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News Release - Thursday, July 05, 2007
Another Milestone in Development of New Afton Project, EP
Contractor Selected
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July 5, 2007 -- Vancouver, British Columbia. New Gold Inc.
(NGD:TSX/AMEX) is pleased to announce the selection of AMEC Americas
Limited ("AMEC") to carry out the detailed engineering design and
procurement work ("EP Contract") for the Company's 100%-owned New Afton
copper-gold project ("New Afton") located near Kamloops, British
Columbia, Canada.

In making this announcement, President and CEO Chris Bradbrook stated,
"This is yet another important and exciting milestone for New Gold and
its shareholders. We are very pleased to have AMEC working with us
towards the development of our New Afton project into one of Canada's
largest underground metals mines and one of its lowest cost gold
producers (using copper as a bi-product credit). Their excellent track
record of working with companies to move from the mine feasibility
through the construction phase, combined with their significant
experience in British Columbia, made AMEC a strong candidate for the
completion of the EP Contract. Our recently completed debt and equity
financing (June 28, 2007) has provided us with the ability to maintain
our schedule of placing the mine into production by 2009. The prompt
awarding of the EP contract is another important factor in our ability
to achieve this goal."

AMEC is an international engineering firm with extensive experience in
providing complete design services for every aspect of mine and mineral
plant development, including underground infrastructure, material
handling systems and process plants, plus ancillaries and
infrastructure such as roads, office complexes, laboratories and
utilities.

The EP Contract will cover the engineering design and procurement work
for the permanent underground infrastructure, along with the process
plant surface buildings and infrastructure. It is anticipated that
total costs to complete the EP Contract will be approximately $12
million, in accordance with previously released (April 2, 2007) capital
cost estimates from the Feasibility Study. Specifically it will
include the following components:

.. familiarization with the project scope, conceptual designs, and
estimated costs
.. review of the design basis
.. basic engineering design and identification of long lead delivery
items
.. detailed engineering design
.. procurement management

New Gold has already placed orders for the longest lead time items,
being the SAG and Ball Mills, and has mobilized the underground
contractor. The Company is in excellent financial condition, with more
than $400 million in cash and 37 million shares outstanding.

For more information, contact:

Chris Bradbrook
President and Chief Executive Officer
New Gold Inc.
601 - 595 Howe Street, Vancouver, B.C. V6C 2T5
Tel: 877-977-1067 or 604-687-1629, Fax: 604-687-2845
Email: invest@newgoldinc.com
Website: www.newgoldinc.com

Certain of the statements made and information contained herein is
"forward- looking information" within the meaning of the Securities Act
(Ontario) and Securities Act (Alberta) or "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of
1934 of the United States. Forward-looking statements are subject to a
variety of risks and uncertainties which could cause actual events or
results to differ from those reflected in the forward-looking
statements, including, without limitation, risks and uncertainties
relating to the interpretation of drill results and the estimation of
mineral resources and reserves, the geology, grade and continuity of
mineral deposits, the possibility that future exploration, development
or mining results will not be consistent with the Company's
expectations, metal recoveries, accidents, equipment breakdowns, title
matters and surface access, labour disputes or other unanticipated
difficulties with or interruptions in production, the potential for
delays in exploration or development activities or the completion of
feasibility studies, the inherent uncertainty of production and cost
estimates and the potential for unexpected costs and expenses,
commodity price fluctuations, currency fluctuations, failure to obtain
adequate financing on a timely basis and other risks and uncertainties,
including those described under Risk Factors Relating to the Company's
Business in the Company's Annual Information Form and in each
management discussion and analysis. Forward-looking information is in
addition based on various assumptions including, without limitation,
the expectations and beliefs of management, the assumed long term price
of copper and gold, that the feasibility study will confirm that a
technically viable and economic operation exists, that the Company will
receive required permits and access to surface rights, that the Company
can access financing, appropriate equipment and sufficient labour and
that the political environment within British Columbia and Canada will
continue to support the development of environmentally safe mining
projects so that the Company will be able to commence the development
of the New Afton project within the timetable to be established by the
feasibility study. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those described in forward-looking
statements. Accordingly, readers are advised not to place undue
reliance on forward-looking statements.

Cautionary note to U.S. investors concerning estimates of Measured,
Indicated and Inferred Resources, and the use of the terms "measured"
"indicated resources," and "inferred". We advise U.S. investors that,
while those terms are recognized and required by Canadian regulations,
the U.S. Securities and Exchange Commission ("SEC") permits mining
companies, in their filings with the SEC, to disclose only those
mineral deposits that a company can economically and legally extract or
produce and does not recognize them. "Inferred" resources have a great
amount of uncertainty as to their existence and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or
any part of an "Inferred" resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of "Inferred" resources may
not form the basis of feasibility or pre-feasibility studies, except in
rare cases. U.S. investors are cautioned not to assume that any part
or all of mineral deposits in these categories will ever be converted
into reserves or be economically or legally mineable.
WARNING: The Company relies upon litigation protection for
"forward-looking" statements.

Associated File:
http://www.newgoldinc.com/i/pdf/07-05-07_EP Contract.pdf
34 KB in size, approx. 7 seconds to download at 56.6Kbps

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Copyright (c) 2007 NEW GOLD INC. (TSX/AMEX:NGD) All rights reserved.
For more information visit our website at http://www.newgoldinc.com/ or
send mailto:invest@newgoldinc.com
Message sent on Fri Jul 6, 2007 at 1:02:20 PM Pacific Time
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