26 WWWNEW G O L D C O M TSXNGD NY SE Am er ic an NG D Sustaining Capital Sus taining capital is a nonGAAP financ ial meas ur e as well as s us taining lease New Gold defines su stainin g ca pital as net capital e x pe nd itures that ar e intend ed to maintain o p e r ation of its go ld pro d u c ing assets A sustaining lea s e is simil a rl y a capital l ease paym ent that is sustai ning in nature To determi ne su stainin g ca pital expe ndit u re s Ne w G o ld uses cash fl ow relate d to mining intere sts from it s stateme n t of ca sh flows and dedu cts a n y expen ditures that are n on su stainin g or growth capital Manag ement use s su stainin g ca pital and othe r sustaini ng costs to u nde rs tand th e ag g r egate net re sult of the d r i v ers of allin su stainin g co sts othe r than total cash co sts Sustainin g capital and su st ainin g lea s e are intend ed to provi de addition al inf o rmatio n onl y doe s n o t have an y st anda rdi z ed meanin g un d e r IFRS a n d ma y not b e comp arable to similar me asu r e s pre s e n ted by other mining com panie s It should not be con s id ere d in isolatio n or a s a su bstitute for measure s of perform an ce prepa re d in accordan ce with IFRS Gro w th Ca pital Growth capit a l is a nonGAAP financi a l measure Ne w Gol d terms nonsustaini ng capital costs to be growth capit a l whi c h are capital expe nditure s to de velo p new op eration s or ca pital expe ndit u re s relate d to major proj ects at exi s ting operation s whe r e the s e proj ect s will materiall y increa se p r odu ction To determi ne g r owth capital exp enditu re s Ne w Gold u s e s cash flow rel a ted to mining inte re sts fro m its statement of ca sh flows and deduct s any expenditu re s that are sustaining ca pital Growth ca pital is intende d to provid e ad ditional information only doe s not have any stan dardize d meanin g under IFRS and may not be comp arabl e to similar measure s presented by oth e r mining co mpanie s It s hould not be con s id ere d in isolatio n or a s a su bstitute for measure s of perform an ce prepa re d in accordan ce with IFRS Allin Sustaining Costs per Gold Equivalent Ounce Allin sustaining costs per gold equi val e nt ounce is a nonG AAP measure based on guidance announced by the Wo rld Gold Co un cil WG C in Septembe r 20 13 The WG C is a non p r ofi t asso ciation of the world s leading gold mining companies es tablished in 1987 to pr omote the us e of gold to indus t r y consumers and inve stors Th e WGC is n o t a regulatory bod y and doe s not have the authority to develop accou n ting stand ard s o r disclo sure re quire ment s The WGC h a s wo rked with its membe r compani es in cludi ng New Gold to dev e lop a meas ure that ex pands on IFRS m easures s u c h as operating ex pens es and nonGAAP measures to pro v ide vi sibil i ty into the economi cs of a gold minin g com pan y Current IFRS me asu r e s u s ed in the gold ind u stry su ch as operatin g expen se s do not capture all of the expen d i tures in cu rre d to disco ve r develop and sustain gold p r odu ction Ne w Gol d belie ves t he allin sustaini ng co sts mea s u r e provid es fu rthe r transpa ren cy into costs a s soci ated wit h produ cin g gold and will assi st analysts inve sto r s and other stakehol ders of the Compa n y in asse ssi ng its operati ng perfo rman ce its ability to generate free ca sh flow from cu rre nt operation s and its ove r all value In addition the Compen sation Committee of the Board of Dire cto r s use s allin su sta i ning co sts togethe r with other mea s u r es in its Compan y score c ard to set ince ntive com pen sation g o a ls an d asse ss perfo rma n ce Allin su staini ng co sts pe r gold equi val e nt ounce i s in tende d to pro v ide addition al informatio n only and d o e s not have an y stand ardi ze d meanin g und er IFRS and may not be co mparable to similar mea s u r es pre s e n ted by othe r mini ng com panie s It should not be con s id ered in isolat ion or as a substitute for measures of perfo rman ce prep ared in a c cord an ce wi th IFRS The me a s ure i s not ne ce ssari l y indi cati ve of ca sh flo w from ope ratio n s un der IF RS or operatin g co sts p r e s e n ted und er IF RS Ne w Gol d de fines all in su stainin g cost s pe r g o ld e q u ival ent ou nce as the sum of t o t a l ca sh co st s n e t capital e x pen diture s that are su stainin g in nature corporate ge neral and admini s trati v e co sts capitalize d and e x p e n s e d exploration that is su stai ning in nature lease pa yments th at are su staini ng i n nature and envi r on menta l reclam ation co sts all divid ed by the tota l gold equivale nt ounce s sold to arrive at a per oun ce