VANCOUVER,
April 30, 2014 /CNW/ – New
Gold Inc. (“New Gold”) (TSX:NGD) and (NYSE MKT:NGD) today
announces first quarter 2014 operational and financial results. The company
produced 91,317 ounces of gold at record-low all-in sustaining costs⁽¹⁾
of $674 per ounce, resulting in strong free cash flow
generation.

“Our
first quarter results provide us with solid momentum as we look ahead to the
remainder of 2014, particularly as we continue to expect our strongest quarters
to be in the second half of the year,” stated Randall Oliphant , Executive Chairman. “We are very proud to have delivered record-low
all-in sustaining costs which further highlight the ability of our operating
portfolio to generate robust free cash flow.”

“In
addition to our outstanding operating performance, we made important strides in
the advancement of our Rainy
River project. During the quarter we successfully completed our
Feasibility Study, advanced our permitting efforts and engaged our EPCM
partner,” added Mr. Oliphant.

Operations
Overview

Gold Production

Consolidated
gold production during the quarter remained consistent with the first quarter
of 2013. New Afton’s continued strong performance offset the planned quarterly
decreases in production at the Peak Mines and Cerro San Pedro. Consistent with
the company’s February 6, 2014 guidance, New
Gold’s consolidated gold production is scheduled to increase steadily
through the second half of 2014, with the highest quarterly production of the
year planned in the fourth quarter.

New
Afton – Gold
production increased by 83% when compared to the prior-year quarter. All of the
key operational factors driving production, including throughput, grade and
recovery, increased during the first quarter enabling New Afton to deliver its
highest ever quarterly gold production. Average daily throughput was
approximately 12,900 tonnes, the gold grade processed was 0.86 grams per tonne
and gold recoveries remained steady at 85%. In the prior-year quarter, New
Afton was in the midst of its successful ramp up which saw the mill outperform
expectations resulting in the need to process lower grade stockpile ore from
the historical Afton open pit. For 2014, New Afton is off to a solid start and
remains on track to have another strong year.

Mesquite
– Production at Mesquite
remained consistent with the first quarter of 2013. The increase in the gold
grade of ore placed on the leach pad during both the quarter and in late 2013
offset the planned decrease in ore tonnes placed in the period. Consistent with
the company’s 2014 guidance, Mesquite’s mine plan early in the year focuses on
additional waste stripping to open more ore faces in the pit in the second half
of 2014 which, in turn, is expected to provide enhanced operational flexibility
and drive higher production as the year progresses.

Peak
Mines – As
anticipated, gold production at the Peak Mines in the first quarter was below
that of the particularly strong prior-year quarter. Mill throughput and gold
recoveries were both consistent with the prior year, however, gold grade in the
first quarter was below that of the prior-year quarter while remaining in line
with reserve grade. Through the balance of 2014, the combination of moderate
increases in throughput and higher gold grade is scheduled to lead to higher
quarterly production.

Cerro
San Pedro – Consistent
with the company’s 2014 guidance, Cerro San Pedro’s mining activity in the
first half of the year is primarily focused on waste stripping to prepare the
pit for the final phase of mining. Cerro San Pedro’s first quarter production
was in line with the company’s plans, however, when compared to the same period
of the prior year, fewer ore tonnes were placed on the leach pad which led to
lower production. Cerro San Pedro is scheduled to achieve a marked increase in
ore tonnes placed coupled with higher gold grade in the second half of the
year.

Copper
Production

Copper
production increased by 62% when compared to the first quarter of 2013, driven
by a combination of New Afton’s record production quarter and the steady
contribution from the Peak Mines. New Afton’s copper production during the
first quarter increased by 86% to 22.0 million pounds. New Afton’s record
quarterly copper production was a result of throughput, copper grade and copper
recovery all increasing when compared to the same period of the prior year when
lower grade stockpile ore from the historical Afton open pit was processed. At
the Peak Mines, copper production was consistent with the prior-year quarter.

Silver
Production

Silver
production in the first quarter of 2014 was in line with the same period of the
prior year as an increase in silver production at New Afton offset a minor
decrease in production at Cerro San Pedro.

All-in
Sustaining Costs⁽¹⁾ and Total Cash Costs⁽²⁾

On
a consolidated basis, New Gold
delivered record-low all-in sustaining costs⁽¹⁾ and total cash costs⁽²⁾
in the first quarter of 2014. All-in sustaining costs⁽¹⁾ decreased
by over $300 per ounce when compared to the prior-year quarter
and were over $100 per ounce below the company’s previous
quarterly low of $779 per ounce achieved in the third quarter of
2013. At the same time, total cash costs⁽²⁾, which form a component
of all-in sustaining costs⁽¹⁾, decreased by over $200
per ounce compared to the first quarter of 2013. Importantly, both cost metrics
also exhibited a quarter-over-quarter decrease when compared to the fourth
quarter of 2013.

New
Afton – Operating
costs decreased significantly when compared to the first quarter of 2013 due to
a combination of the mine’s strong operating performance and the depreciation
of the Canadian dollar. The mine’s Canadian dollar operating costs, including
mining, processing and general and administrative costs, were below C$20
per tonne during the first quarter as New Afton continues to drive down costs
through improved operational efficiency. New Afton’s reported U.S. dollar costs
further benefitted as the Canadian dollar depreciated by 10% relative to the
U.S. dollar. At the same time, the increase in copper production at New Afton
more than offset the decrease in the average realized copper price during the
quarter.

Sustaining
capital expenditures at New Afton during the first quarter were consistent with
the prior-year quarter, but when combined with the increased gold production
ounces noted above, resulted in an even more significant decrease in all-in
sustaining costs⁽¹⁾.

New
Afton’s quarterly co-product cash costs⁽²⁾ decreased to $413
per ounce of gold and $0.93 per pound of copper from $721
per ounce of gold and $1.56 per pound of copper in the same
period of the prior year. The mine’s co-product all-in sustaining costs⁽¹⁾
also decreased to $630 per ounce of gold and $1.41
per pound of copper from $1,164 per ounce of gold and $2.51
per pound of copper in the first quarter of 2013.

Mesquite
– Total cash costs⁽²⁾
at Mesquite were in line with the prior-year period as operating costs and
production remained consistent. As a result of a slight increase in sustaining
capital expenditures, primarily associated with continued infill drilling at
Mesquite, all-in sustaining costs⁽¹⁾ in the first quarter were
moderately above those of the prior-year period.

Peak
Mines – All-in
sustaining costs⁽¹⁾ and total cash costs⁽²⁾ at the Peak
Mines both decreased markedly relative to the prior-year quarter. Peak Mines’
reported U.S. dollar total cash costs⁽²⁾ benefitted from a
combination of improved productivity, resulting in lower Australian dollar
operating costs, and a 16% depreciation of the Australian dollar relative to the
U.S. dollar. These benefits were partially offset by lower copper by-product
revenue, resulting from both lower copper sales volumes and lower realized
prices, as well as the lower gold production base noted above. Sustaining
capital expenditures at the Peak Mines during the quarter were lower than the
prior-year quarter resulting in an even more significant decrease in all-in
sustaining costs⁽¹⁾ when compared to the first quarter of 2013.

Cerro
San Pedro – Operating
costs and sustaining capital expenditures at Cerro San Pedro remained similar
to the first quarter of 2013. However, all-in sustaining costs⁽¹⁾
and total cash costs⁽²⁾ were impacted by a combination of lower
silver by-product revenue, resulting from both lower silver sales volumes and
lower realized prices, as well as from lower gold production due to the focus
on waste stripping early in the year.

“Our
operational performance in the first quarter was right in line with our
plans,” stated Robert Gallagher , President and Chief
Executive Officer. “It is great to get 2014 off to a good start with
further cost reductions at New Afton and the Peak Mines as well as solid
performances at Mesquite and Cerro San Pedro, despite their planned focus on
waste stripping. As a result, we can now look forward to both of our open pit
mines being positioned to have their strongest performance towards the end of
the year.”

Financial
Results Overview

Revenue
during the first quarter was impacted by the decrease in the average realized
prices of gold, copper and silver relative to the same period of the prior
year. When compared to the first quarter of 2013, the average realized gold
price decreased by 12%, the copper price by 13% and the silver price by 30%.
These commodity price declines were almost entirely offset by an increase in
copper sales volumes when compared to the prior-year quarter.

Operating
margin⁽⁴⁾ in the first quarter remained in line with the prior-year
period despite the decline in commodity prices. New
Gold was able to maintain a consistent operating margin⁽⁴⁾ as
the company’s operating expenses decreased by $8 million during
the first quarter. As previously noted, the decrease in operating expenses was
driven by a combination of improved operational efficiency at the company’s
mines as well as the depreciation of the Canadian and Australian dollars
relative to the U.S. dollar. All four of the company’s operations generated
positive operating margins⁽⁴⁾, with New Afton being the most
significant contributor at $70 million.

The
company generated adjusted net earnings⁽³⁾ of $18 million,
or $0.04 per share, which remained consistent with adjusted net
earnings⁽³⁾ in the prior-year quarter despite lower commodity
prices. The reported net loss in the first quarter was $2 million,
or $0.00 per share. The net loss was driven by the combination
of a $19 million pre-tax loss on foreign exchange, of which $17
million was non-cash, and a $7 million pre-tax non-cash
accounting charge to revenue as the loss incurred on the monetization of the
company’s legacy hedge position in May of 2013 is realized into income over the
original term of the hedge contract. Net earnings in the prior-year period included
a non-cash $23 million pre-tax gain on the mark to market of the
company’s share purchase warrants which was partially offset by a pre-tax
foreign exchange loss of $6 million, of which $5 million
was non-cash.

New Gold’s first quarter net
cash generated from operations increased by 39%, or $23 million,
to $81 million. The increase in net cash generated from
operations when compared to the prior-year quarter was driven by a combination
of New Gold’s ability to
maintain consistent revenues, after adjusting for the above-noted legacy
hedge-related accounting charge, an $8 million decrease in
operating expenses, an aggregate $2 million decrease in
corporate administration and exploration costs, a $4 million
favourable movement in working capital, and a $10 million
decrease in cash taxes as a higher proportion of the company’s profitability is
being driven by New Afton in Canada
where New Gold has built up a
substantial tax basis that results in minimal Canadian cash taxes.

Projects
Overview

New
Afton Mill Expansion

At
its annual Investor Day on February 6, 2014, the company
announced its plans to proceed with a mill expansion at New Afton that should
position the operation to deliver even further increases in both throughput and
gold and copper recoveries, which is expected to result in higher annual cash
flow. The mill installation, commissioning and ramp-up to the targeted 14,000
tonnes per day remains on schedule for mid-2015.

During
the first quarter, New Gold
successfully advanced the expansion project. The company engaged AMEC
Americas Limited as its EPCM partner, commenced detailed engineering and
ordered the vertimill as well as ancillary equipment and spares. The expansion
project remains on budget with a total capital estimate of $45 million,
the majority of which is scheduled to be spent in 2014.

Rainy River

Many
of New Gold’s first quarter
achievements were related to the successful advancement of the company’s Rainy
River project, located in northwestern Ontario.

The
company is pleased with the continued progress at Rainy
River, particularly as it relates to the current pricing
environment. In total, the cost of all expenditures and commitments made to
date has been in line with those estimated in the January 2014
Feasibility Study.

The
depreciation of the Canadian dollar relative to the U.S. dollar also continues
to benefit both the project development and operating costs which, in turn,
positively impacts the project economics.

The
Rainy River project enhances New Gold’s
growth pipeline through its manageable capital costs, significant production
scale at below current industry average costs and exciting regional exploration
potential in a great mining jurisdiction. The company looks forward to
providing further updates on the advancement of Rainy
River through the remainder of 2014.

Blackwater

The
company’s Blackwater
project is located approximately 160 kilometres southwest of the city of Prince
George in south-central British
Columbia. As previously disclosed, New
Gold plans to advance the project through the permitting phase in 2014.
The company views the potential of having Blackwater
fully permitted as further enhancing the value of the project.

In
the current commodity price environment, New
Gold plans to sequence the development of its projects with the near-term
focus being on the advancement of the lower capital cost Rainy
River project. Thereafter, the timing of Blackwater’s
development will be driven by prevailing market conditions over the coming
years. When New Gold has
obtained the requisite permits for both projects, the company believes it will
be best positioned to maximize its flexibility with respect to any future
development decisions.

New Gold looks forward to
providing updates throughout 2014 on both the permitting and exploration
initiatives that remain ongoing at Blackwater.

El
Morro

New Gold’s share of the El
Morro project provides the company with a 30% fully-carried interest in an
advanced stage, world-class copper-gold project in north-central Chile.
Under the terms of New Gold’s
agreement with Goldcorp Inc.
(“Goldcorp”), Goldcorp is responsible for funding New
Gold’s full 30% share of capital costs. The carried funding accrues
interest at a fixed rate of 4.58%. New
Gold will repay its share of capital plus accumulated interest out of 80%
of its share of the project’s cash flow with New
Gold retaining 20% of its share of cash flow from the time production
commences.

On
April 28, 2014, the Copiapo Court of Appeals lifted
the injunction which had temporarily suspended construction activity and
development works at the El Morro project. The injunction was originally
granted in November 2013 based on constitutional actions filed
by certain local communities and groups. After evaluating the constitutional
actions, the Copiapo Court of Appeals declared that there were no
grounds on which to accept the actions and they were rejected resulting in the
injunction being lifted.

Financial
Update

At
March 31, 2014, New
Gold’s cash and cash equivalents were $438 million,
representing a $24 million increase when compared to the
company’s 2013 year-end cash balance. At the end of the quarter the face value
of the company’s long-term debt was $881 million (book value – $865
million). The components of the long-term debt are: $300 million
of 7.00% face value senior unsecured notes due in April 2020; $500
million of 6.25% face value senior unsecured notes due in November
2022; and $81 million in El Morro funding loans,
repayable out of a portion of New
Gold’s share of El Morro cash flow upon the start of production. The
company had approximately 504 million common shares outstanding at March
31, 2014.

Webcast
and Conference Call

A
webcast and conference call to discuss these results will be held on Thursday,
May 1, 2014, at 10:00 a.m. Eastern time. A live audio
webcast will be available at www.newgold.com.
Participants may also join the conference by calling 1-647-427-7450 or
toll-free 1-888-231-8191 in North
America. To listen to a recorded playback of the call, please call
1-416-849-0833 or toll-free 1-855-859-2056 in North
America – Passcode 24448624. The archived webcast will also be
available at www.newgold.com.

Cautionary
Note Regarding Forward-Looking Statements

Certain
information contained in this news release, including any information relating
to New Gold’s future financial
or operating performance are “forward looking”. All statements in
this news release, other than statements of historical fact, which address
events or developments that New Gold
expects to occur are “forward-looking statements”. Forward-looking
statements are statements that are not historical facts and are generally, but
not always, identified by the use of forward-looking terminology such as
“plans”, “expects”, “is expected”,
“budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates”,
“projects”, “potential”, “believes” or variations
of such words and phrases or statements that certain actions, events or results
“may”, “could”, “would”, “should”,
“might” or “will be taken”, “occur” or “be
achieved” or the negative connotation of such terms. Forward-looking
statements in this news release include, among others, statements with respect
to: guidance for production, cash costs and all-in sustaining costs; the
results of the Rainy River Feasibility Study, including the expected
production, costs, grades, NPV, IRR and payback period; planned activities for
2014 at each of the company’s projects; the timing of permitting activities and
environmental assessment processes; and targeted timing for commissioning and
full production related to the New Afton mill expansion, Rainy
River and sequencing of Blackwater.

All
forward-looking statements in this news release are based on the opinions and
estimates of management as of the date such statements are made and are subject
to important risk factors and uncertainties, many of which are beyond New
Gold’s ability to control or predict. Certain material assumptions
regarding our forward-looking statements are discussed in this news release, New
Gold’s MD&As, its Annual Information Form and its Technical Reports
filed at www.sedar.com. In addition to, and
subject to, such assumptions discussed in more detail elsewhere, the
forward-looking statements in this news release are also subject to the
following assumptions: (1) there being no signification disruptions affecting New
Gold’s operations; (2) political and legal developments in jurisdictions
where New Gold operates, or may
in the future operate, being consistent with New
Gold’s current expectations; (3) the accuracy of New
Gold’s current mineral reserve and resource estimates; (4) the exchange
rate between the Canadian dollar, Australian dollar, Mexican Peso and U.S.
dollar being approximately consistent with current levels; (5) prices for
diesel, natural gas, fuel oil, electricity and other key supplies being
approximately consistent with current levels; (6) labour and material costs
increasing on a basis consistent with New
Gold’s current expectations; (7) permitting and arrangements with First
Nations and other Aboriginal groups in respect of Rainy
River and Blackwater
being consistent with New Gold’s
current expectations; (8) all environmental approvals (including the
environmental assessment process for the Blackwater
and Rainy River
projects), required permits, licenses and authorizations being obtained from
the relevant governments and other relevant stakeholders within the expected
timelines; and (9) the results of the feasibility studies for the Rainy River
and Blackwater
projects being realized.

Forward-looking
statements are necessarily based on estimates and assumptions that are
inherently subject to known and unknown risks, uncertainties and other factors
that may cause actual results, level of activity, performance or achievements
to be materially different from those expressed or implied by such
forward-looking statements. Such factors include, without limitation:
significant capital requirements; price volatility in the spot and forward
markets for commodities; fluctuations in the international currency markets and
in the rates of exchange of the currencies of Canada,
the United States,
Australia, Mexico
and Chile;
discrepancies between actual and estimated production, between actual and
estimated reserves and resources and between actual and estimated metallurgical
recoveries; changes in national and local government legislation in Canada,
the United States,
Australia, Mexico
and Chile or any
other country in which New Gold currently
or may in the future carry on business; taxation; controls, regulations and
political or economic developments in the countries in which New
Gold does or may carry on business; the speculative nature of mineral
exploration and development, including the risks of obtaining and maintaining
the validity and enforceability of the necessary licenses and permits and
complying with the permitting requirements of each jurisdiction in which New
Gold operates, including, but not limited to: in Canada,
obtaining the necessary permits for the Blackwater
and Rainy River
projects; in Mexico,
where Cerro San Pedro has a history of ongoing legal challenges related to our
environmental authorization (EIS); and in Chile,
where the courts have temporarily suspended the approval of the environmental
permit for El Morro; the lack of certainty with respect to foreign legal
systems, which may not be immune from the influence of political pressure,
corruption or other factors that are inconsistent with the rule of law; the
uncertainties inherent to current and future legal challenges New
Gold is or may become a party to; diminishing quantities or grades of
reserves and resources; competition; loss of key employees; additional funding
requirements; rising costs of labour, supplies, fuel and equipment; actual
results of current exploration or reclamation activities; uncertainties
inherent to mining economic studies including the feasibility studies for Rainy
River and Blackwater;
changes in project parameters as plans continue to be refined; accidents;
labour disputes; defective title to mineral claims or property or contests over
claims to mineral properties; unexpected delays and costs inherent to
consulting and accommodating rights of First Nations and other Aboriginal groups;
uncertainties with respect to obtaining all necessary surface and other land
use rights or tenure for Rainy
River; risks, uncertainties and unanticipated delays associated with
obtaining and maintaining necessary licenses, permits and authorizations and
complying with permitting requirements, including those associated with the
environmental assessment processes for Blackwater
and Rainy River.
In addition, there are risks and hazards associated with the business of
mineral exploration, development and mining, including environmental events and
hazards, industrial accidents, unusual or unexpected formations, pressures,
cave-ins, flooding and gold bullion losses (and the risk of inadequate
insurance or inability to obtain insurance to cover these risks) as well as
“Risk Factors” included in New
Gold’s disclosure documents filed on and available at www.sedar.com.

Forward-looking
statements are not guarantees of future performance, and actual results and
future events could materially differ from those anticipated in such
statements. All of the forward-looking statements contained in this news
release are qualified by these cautionary statements. New
Gold expressly disclaims any intention or obligation to update or revise
any forward-looking statements whether as a result of new information, events
or otherwise, except in accordance with applicable securities laws.

Technical
Information

The
scientific and technical information in this news release has been reviewed and
approved by Mark A. Petersen , Vice President, Exploration of New
Gold. Mr. Petersen is an AIPG Certified Professional Geologist and a
“Qualified Person” under National Instrument 43-101.

Non-GAAP
Measures

(1)
ALL-IN SUSTAINING COSTS

Consistent
with guidance announced in 2013 by the World Gold Council, an
association of various gold mining companies from around the world of which New
Gold is a member, New Gold
defines “all-in sustaining costs” per ounce as the sum of total cash
costs, capital expenditures that are sustaining in nature, corporate general
and administrative costs, capitalized and expensed exploration that is
sustaining in nature and environmental reclamation costs, all divided by the
ounces of gold sold to arrive at a per ounce figure. New
Gold believes this non-GAAP financial measure provides further
transparency into costs associated with producing gold and will assist
analysts, investors and other stakeholders of the company in assessing the
company’s operating performance, its ability to generate free cash flow from
current operations and its overall value. This data is furnished to provide
additional information and is a non-GAAP financial measure. All-in sustaining
costs presented do not have a standardized meaning under GAAP and may not be
comparable to similar measures presented by other mining companies. It should
not be considered in isolation or as a substitute for measures of performance
prepared in accordance with GAAP and is not necessarily indicative of cash flow
from operations under GAAP or operating costs presented under GAAP. Further
details regarding all-in sustaining costs and a reconciliation to the nearest
GAAP measures are provided in our MD&As accompanying our financial
statements filed from time to time on www.sedar.com.

(2)
TOTAL CASH COSTS

“Total
cash costs” per ounce figures are non-GAAP measures which are calculated
in accordance with a standard developed by The Gold Institute, a
worldwide association of suppliers of gold and gold products that ceased
operations in 2002. Adoption of the standard is voluntary and the cost measures
presented may not be comparable to other similarly titled measures of other
companies. New Gold reports
total cash costs on a sales basis. The company believes that certain investors
use this information to evaluate the company’s ability to generate liquidity
through operating cash flow and that this measure, along with sales, is
considered to be a key indicator of the company’s ability to generate operating
earnings and cash flow from its mining operations. Total cash costs include
mine site operating costs such as mining, processing and administration costs,
royalties, production taxes, and realized gains and losses on fuel contracts,
but are exclusive of amortization, reclamation, capital and exploration costs
and net of by-product sales. Total cash costs are then divided by ounces of
gold sold to arrive at a per ounce figure. Co-product cash costs remove the
impact of other metal sales that are produced as a by-product of gold
production and apportion the cash costs to each metal produced on a percentage
of revenue basis, and subsequently divides the amount by the total ounces of
gold or silver or pounds of copper sold, as the case may be, to arrive at per
ounce or per pound figures. Unless otherwise indicated, all total cash cost
information in this news release is net of by-product sales. These measures,
along with sales, are considered to be a key indicator of a company’s ability
to generate operating earnings and cash flow from its mining operations. This
data is furnished to provide additional information and is a non-GAAP financial
measure. Total cash costs and co-product cash costs presented do not have a
standardized meaning under GAAP and may not be comparable to similar measures
presented by other mining companies. It should not be considered in isolation
or as a substitute for measures of performance prepared in accordance with GAAP
and is not necessarily indicative of cash flow from operations under GAAP or
operating costs presented under GAAP. Further details regarding total cash
costs and a reconciliation to the nearest GAAP measures are provided in our
MD&As accompanying our financial statements filed from time to time on www.sedar.com.

(3) ADJUSTED NET EARNINGS

“Adjusted
net earnings” and “adjusted net earnings per share” are non-GAAP
financial measures. Net earnings have been adjusted and tax affected for the
group of costs in “Other gains and losses” on the condensed
consolidated income statement. The adjusted entries are also impacted for tax
to the extent that the underlying entries are impacted for tax in the
unadjusted net earnings from continuing operations. The company uses this
measure for its own internal purposes. Management’s internal budgets and
forecasts and public guidance do not reflect fair value changes on senior notes
and non-hedged derivatives, foreign currency translation and fair value through
profit or loss and financial asset gains/losses. Consequently, the presentation
of adjusted net earnings and adjusted net earnings per share enables investors
and analysts to better understand the underlying operating performance of our
core mining business through the eyes of management. Management periodically
evaluates the components of adjusted net earnings and adjusted net earnings per
share based on an internal assessment of performance measures that are useful
for evaluating the operating performance of our business and a review of the
non-GAAP measures used by mining industry analysts and other mining companies.
Adjusted net earnings and adjusted net earnings per share are intended to
provide additional information only and do not have any standardized definition
under IFRS and may not be comparable to similar measures presented by other
companies. They should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. The measures are not
necessarily indicative of operating profit or cash flows from operations as
determined under IFRS.

(4)
OPERATING MARGIN

“Operating
margin” is a non-GAAP financial measure with no standard meaning under
GAAP, which management uses to further evaluate the company’s results of
operations in each reporting period. Operating margin is calculated as revenue
less operating expenses and therefore does not include depreciation and
depletion. Operating margin is intended to provide additional information only
and does not have any standardized definition under IFRS; it should not be
considered in isolation or as a substitute for measures of performance prepared
in accordance with IFRS. Other companies may calculate this measure differently
and this measure is unlikely to be comparable to similar measures presented by
other companies.