1,233           |  1,578 |  1,337 |  1,551 | 1,460 |
|    Silver ($/ounce)                                       |  20.10           |  32.36 |  23.16 |  30.87 | 35.15 |
|    Copper ($/pound)                                       |  3.24            |  3.52 |  3.24 |  3.56 | 3.78 |
| Total cash costs per gold ounce sold (2)(3)                              |  316             |  254 |  377 |  421 |            446 |
| All-in sustaining costs per gold ounce sold (2)(3)                       |  883             |  823 |  899 |  827 | 762 |
| Total cash costs per gold ounce sold on a co-product basis (2)(3)        | 658                   | 680 | 712 | 679 | 628 |
| All-in sustaining costs per gold ounce sold on a co-product basis (2)(3) | 1,000                 | 1,061 | 1,042 | 988 | 885 |
| Measured and Indicated Resources (4) as at December 31                   |                  |   |   |   |   |
|    Gold (thousands of ounces)                             | 27,505                | 21,403 | 27,505 | 21,403 | 18,797 |
|    Silver (thousands of ounces)                           | 124,499               | 131,847 | 124,499 |          131,847 | 115,268 |
|    Copper (millions of pounds)                            | 4,353                 | 4,061 | 4,353 | 4,061 | 3,946 |
|                                                                     |                  |   |   |   |   |
| Financial Information:                                                   |                  |   |   |   |   |
| Revenues                                                                 |  198.4           |  250.9 |  779.7 |  791.3 | 695.9 |
| Earnings from mine operations                                            |  24.0            |  99.2 |  166.8 |  330.6 |         315.2 |
| Net earnings (loss)                                                      |  (254.7)         |  123.9 |  (191.2) |  199.0 | 179.0 |
| Adjusted net earnings(2)                                                 |  16.7            |  49.7 |  61.3 |  183.5 | 187.8 |
| Net cash generated from operations                                       |  99.7            |  106.2 |  171.9 |  235.8 | 229.5 |
| Adjusted net cash generated from operations(2)                           | 93.2                  | 106.2 | 248.9 | 235.8 | 229.5 |
| Capital expenditures                                                     |  82.5            |  118.0 |  283.6 |  516.0 | 413.6 |
| Total assets                                                             |  4,199.0         | 4,283.7 |  4,199.0 | 4,283.7 | 3,368.7 |
| Cash and cash equivalents                                                |  414.4           | 687.8 |  414.4 | 687.8 | 309.4 |
| Long-term debt                                                           |  862.5           |           847.8 |  862.5 |           847.8 |         251.7 |
|                                                                     |                  |   |   |   |   |
| Share Data:                                                              |                  |   |   |   |   |
| Earnings (loss) per share:                                               |                  |   |   |   |   |
|    Basic                                                  |  (0.51)          |  0.26 |  (0.39) |  0.43 | 0.42 |
|    Diluted                                                |  (0.51)          |  0.26 |  (0.39) |  0.42 | 0.40 |
| Adjusted net earnings per basic share (2)                                |  0.04            |  0.11 |  0.13 |  0.40 | 0.44 |
| Share price as at December 31 (TSX – Canadian dollars)             | 5.56                  | 11.01 | 5.56 | 11.01 |         10.28 |
| Weighted average outstanding shares (basic) (millions)                   |  503             |  468 |  488 |  463 |             430 |
|                                                                     |                  |   |   |   |   |

|   | 1. | Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | We use certain non-GAAP financial performance measures throughout our MD&A. Total cash costs and all-in sustaining costs per gold ounce sold, total cash costs and all-in sustaining costs on a co-product basis, average realized price, operating margin, adjusted net earnings, adjusted net earnings per share, adjusted net cash generated from operations and cash generated from operations, excluding working capital changes and income taxes paid, are non-GAAP financial performance measures with no standard meaning under IFRS. For further information and a detailed reconciliation, please refer to the “Non-GAAP Financial Performance Measures” section of this MD&A. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | The calculation of total cash costs and all-in sustaining costs per gold ounce sold is net of by-product silver and copper revenues. Total cash costs and all-in sustaining costs on a co-product basis removes the impact of other metal sales that are produced as a by-product of our gold production and apportions the cash costs to each metal produced on a percentage of revenue basis. If silver and copper revenues were treated as co-products, co-product total cash costs for the fourth quarter of 2013 would be $8.67 per ounce of silver (2012 - $11.82) and $1.88 per pound of copper (2012 - $1.62). For the year ended December 31, 2013, co-product cash costs would be $10.24 per ounce of silver (2012 - $12.43); and $1.86 per pound of copper (2012 - $1.72). The 2012 comparative figures for silver have been adjusted to include silver at Peak Mines and New Afton. Co-product all-in sustaining costs for the fourth quarter of 2013 would be $13.22 per ounce of silver (2012 - $18.68) and $2.78 per pound of copper (2012 - $2.47). For the year ended December 31, 2013, co-product all-in sustaining costs would be $15.09 per ounce of silver (2012 - $18.16); and $2.66 per pound of copper (2012 - $2.43).  |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Calculated in accordance with CIM standards as required under National Instrument 43-101. For a breakdown of Reserves and Resources by category and additional information relating to Reserves and Resources and related key assumptions and parameters, see our Mineral Reserve and Resource Statement in our news release “New Gold Finishes 2013 with Lowest Costs in its History, Increases Gold Reserves by 127 Percent per Share and Provides 2014 Guidance with Even Lower Costs”, dated February 6, 2014 and filed on www.sedar.com. The scientific and technical information in this MD&A has been reviewed and approved by Mark Petersen, Qualified Person under National Instrument 43-101 and an officer of the Company. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|            | GoldProduction        | CopperProduction     | SilverProduction      | Totalcash costs                                                                                                                                                                                                                                                                                                                          | All-inSustaining costs |
|-----------------|-----------------------|----------------------|-----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
|            | (thousands of ounces) | (millions of pounds) | (thousands of ounces) |                 (per ounce)                                   (per ounce) |
| New Afton       | 102 - 112             | 78 - 84              | 200 - 300             | ($1,260) – ($1,240)                                                                                                                                                                                                                                                                                                                | ($620) - ($600)        |
| Mesquite        | 113 - 123             | -                    | -                     | $930 - $950                                                                                                                                                                                                                                                                                                                              | $1,310 - $1,330        |
| Peak Mines      | 95 - 105              | 14 - 16              | 50 - 150              | $630 - $650                                                                                                                                                                                                                                                                                                                              | $1,065 - $1,085        |
| Cerro San Pedro | 70 - 80               | -                    | 1,100 - 1,300         | $1,030 - $1,050                                                                                                                                                                                                                                                                                                                          | $1,125 - $1,145        |
| Total           | 380 - 420             | 92 - 100             | 1,350 - 1,750         | $320 - $340                                                                                                                                                                                                                                                                                                                              | $815 - $835            |

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| NEW GOLD’S BUSINESS New Gold is an intermediate gold producer with a portfolio of assets in Canada, the United States, Australia, Mexico and Chile. The Company’s operating assets consist of the New Afton gold-copper mine in Canada, the Mesquite gold mine in the United States, the Peak gold-copper mines in Australia and the Cerro San Pedro gold-silver mine in Mexico. Significant exploration and development projects include the Rainy River and Blackwater projects in Canada and the Company’s 30% interest in the El Morro project in Chile. New Gold has an objective of continuing to grow, both organically and through value-enhancing accretive acquisitions, to further establish itself as an industry leading intermediate gold producer. New Gold’s operating portfolio is diverse both geographically and in the range of commodities that its operations produce.  The group of assets continue to produce gold, silver and copper at cash costs and all-in sustaining costs well below the industry average. The portfolio of mining assets provides the Company with strong operating cash flow for internally funding continuing exploration and development projects. |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

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| 1. | Represents New Gold’s attributable share of Reserves and Resources. |
|----|---------------------------------------------------------------------------|

| 2 | Proven and Probable Reserves and Measured, Indicated and Inferred Resources above are calculated as at December 31, 2013 in accordance with CIM standards as required under National Instrument 43-101. For a breakdown of Reserves and Resources by category and additional information relating to Reserves and Resources and related key assumptions and parameters, see our Mineral Reserve and Resource Statement in our news release “New Gold Finishes 2013 with Lowest Costs in its History, Increases Gold Reserves by 127 Percent per Share and Provides 2014 Guidance with Even Lower Costs”, dated February 6, 2014 and filed on www.sedar.com. The scientific and technical information in this MD&A has been reviewed and approved by Mark Petersen, a Qualified Person under National Instrument 43-101 and an officer of the Company. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Measured and Indicated Resources are shown inclusive of Proven and Probable Reserves. |
|---|---------------------------------------------------------------------------------------|

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|  Operational execution |  New Gold ended 2013 with revenue of $779.7 million and adjusted net cash flow from continuing operations of $248.9 million. In the third quarter of 2013, New Gold provided an updated guidance and expected to produce between 390,000 and 400,000 gold ounces at total cash costs of $375 per ounce and all-in sustaining costs of $900 per ounce. After facing operational challenges, New Gold met its updated production guidance and delivered on key milestones in 2013 including the completion of the Blackwater Feasibility Study and exceeding mill throughput of over 12,000 tonnes per day at New Afton.  |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our objective is to maintain a strong balance sheet and sufficient financial flexibility to internally fund our three development projects. As at December 31, 2013, New Gold had $414.4 million in cash and cash equivalents. With our current cash balanceand our ability to generate cash flow from our four operations, we believe we are well positioned to fund the development of the Rainy River project. |     |    Maintaining a strong financial position   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|------------------------------------------------------------------|

|   Enhancing value |  New Gold has an established track record of enhancing the value of its portfolio of assets. This has been a particular focus since mid-2009 when New Gold and Western Goldfields Inc. combined to create a fully funded, growth-oriented company. New Gold continues to look for opportunities to increase the value of each of its operations organically, in particular, the potential mill expansion and development of the C-zone at New Afton.  |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  Since the middle of 2008, New Gold has grown through the combination of largely single asset companies. In each instance, the addition of a new company or asset has further strengthened New Gold. In 2013, New Gold completed the acquisition of Rainy River, a company whose principle asset is a gold project located in Ontario. The project adds 3.8 million gold ounces of Proven and Probable Reserves to New Gold’s portfolio, and based on the updated Feasibility Study, the project is expected to produce approximately 325,000 ounces of gold annually at well below industry average cash costs. The experience of our management team and board of directors has allowed the Company to be opportunistic in its corporate development initiatives, positioning the Company as an industry leader.  |     |    Disciplined growth   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|---------------------------------------------|

| Experienced management team with a proven industry track record |  We have a seasoned and experienced management team with extensive mining sector knowledge and a successful track record of identifying and developing mines. Our Executive Chairman, Randall Oliphant, Chief Executive Officer, Robert Gallagher, and Chief Financial Officer, Brian Penny all have significant experience in leading successful mining companies. Our Board of Directors provide further stewardship and includes individuals with a breadth of knowledge across the mining sector that provides New Gold with a distinct competitive advantage.  |
|-----------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  We have a portfolio of mines that have historically consistently met or exceeded Company guidance. The year 2013 was a challenging year as gold prices decreased and New Gold experienced operational issues at two mines. In the third quarter of 2013, New Gold provided an updated guidance and expected to produce between 390,000 and 400,000 gold ounces at total cash costs of $375 per ounce and all-in sustaining costs of $900 per ounce compared to a previous guidance of 440,000 to 480,000 gold ounces at total cash costs of $350 per ounce and all-in sustaining costs of $875 per ounce. Despite the operational challenges, New Gold was able to meet its updated guidance by producing 397,688 ounces of gold at all-in sustaining cash costs of $899per ounce sold. New Gold also delivered on key milestones in 2013 which included: the completion of the Blackwater Feasibility Study and achieving 12,000 tonnes per day throughput rate at New Afton, three months ahead of schedule. 2014 guidance has been established at 380,000 to 420,000 ounces of gold at total cash costs of $320 to $340 per ounce. New Gold’s cash costs continue to be well below the industry average.  |     | Leading mid-tier producer with track record of delivering on expectations |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|---------------------------------------------------------------------------|

| Geographically diverse operations in favourable jurisdictions |  We have a diverse portfolio of assets in Canada, the United States, Australia, Mexico and Chile. The Company’s operating assets consist of the New Afton Mine in Canada, the Mesquite Mine in the United States, the Peak Mines in Australia and the Cerro San Pedro Mine in Mexico. Significant development projects include the Rainy River and Blackwater projects in Canada and the Company’s 30% interest in the El Morro project in Chile. The countries in which we operate have been assigned investment grade sovereign credit ratings by Moody’s Investors Service, Inc., Fitch Ratings Inc. and Standard & Poor’s Ratings Services. These same countries are ranked in the top six of 25 mining countries to invest in, as evaluated in the 2013 Behre Dolbear Report “2013 Ranking of Countries for Mining Investment: Where not to Invest”. In 2013, 22% of our gold revenue was generated from Canada, 27% from the United States, 25% from Australia and 26% from Mexico.  |
|---------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  In addition to our operating mines, we have development potential that should significantly enhance our production base and growth profile. As at December 31, 2013, Rainy River contains Proven and Probable Reserves of 3.8 million ounces of gold and Measured and Indicated Resources of 6.2 million ounces of gold and is expected to produce 325,000 ounces of gold per year at below industry average cash costs during the first nine years of its production. Blackwater contains Proven and Probable Reserves of 8.2 million ounces of gold and Measured and Indicated Resources of 9.5 million ounces of gold and is expected to produce 485,000 ounces of gold per year at below industry average cash costs during the first nine years of its production. El Morro provides New Gold with 2.7 million ounces of Proven and Probable gold Reserves and 2.0 billion pounds of Proven and Probable copper Reserves. The capital cost for El Morro is fully funded by our 70% partner, Goldcorp. Once in production, our 30% share of production is expected to be approximately 90,000 ounces of gold and 85 million pounds of copper per year.  |   | Pipeline of world-class development projects |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|

|  Strong financial performance with a solid balance sheet  |   For the year ended December 31, 2013, New Gold generated revenue of $779.7 million and adjusted net cash flow from operations of $248.9 million. Cash and cash equivalents totalled $414.4 million with additional financial flexibility from the $100 million undrawn component of our credit facility at December 31, 2013. The Company has long-term debt outstanding of $862.5 million with the full $800 million of Senior Unsecured Notes due on or after 2020. |
|---------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  We understand that our success is linked to our ability to operate in a socially responsible manner. New Gold is committed to promoting and protecting the welfare of our employees through safety-first work practices and workplaces, staff training, and equitable hiring and development practices. We understand that sustainable development extends from environmental stewardship to the development of economic prosperity and the support of local communities and their cultural values. We strive to share the benefits of our activities through the entire life cycle of our mines, and long after their eventual closure. |   |  Commitment to corporate social responsibility |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|

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| KEY PERFORMANCE DRIVERS  There is a range of key performance drivers that are critical to the successful implementation of New Gold’s strategy and the achievement of its goals. The key internal drivers are production volumes and costs. The key external drivers are spot prices of gold, copper and silver, as well as foreign exchange rates.  Production Volumes and Costs  New Gold’s portfolio of operating mines produced 106,520 ounces of gold in the fourth quarter of 2013, providing a total of 397,688 ounces of gold for the full year.  Full year 2013 total cash costs and all-in sustaining costs, net of by-product sales, were $377 and $899per gold ounce sold. Total cash costs and all-in sustaining costs for the fourth quarter, net of by-product sales, were $316 and $883 per gold ounce sold, respectively.  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

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|  Environmental Highlights of 2013  |                                                                                                                                                                                    |  Community Highlights of 2013 |
|----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|
| ·                                       | The New Gold Environmental Management Standards were developed.                                                                                                                         |                               | · | The New Gold Community Engagement and Development Management Standards were developed. |
| ·                                       | This was the first year New Gold reported to the Carbon Disclosure Project.                                                                                                             |                               | · | New Gold joined the Devonshire Initiative for Business and Social Responsibility |
| ·                                       | New Afton Mine won the Green Award from the Kamloops Business Excellence Awards, reported to the MAC’s Towards Sustainable Mining Protocols and received ISO 14001 Certification. |                               | · | At Cerro San Pedro, several socio-economic studies were completed, including socio-economic baseline, the economic impact and tourism and business development potential assessments. |
| ·                                       | Cerro San Pedro Mine achieved substantial compliance with the International Cyanide Management Code.                                                                                    |                               | · | Cerro San Pedro was accredited, for the fourth consecutive time, as a Socially Responsible Company by the Mexican Centre for Philanthropy (SEMEFI). |
|                                         |                                                                                                                                                                                    |                               | · | The World Gold Council Conflict Free Gold Standard was implemented across New Gold’s operations.  |

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| (in millions of U.S. dollars, except per share amounts and where noted) | Q4 2013       | Q3 2013      | Q2 2013      | Q1 2013      | Q4 2012       | Q3 2012      | Q2 2012      | Q1 2012      | Q4 2011      |
|-------------------------------------------------------------------------|---------------|--------------|--------------|--------------|---------------|--------------|--------------|--------------|--------------|
| Gold sales (ounces)                                                     |  104,523 |  94,082 |  98,037 |  95,181 |  109,766 |  95,166 |  96,928 |  93,676 |  99,612 |
|                                                                    |          |         |         |         |          |         |         |         |         |
| Revenues                                                                |  198.4   |  196.0  |  183.5  |  201.8  |  250.9   |  195.5  |  176.1  |  168.8  |  177.6  |
|                                                                    |          |         |         |         |          |         |         |         |         |
| Net earnings (loss)                                                     |  (254.7) |  12.2   |  15.0   |  36.3   |  123.9   |  17.8   |  23.7   |  33.5   |  35.0   |
| Per share:                                                              |          |         |         |         |          |         |         |         |         |
|    Basic                                                 |  (0.51)  |  0.02   |  0.03   |  0.08   |  0.26    |  0.04   |  0.05   |  0.07   |  0.08   |
|    Diluted                                               |  (0.51)  |  0.02   |  0.03   |  0.08   |  0.26    |  0.03   |  0.05   |  0.07   |  0.07   |
|                                                                    |          |         |         |         |          |         |         |         |         |
| Adjusted net earnings                                                   |  16.7    |  20.0   |  4.3    |  20.6   |  49.7    |  42.6   |  45.8   |  44.2   |  42.2   |
| Per share:                                                              |          |         |         |         |          |         |         |         |         |
|    Basic                                                 |  0.04    |  0.04   |  0.01   |  0.04   |  0.11    |  0.09   |  0.10   |  0.10   |  0.09   |
|    Diluted                                               |  0.03    |  0.04   |  0.01   |  0.04   |  0.11    |  0.09   |  0.10   |  0.09   |  0.09   |

|                                              |                              Year ended December 31 |
|---------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (in millions of U.S. dollars, except where noted) | Cerro San Pedro                                                                                                                                                                                      | Peak Mines | Total |
| Within income from operations:                    |                                                                                                                                                                                                 |   |   |
| Cerro San Pedro plant and equipment               | 3.5                                                                                                                                                                                                  |   | 3.5 |
| Cerro San Pedro depletable mining interest        | 191.9                                                                                                                                                                                                | - | 191.9 |
| Cerro San Pedro non-depletable mining interest    | 70.7                                                                                                                                                                                                 | - | 70.7 |
| Peak Mines depletable mining interest             | -                                                                                                                                                                                                    | 6.4 | 6.4 |
| Total before tax                                  | 266.1                                                                                                                                                                                                | 6.4 | 272.5 |
| Tax recovery                                      | (64.2)                                                                                                                                                                                               | (2.0) | (66.2) |
| Total after tax                                   | 201.9                                                                                                                                                                                                | 4.4 | 206.3 |

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|                                             |             |           |
|--------------------------------------------------|------------------|----------------|
| (in  U.S. dollars, except where noted) | 2014-2018average | Long term |
|                                             |             |           |
| Gold price (per ounce)                           | 1,350            | 1,300          |
| Silver price (per ounce)                         | 22.50            | 22.00          |
| Copper price (per pound)                         | 3.16             | 3.00           |
|                                             |             |           |
| Exchange rates:                                  |             |           |
| CAD:USD                                          | 0.92             | 0.91           |
| AUD:USD                                          | 0.87             | 0.88           |
| MSX:USD                                          | 12.33            | 12.62          |

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|                                 Year ended December 31 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (in millions of U.S. dollars, except where noted)                                                                                                                                                                      |   |
|                                                                                                                                                                                                                   |   |
| $100  per ounce change in gold price                                                                                                                                                                         | 15.8 |
| 0.5% change in discount rate                                                                                                                                                                                           | 1.0 |
| 5% change in exchange rate                                                                                                                                                                                             | 7.3 |
| 5% change in operating costs                                                                                                                                                                                           | 12.3 |

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|  NEW AFTON MINE, BRITISH COLUMBIA, CANADA  |
|------------------------------------------------------|
|                                                 |

| The New Afton gold-copper Mine is located in Kamloops, British Columbia, Canada.  The mine is a large underground gold-copper deposit. New Afton’s property package consists of the nine square kilometre Afton mining lease which centers on the New Afton gold-copper mine as well as 115 square kilometres of exploration licenses covering multiple mineral prospects within the historic Iron Mask mining district. At December 31, 2013, the mine had 0.9 million ounces of Proven and Probable gold Reserves and 904 million pounds of Proven and Probable copper Reserves, with 2.3 million ounces of Measured and Indicated gold Resources, inclusive of Reserves, and 1.99 billion pounds of Measured and Indicated copper Resources, inclusive of Reserves. |   | AT-A-GLANCE |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|
| 2013 Production:GOLD: 87,177 OUNCESCOPPER: 72 MILLION POUNDSTOTAL CASH COSTS/oz: ($1,196)ALL-IN SUSTAINING COSTS/oz: ($133)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| 2014 Production Targets:GOLD: 102,000 TO 112,000 OUNCESCOPPER: 78 TO 84 MILLION POUNDSTOTAL CASH COSTS/oz: ($1,260) to ($1,240)ALL-IN SUSTAINING COSTS/oz: ($620) to ($600)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |

| Three months ended December 31                           | Year ended December 31 |
|----------------------------------------------------------|------------------------|
| (in millions of U.S. dollars, except where noted)        | 2013                   | 2012 | 2013 | 2012 | 2011 |
| Operating information(1):                                |                   |   |   |   |   |
| Ore mined (thousands of tonnes)                          |  1,139            |  532 |  4,078 |  813 | - |
| Ore processed (thousands of tonnes)                      |  1,146            |  1,077 |  4,087 |  1,970 | - |
| Average grade:                                           |                   |   |   |   |   |
|    Gold (grams/tonne)                     |  0.81             |  0.77 |  0.78 |  0.73 | - |
|    Copper (%)                             |  0.95             |  0.84 |  0.93 |  0.79 | - |
| Recovery rate (%):                                       |                   |   |   |   |   |
|    Gold                                   |  84.4             |  83.9 |  85.1 |  80.1 | - |
|    Copper                                 |  85.3             |  84.9 |  85.9 |  83.5 | - |
| Gold (ounces)                                            |                   |   |   |   |   |
|    Produced (2)                           |  25,211           |  22,793 |  87,177 |  36,807 | - |
|    Sold (2)                               |  24,176           |  23,126 |  85,030 |  29,735 | - |
| Copper (thousands of pounds)                             |                   |   |   |   |   |
|    Produced (2)                           |  20,536           |  17,335 |  71,972 |  28,459 | - |
|    Sold (2)                               |  20,180           |  16,781 |  69,263 |  22,623 | - |
| Silver (ounces)                                          |                   |   |   |   |   |
|    Produced (2)                           |  54,846           |  43,101 |  192,498 |  82,450 | - |
|    Sold (2)                               |  52,546           |  42,876 |  178,841 |  57,204 | - |
| Average realized price (3):                              |                   |   |   |   |   |
|    Gold ($/ounce)                         |  1,168            |  1,653 |  1,314 |  1,681 | - |
|    Copper ($/pound)                       |  3.23             |  3.53 |  3.23 |  3.58 | - |
|    Silver ($/ounce)                       |  19.35            |  32.98 |  20.91 |  33.04 | - |
| Total cash costs per gold ounce sold (3)(4)              |  (1,428)          |  (1,067) |  (1,196) |  (1,043) | - |
| All-in sustaining costs per gold ounce sold (3)          |  12               |  168 |  (133) |  358 | - |
| Total cash costs  on a co-product basis (3)(4) |                   |   |   |   |   |
|    Gold ($/ounce sold)                    | 391                    | 601 | 486 | 656 | - |
|    Copper ($/pound sold)                  | 1.08                   | 1.28 | 1.19 | 1.40 | - |
| All-in sustaining costs on a co-product basis (3)(4)     |                   |   |   |   |   |
|    Gold ($/ounce sold)                    | 822                    | 1,079 | 837 | 1,183 | - |
|    Copper ($/pound sold)                  | 2.27                   | 2.30 | 2.05 | 2.52 | - |
|                                                     |                   |   |   |   |   |
| Financial Information (1):                               |                   |   |   |   |   |
| Revenues                                                 |  88.3             |  95.3 |  318.7 |  127.3 | - |
| Earnings from mine operations                            |  35.9             |  37.6 |  119.3 |  46.0 | - |
| Capital expenditures(5)                                  |  35.0             |  48.6 |  122.2 |  302.0 | 290.6 |

| 1. | Comparatives for 2012 reflect New Afton reaching commercial production on July 31, 2012. |
|----|------------------------------------------------------------------------------------------|
| 2. | Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3. | We use certain non-GAAP financial performance measures throughout our MD&A. Total cash costs and all-in sustaining costs per gold ounce sold, total cash costs and all-in sustaining costs on a co-product basis, average realized price, adjusted net earnings, adjusted net earnings per share, adjusted net cash generated from operations and cash generated from operations, excluding working capital changes and income taxes paid are non-GAAP financial performance measures with no standard meaning under IFRS. For further information and a detailed reconciliation, please refer to the “Non-GAAP Financial Performance Measures” section of this MD&A. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4. | The calculation of total cash costs per ounce of gold is net of by-product copper revenue while total cash costs and all-in sustaining costs on a co-product basis removes the impact of other metal sales that are produced as a by-product of our gold production and apportions the cash costs to each metal produced on a percentage of revenue basis. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Net of proceeds received from sale of pre-commercial production inventory of $14.5 million for the full year 2012 and $6.9 million for the fourth quarter of 2012. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   MESQUITE MINE, CALIFORNIA, USA  |
|---------------------------------------------|
|                                        |

| The Company’s Mesquite mine is located in Imperial County, California, approximately 70 kilometres northwest of Yuma, Arizona and 230 kilometres east of San Diego, California. It is an open pit, run-of-mine heap leach operation. The mine was operated between 1985 and 2001 by Goldfields Mining Corporation, subsequently Santa Fe Minerals Corporation, and finally Newmont Mining Corporation with Western Goldfields Inc. acquiring the mine in 2003. New Gold acquired Mesquite as part of the business combination with Western Goldfields in mid-2009. The mine resumed production in 2008. At December 31, 2013, the mine had 2.2 million ounces of Proven and Probable gold Reserves and 4.9 million ounces of Measured and Indicated gold Resources, inclusive of Reserves. |   | AT-A-GLANCE |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|
| 2013 Production:GOLD: 107,016 OUNCESTOTAL CASH COSTS/oz: $907ALL-IN SUSTAINING COSTS/oz: $1,108                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| 2014 Production Targets:GOLD: 113,000 TO 123,000 OUNCESTOTAL CASH COSTS/oz: $930 to $950ALL-IN SUSTAINING COSTS/oz: $1,310 to $1,330                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |

| Three months ended December 31                    | Year ended December 31 |
|---------------------------------------------------|------------------------|
| (in millions of U.S. dollars, except where noted) | 2013                   | 2012 | 2013 | 2012 | 2011 |
| Operating information:                            |                   |   |   |   |   |
| Ore mined (thousands of tonnes)                   |  5,233            |  3,221 |  14,297 |  14,503 | 11,733 |
| Waste mined (thousands of tonnes)                 |  5,459            |  8,075 |  33,909 |  31,164 | 34,240 |
| Ratio of waste to ore                             |  1.04             |  2.51 |  2.37 |  2.15 | 2.92 |
| Ore to leach pad (thousands of tonnes)            |  5,233            |  3,221 |  14,297 |  14,503 | 11,733 |
| Average grade:                                    |                   |   |   |   |   |
|    Gold (grams/tonne)              |  0.42             |  0.40 |  0.37 |  0.46 | 0.57 |
| Gold (ounces)                                     |                   |   |   |   |   |
|    Produced (1) (2)                |  34,893           |  29,162 |  107,016 |  142,008 | 158,004 |
|    Sold (1)                        |  32,239           |  29,708 |  104,794 |  142,491 | 161,214 |
| Average realized price (4):                       |                   |   |   |   |   |
|    Gold ($/ounce)                  |  1,251            |  1,287 |  1,263 |  1,338 | 1,297 |
| Total cash costs per gold ounce sold (3)          |  841              |  787 |  907 |  690 | 645 |
| All-in sustaining costs per gold ounce sold (3)   |  988              |  920 |  1,108 |  768 | 762 |
|                                              |                   |   |   |   |   |
| Financial Information:                            |                   |   |   |   |   |
| Revenues                                          |  33.4             |  38.3 |  113.7 |  190.7 | 209.1 |
| Earnings (loss) from mine operations              |  (2.0)            |  9.3 |  (5.8) |  67.6 | 79.7 |
| Capital expenditures                              |  2.1              |  4.1 |  17.4 |  10.9 | 18.5 |

| 1. | Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory, where applicable. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Tonnes of ore processed each period does not necessarily correspond to ounces produced during the period, as there is a time delay between placing tonnes on the leach pad and pouring ounces of gold. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3. | We use certain non-GAAP financial performance measures throughout our MD&A. Total cash costs and all-in sustaining costs per gold ounce sold, total cash costs and all-in sustaining costs on a co-product basis, average realized price, operating margin, adjusted net earnings, adjusted net earnings per share, adjusted net cash generated from operations and cash generated from operations, excluding working capital changes and income taxes paid, are non-GAAP financial performance measures with no standard meaning under IFRS. For further information and a detailed reconciliation, please refer to the “Non-GAAP Financial Performance Measures” section of this MD&A. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | Average realized price per gold ounce for Mesquite includes realized gains and losses from gold hedge settlements but excludes the revenue reduction related to the hedge OCI reclassification.  |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  PEAK MINES, NEW SOUTH WALES, AUSTRALIA  |
|----------------------------------------------------|
|                                               |

| The Company’s Peak Mines gold-copper mining operation is an underground mine/mill operation located in the Cobar Mineral Field near Cobar, New South Wales, Australia. Peak Mines was originally built by Rio Tinto Plc and commenced production in 1992. At December 31, 2013, the mine had 0.4 million ounces of Proven and Probable gold Reserves and 98 million pounds of Proven and Probable copper Reserves, with 0.8 million ounces of Measured and Indicated gold Resources, inclusive of Reserves, and 158 million pounds of Measured and Indicated copper Resources, inclusive of Reserves. |   | AT-A-GLANCE |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|
| 2013 Production:GOLD: 100,700 OUNCESCOPPER: 13.4 MILLION POUNDSTOTAL CASH COSTS/oz: $850ALL-IN SUSTAINING COSTS/oz: $1,331                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| 2014 Production Targets:GOLD: 95,000 TO 105,000 OUNCESCOPPER: 14 TO 16 MILLION POUNDSTOTAL CASH COSTS/oz: $630 to $650ALL-IN SUSTAINING COSTS/oz: $1,065 to $1,085                                                                                                                                                                                                                                                                                                                                                                                                                                          |

| Three months ended December 31                    | Year ended December 31 |
|---------------------------------------------------|------------------------|
| (in millions of U.S. dollars, except where noted) | 2013                   | 2012 | 2013 | 2012 | 2011 |
| Operating information:                            |                   |   |   |   |   |
| Ore mined (thousands of tonnes)                   |  190              |  205 |  768 |  786 | 755 |
| Ore processed (thousands of tonnes)               |  201              |  209 |  814 |  778 | 783 |
| Average grade:                                    |                   |   |   |   |   |
|    Gold (grams/tonne)              |  4.00             |  4.59 |  4.14 |  4.18 | 3.94 |
|    Copper (%)                      |  0.88             |  0.85 |  0.85 |  0.97 | 0.93 |
| Recovery rate (%):                                |                   |   |   |   |   |
|    Gold                            |  93.6             |  93.3 |  92.9 |  91.3 | 88.8 |
|    Copper                          |  89.6             |  91.5 |  88.0 |  86.0 | 82.0 |
| Gold (ounces)                                     |                   |   |   |   |   |
|    Produced (1)                    |  24,237           |  28,785 |  100,700 |  95,522 | 85,404 |
|    Sold (1)                        |  25,323           |  25,739 |  102,811 |  89,269 | 87,691 |
| Copper (thousands of pounds)                      |                   |   |   |   |   |
|    Produced (1)                    |  3,496            |  3,585 |  13,426 |  14,361 | 12,715 |
|    Sold (1)                        |  3,588            |  2,977 |  13,352 |  12,990 | 15,316 |
| Silver (ounces)                                   |                   |   |   |   |   |
|    Produced (1)                    |  31,157           |  31,921 |  112,215 |  136,806 | 109,814 |
|    Sold (1)                        |  32,386           |  26,390 |  102,345 |  98,623 | 120,680 |
| Average realized price (2):                       |                   |   |   |   |   |
|    Gold ($/ounce)                  |  1,251            |  1,687 |  1,370 |  1,677 | 1,591 |
|    Copper ($/pound)                |  3.28             |  3.47 |  3.29 |  3.51 | 3.78 |
|    Silver ($/ounce)                |  19.65            |  29.62 |  21.36 |  31.30 | 34.17 |
| Total cash costs per gold ounce sold (2)(3)       |  778              |  743 |  850 |  764 | 618 |
| All-in sustaining costs per gold ounce sold (2)   |  1,106            |  1,309 |  1,331 |  1,360 | 1,249 |
|                                              |                   |   |   |   |   |
| Financial Information:                            |                   |   |   |   |   |
| Revenues                                          |  42.1             |  50.4 |  177.7 |  191.1 | 192.6 |
| Earnings from mine operations                     |  (0.5)            |  16.6 |  18.9 |  58.8 | 62.8 |
| Capital expenditures                              |  7.8              |  13.1 |  43.0 |  46.8 | 50.3 |

| 1. | Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | We use certain non-GAAP financial performance measures throughout our MD&A. Total cash costs and all-in sustaining costs per gold ounce sold, total cash costs and all-in sustaining costs on a co-product basis, average realized price, adjusted net earnings, adjusted net earnings per share, adjusted net cash generated from operations and cash generated from operations, excluding working capital changes and income taxes paid are non-GAAP financial performance measures with no standard meaning under IFRS. For further information and a detailed reconciliation, please refer to the “Non-GAAP Financial Performance Measures” section of this MD&A. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | The calculation of total cash costs per ounce of gold is net of by-product copper revenue. Total cash costs and all-in sustaining costs on a co-product basis removes the impact of other metal sales that are produced as a by-product of our gold production and apportions the cash costs to each metal produced on a percentage of revenue basis. If copper revenues were treated as a co-product, the average total cash costs at Peak Mines for the fourth quarter of 2013 would be $886 per ounce of gold (2012 - $906) and $2.56 per pound of copper (2012 - $2.16). For the year ended December 31, 2013, the total cash costs on a co-product basis would be $958 per ounce of gold (2012 - $967) and $2.50 per pound of copper (2012 - $2.21). All-in sustaining costs on a co-product basis for the fourth quarter of 2013 would be $1,122 per ounce of gold (2012 - $1,357) and $3.18 per pound of copper (2012 - $3.09). For the year ended December 31, 2013 the all-in sustaining costs on a co-product basis would be $1,321 per ounce of gold (2012 - $1,416) and $3.37 per pound of copper (2012 - $3.15).  |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   CERRO SAN PEDRO MINE, SAN LUIS POTOSÍ, MEXICO  |
|-----------------------------------------------------------------|
|                                                            |

| The Cerro San Pedro mine is located in the state of San Luis Potosí in central Mexico, approximately 20 kilometres east of the city of San Luis Potosí. The mine is a gold-silver, open pit, run-of-mine heap leach operation. At December 31, 2013, the mine had 0.4 million ounces of Proven and Probable gold Reserves and 15.6 million ounces of Proven and Probable silver Reserves, with 0.4 million ounces of Measured and Indicated gold Resources, inclusive of Reserves, and 15.9 million ounces of Measured and Indicated silver Resources, inclusive of Reserves.Cerro San Pedro achieved ISO 14001 certification of its environmental management system and has a record of compliance with Mexican and international environmental standards. |   | AT-A-GLANCE |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|
| 2013 Production:GOLD: 102,795 OUNCESSILVER: 1.3 MILLION OUNCESTOTAL CASH COSTS/oz: $676ALL-IN SUSTAINING COSTS/oz: $766                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| 2014 Production Targets:GOLD: 70,000 TO 80,000 OUNCESSILVER: 1.1 TO 1.3 MILLION OUNCESTOTAL CASH COSTS/oz: $1,030 to $1,050ALL-IN SUSTAINING COSTS/oz: $1,125 to $1,145                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

| Three months ended December 31                    | Year ended December 31 |
|---------------------------------------------------|------------------------|
| (in millions of U.S. dollars, except where noted) | 2013                   | 2012 | 2013 | 2012 | 2011 |
| Operating information:                            |                   |   |   |   |   |
| Ore mined (thousands of tonnes)                   |  2,877            |  4,889 |  13,463 |  16,531 | 16,763 |
| Waste mined (thousands of tonnes)                 |  5,588            |  2,244 |  17,556 |  14,374 | 16,513 |
| Ratio of waste to ore                             |  1.94             |  0.46 |  1.30 |  0.87 | 0.99 |
| Ore to leach pad (thousands of tonnes)            |  2,877            |  4,889 |  13,463 |  16,531 | 16,763 |
| Average grade:                                    |                   |   |   |   |   |
|    Gold (grams/tonne)              |  0.32             |  0.37 |  0.47 |  0.47 | 0.48 |
|    Silver (grams/tonne)            |  10.80            |  12.82 |  20.91 |  21.43 | 24.24 |
| Gold (ounces)                                     |                   |   |   |   |   |
|    Produced (1)(2)                 |  22,179           |  32,143 |  102,795 |  137,555 | 143,747 |
|    Sold (1)                        |  22,785           |  31,193 |  99,188 |  134,040 | 142,985 |
| Silver (ounces)                                   |                   |   |   |   |   |
|    Produced (1)(2)                 |  297,490          |  401,276 |  1,300,559 |  1,938,506 | 1,989,333 |
|    Sold (1)                        |  293,920          |  419,998 |  1,291,079 |  1,926,137 | 2,007,801 |
| Average realized price (3):                       |                   |   |   |   |   |
|    Gold ($/ounce)                  |  1,257            |  1,711 |  1,403 |  1,664 | 1,564 |
|    Silver ($/ounce)                |  20.28            |  32.46 |  23.61 |  30.78 | 35.15 |
| Total cash costs per gold ounce sold (3)(4)       |  911              |  320 |  676 |  232 | 115 |
| All-in sustaining costs per gold ounce sold (3)   |  1,076            |  458 |  766 |  358 | 195 |
|                                              |                   |   |   |   |   |
| Financial Information:                            |                   |   |   |   |   |
| Revenues                                          |  34.6             |  66.9 |  169.6 |  282.2 |              294.2 |
| Earnings from mine operations                     |  (9.4)            |  35.7 |  34.4 |  158.2 | 172.7 |
| Capital expenditures                              |  10.8             |  3.6 |  24.5 |  11.4 | 7.4 |

| 1. | Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory adjustments, where applicable. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Tonnes of ore processed each period does not necessarily correspond to ounces produced during the period, as there is a time delay between placing tonnes on the leach pad and pouring ounces of gold. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3. | We use certain non-GAAP financial performance measures throughout our MD&A. Total cash costs and all-in sustaining costs per gold ounce sold, total cash costs and all-in sustaining costs on a co-product basis, average realized price, operating margin, adjusted net earnings, adjusted net earnings per share, adjusted net cash generated from operations and cash generated from operations, excluding working capital changes and income taxes paid, are non-GAAP financial performance measures with no standard meaning under IFRS. For further information and a detailed reconciliation, please refer to the “Non-GAAP Performance Measures” section of this MD&A. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | The calculation of total cash costs per ounce of gold is net of by-product silver revenue. Total cash costs and all-in sustaining costs on a co-product basis removes the impact of other metal sales that are produced as a by-product of our gold production and apportions the cash costs to each metal produced on a percentage of revenue basis. If the silver revenues were treated as a co-product, the average total cash costs at Cerro San Pedro for fourth quarter of 2013, would be $971 per ounce of gold (2012 - $603) and $15.65 per ounce of silver (2012 - $11.44). For the year ended December 31, 2013, average total cash costs would be $807 per ounce of gold (2012 - $533) and $13.58 per ounce of silver (2012 - $9.86). All-in sustaining costs on a co-product basis for the fourth quarter of 2013 would be $1,108 per ounce of gold (2012 - $713) and $17.86 per ounce of silver (2012 - $13.54). For the year ended December 31, 2013 the all-in sustaining costs on a co-product basis would be $881 per ounce of gold (2012 - $632) and $14.83 per ounce of silver (2012 - $11.70). |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  ● | First nine years - average annual gold production of 325,000 ounces at total cash costs of $613 per ounce and all-in sustaining costs of $736 per ounce.                                                                                                                    |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  ● | First nine years - average mill head grade of 1.44 grams per tonne gold.                                                                                                                                                                                                    |
|  ● | Life-of-mine gold and silver production of 3.4 million ounces and 6.0 million ounces at total cash costs of $663 per ounce and all-in sustaining costs of $765 per ounce.                                                                                                   |
|  ● | Base case economics - at $1,300 per ounce gold, $22.00 per ounce silver and a 0.95 US$/C$ exchange rate, the Rainy River project has a pre-tax 5% net present value ("NPV") of $438 million, an internal rate of return ("IRR") of 13.1% and a payback period of 5.4 years. |
|  ● | High alternative case economics - at $1,600 per ounce gold, $26.00 per ounce silver and a parity US$/C$ exchange rate, the Rainy River project has a pre-tax 5% NPV of $1.0 billion, an IRR of 21.1% and a payback period of 3.6 years.                                     |
|  ● | Low alternative case economics - at $1,150 per ounce gold, $20.00 per ounce silver and a 0.93 US$/C$ exchange rate, the Rainy River project has a pre-tax 5% NPV of $138 million, an IRR of 7.8% and a payback period of 6.8 years.                                         |
|  ● | Development capital costs of $885 million inclusive of a $70 million contingency.                                                                                                                                                                                           |
|  ● | Targeted commissioning in late 2016 with first year of full production in 2017.                                                                                                                                                                                             |
|  ● | Fourteen year mine life with direct processing of open pit and underground ore, at a rate of 21,000 tonnes per day, for first nine years and processing of a combination of stockpile and underground ore thereafter.                                                       |

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|  ● |  Q1 2015 – Receipt of construction-related approvals. Commence construction and substantially complete detailed engineering. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------|
|  ● |  Q4 2016 – Final construction and ramp up of operations                                                                      |
|  ● |  Q1 2017 - Begin commercial production                                                                                             |

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|  ● | First nine years - average annual gold production of 485,000 ounces at total cash costs of $555 per ounce and all-in sustaining costs of $685 per ounce.                                                                     |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  ● | Life-of-mine gold and silver production of 7 million ounces and 30 million ounces at total cash costs of $578 per ounce and all-in sustaining costs of $670 per ounce.                                                       |
|  ● | 17-year mine life with direct processing for first 14 years and processing of stockpile thereafter.                                                                                                                          |
|  ● | Life-of-mine operational strip ratio of 1.88 to 1.00.                                                                                                                                                                        |
|  ● | Base case economics - at $1,300 per ounce gold, $22.00 per ounce silver and a 0.95 US$/C$ exchange rate, Blackwater has a pre-tax 5% NPV of $991 million, an IRR of 11.3% and a payback period of 6.2 years.                 |
|  ● | High alternative case economics - at $1,600 per ounce gold, $26.00 per ounce silver and a parity US$/C$ exchange rate, Blackwater has a pre-tax 5% NPV of $2,120 million, an IRR of 16.8% and a payback period of 4.5 years. |
|  ● | Low alternative case economics - at $1,150 per ounce gold, $20.00 per ounce silver and a 0.93 US$/C$ exchange rate, Blackwater has a pre-tax 5% NPV of $402 million, an IRR of 7.8% and a payback period of 7.5 years.       |
|  ● | Development capital costs of $1,865 million inclusive of a $190 million contingency.                                                                                                                                         |
|  ● | Conventional truck and shovel open pit mine with 60,000 tonne per day whole ore leach processing plant.                                                                                                                      |

|  ● | Draft Application Information Requirements (Provincial Terms of Reference) completing public review in October and expected to be finalized by Q1 of 2014. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  ● | Environmental Impact Statement at 75% completion.                                                                                                          |

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|  ● |  Project moved to Provincial Major Investment Office, the main list for project review enabling additional provincial resources. |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------|
|  ● |  Continued discussions on Participation Agreements for construction and operation of the mine with key First Nations.            |
|  ● |  Project received Provincial mandate for negotiation of Economic Community Development Agreements with First Nations.            |

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| ● | First quarter 2014 - Commence detailed engineering of the tailings and water management facilities and power line, to support permitting activities |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | Second half of 2014 - Receipt of Provincial and Federal Environmental Assessment approvals                                                          |
| ● | First half of 2015 - Receipt of construction-related approvals                                                                                      |

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|  Key Highlights of 2013 |                                                                                                                                                         |        |
|------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| ●                      | For the fifth consecutive year, the Company increased Measured and Indicated Resources.                                                                      |   |
| ●                      | Acquisition of Rainy River was a significant addition to the Company’s Mineral Reserve and Resource base.                                              |   |
| ●                      | Exploration efforts at Blackwater led to a 1.4 million ounce increase in the overall Measured and Indicated gold Resource base compared to 2012.             |   |
| ●                      | Additionally, completion of the Blackwater Feasibility Study resulted in 8.2 million ounces of Measured and Indicated Resources being converted to Reserves. |   |
| ●                      | At Capoose, 2013 drilling led to increased Measured and Indicated gold and silver Resource base from Inferred Resources.                                     |   |
| ●                      | New Afton Measured and Indicated gold and copper Resources increased due to a significant expansion of the C-zone.                                           |   |

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| 1. | Proven and Probable Reserves and Measured, Indicated and Inferred Resources are calculated as at December 31, 2013 and were in accordance with CIM standards as required under National Instrument 43-101. For a breakdown of Reserves and Resources by category and additional information relating to Reserves and Resources and related key assumptions and parameters, see our Mineral Reserve and Resource Statement in our news release “New Gold Finishes 2013 with Lowest Costs in its History, Increases Gold Reserves by 127 Percent per Share and Provides 2014 Guidance with Even Lower Costs”, dated February 6, 2014 and filed on www.sedar.com. The scientific and technical information in this MD&A has reviewed and approved by Mark Petersen, a Qualified Person under National Instrument 43-101 and an officer of the Company. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                              | December 31   | December 31   |
|---------------------------------------------------|---------------|---------------|
| (in millions of U.S. dollars, except where noted) | 2013          | 2012          |
| Cash and cash equivalents                         |  414.4   |  687.8   |
| Deferred tax assets                               |  171.0   |  194.1   |
| Other assets                                      |  3,613.6 |  3,401.8 |
| Total assets                                      |  4,199.0 |  4,283.7 |
|                                              |          |          |
| Derivative liabilities                            |  -       |  110.5   |
| Reclamation and closure cost obligations          |  61.4    |  68.5    |
| Long-term debt                                    |  862.5   |  847.8   |
| Deferred tax liabilities                          |  381.0   |  322.9   |
| Other liabilities                                 |  174.2   |  257.5   |
| Total liabilities                                 |  1,479.1 |  1,607.2 |
|                                              |          |          |
| Total equity                                      |  2,719.9 |  2,676.5 |

----

|                                                                              |               | December 31   | December 31                                                          |
|-----------------------------------------------------------------------------------|--------------------|---------------|----------------------------------------------------------------------|
|                                                                              | Financial covenant | 2013          | 2012                                                                 |
| Minimum tangible net worth ($1.38 billion + 25% of positive quarterly net income) | > $1.51 billion | $3.10 billion |    $3.05 billion                                      |
| Minimum interest coverage ratio (EBITDA to interest)                              | > 4.0 : 1       | 5.7 : 1       |           13.2 : 1 |
| Maximum leverage ratio (net debt to EBITDA)1                                      | < 3.0 : 1       | 1.3: 1        | 2.0: 1                                                               |

----

----

|                                     |             |        |        | Payments due by period |
|------------------------------------------|------------------|-------------|-------------|------------------------|
| (in millions of U.S. dollars)            | Less than 1 year | 2 - 3 years | 4 - 5 years | After 5 years          | Total |
| Long-term debt                           |  -          |  -     |  -     |  878.4            |  878.4 |
| Interest payable on long-term debt       |  52.3       |  104.5 |  104.5 |  156.5            |  417.8 |
| Operating leases and other commitments   |  60.7       |  17.7  |  1.1   |  -                |  79.5 |
| Reclamation and closure cost obligations |  1.6        |  3.0   |  7.0   |  78.2             |  89.8 |
| Total contractual obligations            |  114.6      |  125.2 |  112.6 |  1,113.1          |  1,465.5 |

----

----

----

|                                                                              | Three months ended December 31 | Year endedDecember 31 |
|-----------------------------------------------------------------------------------|--------------------------------|-----------------------|
| (in millions of U.S. dollars, except where noted)                                 | 2013                           | 2012                  | 2013 | 2012 |
| Operating expenses from continuing operations                                     |  121.7                    |  105.2           |  435.5 |  344.3 |
| Treatment and refining charges on concentrate sales                               |  8.0                      |  7.7             |  29.4 |  12.9 |
| Adjustments(1)                                                                    |  (12.3)                   |  0.3             |  (13.3) |  0.3 |
| Total cash costs before by-product revenue                                        |  117.4                    |  113.2           |  451.6 |  357.5 |
| By-product copper and silver sales                                                |  (84.5)                   |  (85.3)          |  (303.8) |  (190.9) |
| Total cash costs net of by-product revenue                                        |  32.9                     |  27.9            |  147.8 |  166.6 |
| Ounces of gold sold                                                               |  104,523                  |  109,766         |  391,823 |  395,535 |
| Total cash costs per ounce of gold sold ($/ounce)                                 |  316                      |  254             |  377 |  421 |
| Total cash costs per ounce of gold sold on a co-product basis(2) ($/ounce)        | 658                            | 680                   | 712 | 679 |
| Sustaining Capital Expenditures(3)                                                | 48.4                           | 44.9                  | 157.0 | 105.0 |
| Sustaining exploration - expensed & capitalized                               | 3.0                            | 6.2                   | 11.6 | 18.7 |
| Corporate G&A including share based compensation(4)                           | 7.3                            | 11.1                  | 34.4 | 35.5 |
| Reclamation expenses                                                              | 0.5                            | 0.3                   | 1.5 | 1.4 |
| Total all-in sustaining costs                                                     | 59.2                           | 62.5                  | 204.6 | 160.6 |
| All-in sustaining costs per ounce of gold sold ($/ounce)                          |  883                      |  823             |  899 |  827 |
| All-in sustaining costs per ounce of gold sold on a co-product basis(2) ($/ounce) | 1,000                          | 1,061                 | 1,042 | 988 |

| 1. | Adjustments include non-cash items related to royalties and asset retirement obligations as well as redundancy charges at Peak Mines and New Afton and the silver inventory write-down at Cerro San Pedro.                     |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Amounts presented on a co-product basis remove the impact of other metal sales that are produced as a by-product of our gold production and apportions the cash costs to each metal produced on a percentage of revenue basis. |
| 3. | See “Sustaining Capital Expenditure Reconciliation” below to reconcile sustaining capital expenditures to mining interests per the statement of cash flows.                                                        |
| 4. | This is the sum of corporate administration costs and share-based payment expense per the income statement, net of any non-cash depreciation within those figures.                                                             |

|                                                   | Three months endedDecember 31 | Year endedDecember 31 |
|--------------------------------------------------------|-------------------------------|-----------------------|
| (in millions of U.S. dollars, except where noted)      | 2013                          | 2012                  | 2013 | 2012 |
| Mining Interests per statement of cash flows(1)        | 82.5                          | 111.0                 | 283.6 | 507.5 |
| Non-sustaining Blackwater capital expenditure          |  (12.9)                  |  (41.6)          |  (48.3) |  (134.2) |
| Non-sustaining New Afton capital expenditure (2)       |  (0.3)                   |  (23.7)          |  (32.0) |  (265.1) |
| Non-sustaining Cerro San Pedro capital expenditure (3) |  (7.1)                   |   -         |  (15.8) |   - |
| Non-sustaining Rainy River capital expenditure         |  (13.7)                  |  -               |  (21.2) |  - |
| Capitalized exploration included in mining interests   |  (0.1)                   |  (0.9)           |  (9.2) |  (3.2) |
| Sustaining Capital Expenditures                        | 48.4                          | 44.9                  | 157.0 | 105.0 |

| 1. | Current year Mining Interests per statement of cash flows are net of proceeds received from government assistance. Prior year Mining Interests include the purchase of additional Blackwater mining claims but are net of proceeds received from sale of pre-commercial production inventory.         |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. | Current year non-sustaining capital expenditure at New Afton relates to acceleration of the east cave development ahead of mine plan as well as exploration costs related to advancing the C-zone. Prior year costs relate to costs when New Afton was in development prior to commercial production. |
| 3. | Current year non-sustaining capital expenditure at Cerro San Pedro is the capitalized stripping costs related to the phase 5 pushback.                                                                                                                                                                |

| ● | Impairment losses;                                                     |
|---------|------------------------------------------------------------------------|
| ● | Fair value changes of embedded derivative in Senior Secured Notes;     |
| ● | Gains (losses) on Fair Value through Profit and Loss financial assets; |
| ● | Ineffectiveness of hedging instruments;                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------|
| ● | Fair value changes of non-hedged derivatives such as share purchase warrants and the prepayment option on our convertible debt; |
| ● | Gains (losses) on foreign exchange; and                                                                                         |

| ● | Other non-recurring items. |
|---------|----------------------------|

----

|                                                   | Three months ended December 31 | Year endedDecember 31 |
|--------------------------------------------------------|--------------------------------|-----------------------|
| (in millions of U.S. dollars, except where noted)      | 2013                           | 2012                  | 2013 | 2012 |
| Net earnings (loss) before taxes                       |  (281.8)                  |  137.7           |  (191.6) |  278.8 |
| Loss on redemption of Senior Secured Notes             |  -                        |  -               |  - |  31.8 |
| Loss on disposal of assets                             |  0.9                      |  2.0             |  2.6 |  3.3 |
| Ineffectiveness on hedging instruments                 |  -                        |  1.3             |  (9.5) |  2.9 |
| Realized and unrealized gain on non-hedged derivatives |  (4.5)                    |  (70.2)          |  (49.3) |  (61.1) |
| Loss (gain) on foreign exchange                        |  13.9                     |  (3.4)           |  25.7 |  1.3 |
| Other                                                  |  2.8                      |  0.7             |  4.5 |  1.9 |
| Add back to revenue for hedge OCI reclassification     |  7.0                      |  -               |  18.7 |  - |
| Rainy River transaction expenses                       |  0.1                      |  -               |  5.0 |  - |
| Redundancy charges                                     |  2.4                      |  -               |  2.4 |  - |
| Asset impairment                                       |  272.5                    |  -               |  272.5 |  - |
| Silver inventory write-down                            |  7.3                      |  -               |  7.3 |  - |
| Adjusted net earnings before tax                       |  20.6                     |  68.1            |  88.3 |  258.9 |
|                                                   |                           |                  |   |   |
| Income tax expense                                     |  27.1                     |  (13.8)          |  0.4 |  (79.8) |
| Income tax adjustments                                 |  (31.0)                   |  (4.6)           |  (27.4) |  4.4 |
| Adjusted income tax expense                            |  (3.9)                    |  (18.4)          |  (27.0) |  (75.4) |
|                                                   |                           |                  |   |   |
| Adjusted net earnings                                  |  16.7                     |  49.7            |  61.3 |  183.5 |
| Adjusted earnings per share (basic)                    |  0.04                     |  0.11            |  0.13 |  0.40 |
| Adjusted effective tax rate                            | 19%                            | 27%                   | 31% | 29% |

----

|                                                  | Three months ended December 31                                                                                                    | Year endedDecember 31 |
|-------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|-----------------------|
| (in millions of U.S. dollars, except where noted)     | 2013                                                                                                                              | 2012                  | 2013 | 2012 |
| Net cash (used) generated from operations             |  99.7                                                                                                                        |  106.2           |  171.9 |  235.8 |
| Add back: Settlement payment of gold hedge contracts  |  -                                                                                                                           |  -               |  65.7 | - |
| Add back: Rainy River acquisition costs               |                      0.1 | -                     | 5.0 | - |
| Add back: Payment of Rainy River acquisition expenses | -                                                                                                                                 | -                     | 12.9 | - |
| Deduct: Amended tax returns for Peak Mines            | (6.6)                                                                                                                             | -                     | (6.6) | - |
| Adjusted net cash generation from operations          | 93.2                                                                                                                              | 106.2                 | 248.9 | 235.8 |

|                                                                                    | Three months ended December 31 | Year ended   December 31 |
|-----------------------------------------------------------------------------------------|--------------------------------|-----------------------------------------|
| (in millions of U.S. dollars, except where noted)                                       | 2013                           | 2012                                    | 2013 | 2012 |
| Net cash generated from operations                                                      |  99.7                     |  106.2                             |  171.9 |  235.8 |
| Add back: Change in non-cash operating working capital                                  |  (21.4)                   |  (3.1)                             |  9.7 |  44.8 |
| Add back: Income taxes paid                                                             |  (5.9)                    |  24.9                              |  31.7 |  100.6 |
| Cash generated from operations, excluding working capital changes and income taxes paid |  72.4                     |  128.0                             |  213.3 |  381.2 |

|                                              | Three months ended December 31 | Year endedDecember 31 |
|---------------------------------------------------|--------------------------------|-----------------------|
| (in millions of U.S. dollars, except where noted) | 2013                           | 2012                  | 2013 | 2012 |
| Revenues                                          |  198.4                    |  250.9           |  779.7 |  791.3 |
| Less: Operating expenses                          |  (121.7)                  |  (105.2)         |  (435.5) |  (344.3) |
| Operating margin                                  |  76.7                     |  145.7           |  344.2 |  447.0 |

----

|                                              | Three months ended December 31 | Year endedDecember 31 |
|---------------------------------------------------|--------------------------------|-----------------------|
| (in millions of U.S. dollars, except where noted) | 2013                           | 2012                  | 2013 | 2012 |
| Revenues from gold sales                          | 128.9                          | 173.2                 | 524.0 | 613.3 |
| Ounces of gold sold                               |  104,523                  |  109,766         |  391,823 |  395,535 |
| Average realized price per ounce of gold sold     |  1,233                    |  1,578           |  1,337 |  1,551 |

----

----

| As at December 31, 2013                          |
|--------------------------------------------------|
| (in millions of U.S. dollars)                    | Loans and receivables at amortizedcost | Fair Valuethrough Profit & Loss | Available forsale at fair value | Financial liabilities at amortized cost | Total |
| Financial assets                                 |   |   |   |   |   |
|    Cash and cash equivalents      |  414.4 | - | - | - |  414.4 |
|    Trade and other receivables    |  20.5 | - | - | - |  20.5 |
|    Provisionally prices contracts |   |  1.3 | - | - |  1.3 |
|    Copper swap contracts          |   |  (2.5) | - | - |  (2.5) |
|    Investments                    | - | - |  0.5 | - |  0.5 |
| Financial liabilities                            |   |   |   |   |   |
|    Trade and other payables       | - | - | - |  90.2 |  90.2 |
|    Long-term debt                 | - | - | - |  862.5 |  862.5 |
|    Performance share units        | - |  0.8 | - | - |  0.8 |
|    Warrants                       | - |  27.8 | - | - |  27.8 |
|    Share award units              | - |  0.9 | - | - |  0.9 |

| As at December 31, 2012                          |
|--------------------------------------------------|
| (in millions of U.S. dollars)                    | Loans and receivables at amortized cost | Designated as Fair Value through Profit & Loss | Available for sale at fair value | Financial liabilities at amortized cost | Total |
| Financial assets                                 |   |   |   |   |   |
|    Cash and cash equivalents      |  687.8 | - | - | - |  687.8 |
|    Trade and other receivables    |  49.3 | - | - | - |  49.3 |
|    Provisionally priced contracts | - |  (1.5) | - | - |  (1.5) |
|    Copper swap contracts          | - |  (0.9) | - | - |  (0.9) |
|    Investments                    | - | - |  1.0 | - |  1.0 |
| Financial liabilities                            |   |   |   |   |   |
|    Trade and other payables       | - | - | - |  117.4 |  117.4 |
|    Long-term debt                 | - | - | - |  847.8 |  847.8 |
|    Gold contracts                 | - |  110.5 | - | - |  110.5 |
|    Warrants                       | - |  80.3 | - | - |  80.3 |
|    Share award units              | - |  4.0 | - | - |  4.0 |

|                                               | December 31 | December 31 |
|----------------------------------------------------|-------------|-------------|
| (in millions of U.S. dollars)                      | 2013        | 2012        |
| Cash and cash equivalents                          |  414.4 |  687.8 |
| Trade receivables                                  |  19.3  |  46.9  |
| Total financial instruments subject to credit risk |  433.7 |  734.7 |

----

|                          |       |       |       |        |         | December 31 | December 31 |
|-------------------------------|------------|------------|------------|-------------|--------------|-------------|-------------|
| (in millions of U.S. dollars) | 0-30days   | 31-60 days | 61-90 days | 91-120 days | Over 120days | 2013Total   | 2012Total   |
| New Afton                     |  1.7  |  4.2  |  -    |  -     |  -      |  5.9   |  21.5  |
| Cerro San Pedro               |  3.7  |  1.9  |  0.3  |  -     |  2.6    |  8.5   |  4.7   |
| Mesquite                      |  0.4  |  -    |  -    |  -     |  -      |  0.4   |  0.9   |
| Peak Mines                    |  3.0  |  -    |  -    |  -     |  -      |  3.0   |  5.5   |
| Rainy River project           |  0.8  |  -    |  -    |  -     |  -      |  0.8   |  -     |
| Blackwater project            |  0.5  |  -    |  -    |  -     |  -      |  0.5   |  13.1  |
| Corporate                     |  0.2  |  -    |  -    |  -     |  -      |  0.2   |  1.2   |
| Total trade receivables       |  10.3 |  6.1  |  0.3  |  -     |  2.6    |  19.3  |  46.9  |

|                               |             |        |        |          | December 31   | December 31   |
|------------------------------------|------------------|-------------|-------------|---------------|---------------|---------------|
| (in millions of U.S. dollars)      | Less than 1 year | 2-3         | 4-5years    | After 5 years | 2013Total     | 2012Total     |
|  years                        |
| Trade and other payables           |  89.4       |  0.8   |  -     |  -       |  90.2    |  120.7   |
| Long-term debt                     |  -          | -           |  -     |  878.4   |  878.4   |  800.0   |
| Interest payable on long-term debt |  52.3       |  104.5 |  104.5 |  156.5   |  417.8   |  470.1   |
| Gold contracts                     |  -          |  -     |  -     |  -       |  -       |  116.7   |
| Copper swap contracts              |  (2.5)      |  -     |  -     |  -       |  (2.5)   |  0.9     |
|                               |  140.5      |  105.3 |  104.5 |  1,034.9 |  1,383.9 |  1,508.4 |

----

| As at December 31, 2013                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (in millions of U.S. dollars)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Canadian dollar | Australian dollar | Mexican peso | Chilean peso |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 61.5 | 2.0 | 0.8 |   |
| Trade and other receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 7.3 | 3.0 | 8.6 | - |
| Trade and other payables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (41.3) | (22.2) | (22.6) | - |
| Reclamation and closure cost obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (17.3) | (15.6) | (18.6) | - |
| Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | (1.6) | - | - | - |
| Share award units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (27.8) | - | - | - |
| Gross balance exposure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (19.2) | (32.8) | (31.8) | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                   As at December 31, 2012 |
| (in millions of U.S. dollars)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Canadian dollar | Australian dollar | Mexican peso | Chilean peso |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  19.6 |  10.2 |  0.3 |  - |
| Trade and other receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  35.9 |  2.1 |  4.7 |  - |
| Trade and other payables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  (70.8) |  (18.4) |  (16.3) |  - |
| Reclamation and closure cost obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  (17.9) |  (21.4) |  (18.4) |  - |
| Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  (80.3) |  - |  - |  - |
| Share award units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  (4.0) |  - |  - |  - |
| Gross balance exposure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  (117.5) |  (27.5) |  (29.7) |  - |

|                            | December 31 | December 31  |
|---------------------------------|-------------|--------------|
| (in millions of U.S. dollars)   | 2013        | 2012         |
| Canadian dollar                 |  (1.9) |  (11.8) |
| Australian dollar               |  (3.3) |  (2.7)  |
| Mexican peso                    |  (3.2) |  (2.9)  |
| Chilean peso                    | -           | -            |
| Total translation risk exposure |  (8.4) |  (17.4) |

| ● | the strength of the U.S. economy and the economies of other industrialized and developing nations; |
|---------|----------------------------------------------------------------------------------------------------|
| ● | global or regional political or economic conditions;                                               |
| ● | the relative strength of the U.S. dollar and other currencies;                                     |
| ● | expectations with respect to the rate of inflation; |
|---------|-----------------------------------------------------|
| ● | interest rates;                                     |

----

| ● | purchases and sales of gold by central banks and other large holders, including speculators; |
|---------|----------------------------------------------------------------------------------------------|

| ● | demand for jewellry containing gold; and |
|---------|------------------------------------------|

| ● | investment activity, including speculation, in gold as a commodity. |
|---------|---------------------------------------------------------------------|

| Year ended December 31        |
|-------------------------------|
|                          | 2013 | 2013 | 2012 | 2012 |
| (in millions of U.S. dollars) | Net earnings | Other Comprehensive Income | Net earnings | Other Comprehensive Income |
| Gold price                    |  52.4 |  - |  61.3 |  21.1 |
| Silver price                  |  3.0 | - |  12.7 | - |
| Copper price                  |  26.6 | - |  5.9 | - |
| Fuel price                    |  7.2 | - |  6.1 | - |
| Warrants                      |  2.8 | - |  8.0 | - |
| Share aware units             |  0.2 | - |  0.4 | - |
| Total price risk exposure     |  92.2 |  - |  94.4 |  21.1 |

----

----

| ● | All major capital expenditures to bring the mine to the condition necessary for it to be capable of operating in the manner intended by management have been completed; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | The completion of a reasonable period of testing of the mine plant and equipment; |
|---------|-----------------------------------------------------------------------------------|

| ● | The mine or mill has reached a pre-determined percentage of design capacity; and |
|---------|----------------------------------------------------------------------------------|
| ● | The ability to sustain ongoing production of ore.                                |

----

----

----

| ● | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Provide reasonable assurance regarding prevention or timely detections of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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