The exploration strategy includes the development of a 370 metre drift to accelerate underground exploration drilling and provide ideal drill platforms for resource development over the coming years. K-Zone represents a potential zone of porphyry copper-gold mineralization in addition to the AI targets from 2020, reported below. These discoveries highlight the high prospectivity at New Afton and, while still in the early stages of drilling, could potentially unlock new mining zones above the C-Zone footprint elevation.

Looking outside the New Afton underground mine, the Company has identified further strategic opportunities for mine life extension, both on the New Afton land package and regionally within South-Central British Columbia, leveraging on New Afton's processing plant, infrastructure, and tailings storage facility, which have sufficient capacity to process significantly more ore beyond the current New Afton mine life. The Company is launching a regional-scale mineral system and machine-learning driven prospectivity analysis with the primary objective of discovering the next generation of porphyry copper-gold deposits in South-Central British Columbia. Following New Afton's recent success with ore purchasing, the Company is assessing exploration opportunities at its existing properties in the region for high-grade ore as supplementary mill feed to generate incremental cash flow.

New Gold reported drilling results at K-Zone, a distinct and promising zone of porphyry copper-gold mineralization situated 200 metres east of East Extension. The K-Zone is characterized by disseminated chalcopyrite mineralization hosted within potassic-altered diorite, defining a trend subparallel to the East Extension Zone. Boreholes EA23-455 and EA23-462 intersected 20 metres (estimated true width) of 0.32 g/t gold and 0.27% copper mineralization, and 14 metres (estimated true width) of 0.64 g/t gold and 0.67% copper mineralization, respectively.

Future exploration will utilize the planned exploration drift, which is anticipated to improve the drilling angle and allow testing the up-dip continuation of the K-Zone where a zonation to higher-grade bornite-dominated mineralization is targeted based on metal zonation observed elsewhere within the mine, including at East Extension. A table with all K-Zone assay results from 2020 to 2023, including results from non-representative boreholes drilled along the zone, are presented in Appendix A to this news release. The company reports the intersection of a potassic-alteration-dominated mineralized copper-gold zone at AI-Southeast, located below the calc-potassic HW1 Zone (Figure 3).

Borehole EA21-302 intersected 40 metres (estimated true width) of 0.56 g/t gold and 1.03% copper mineralization within potassic alteration, interpreted to be the top of the calc-potassic to potassic transition zone, mimicking the alteration and metal zonation identified elsewhere within the mine, where the potassic zone typically shows increased grades and continuity. The 2024 AI-Southeast exploration campaign anticipates targeting the down-dip continuation of the zone utilizing the planned K-Zone underground exploration drift mentioned above. The company consolidated 14,000 hectares of mineral claims encompassing the Little Fort property in South-Central British Columbia.

Situated within a well-established alkalic porphyry belt, located 110 kilometres by highway north of the New Afton processing plant, this property boasts a multitude of documented mineral occurrences, ranging from historical workings to advanced prospects, all indicative of a copper-gold porphyry system. Several mineral occurrences within the property underscore high prospectivity of this area, hinting at the potential for an undiscovered porphyry. The 2023 exploration campaign is meticulously geared towards target generation, encompassing soil geochemistry, geological mapping, and induced polarization geophysics.

Fieldwork in 2024 is expected to include advanced geophysical assessments across the entire property, revising 3D geological models and interpretations, and employing property-scale machine-learning-based target generation supported by ALS GoldSpot. The Company was granted a five-year Notice of Work drilling permit and plans to initiate drilling on newly generated targets at Little Fort in 2024. The Company completed a successful 2023 exploration campaign on the Meridian Property.

This high-grade orogenic gold prospect spans 615 hectares of contiguous claims located 310 kilometres by highway from the New Afton processing plant. The property has a history of underground mining dating back to the early 1900s and 1930s and centres around the Camborne Fault, a known prospective structure regionally associated with numerous gold and silver occurrences. The Company has identified exploration potential over a four kilometre long corridor, including gold-bearing quartz veins defined by surface and underground mapping over one kilometre.

Fieldwork to date has encompassed geological mapping, chip sampling, LiDAR surveys, drone magnetometry, and digitization of historical underground workings. The Company plans to initiate a drilling campaign at Meridian in 2024, with a five-year Notice of Work drilling permit submitted and pending approval.