SOURCE: Newgold, Inc.

June 23, 2006 11:45 ET

Newgold Announces Initial Results From Heap Reprocessing Study at Relief Canyon

SACRAMENTO, CA -- (MARKET WIRE) -- June 23, 2006 -- Newgold, Inc. (OTCBB: NGLD) announced that it is studying several options at its Relief Canyon Mine for reprocessing the heaps remaining from gold mining operations on the property done in the 1980s. Preliminary sampling suggests that the effort of creating a new leach pad, regrinding material on existing pads to a 3/4" size, agglomerating and restacking could achieve acceptable returns on investment, and provide cash flow for advancement and expansion of previously identified potential resources.

Scott Dockter, Chairman and CEO of Newgold, said, "As we have been performing various reclamation tasks at Relief Canyon it has become apparent that there is a reasonable amount of unprocessed ore on the existing heaps. We are continuing to evaluate the economic viability of reprocessing this material. We estimate there is in excess of 8 million tons of material currently on the heaps, while the contained gold would be less than if the material was freshly mined the cost of recovery and processing would also be substantially less."

Approximately 50% of the material, by simple sieve analysis determination, is greater than 3/4" in size. To better understand the portion of gold in that fraction, and how much gold could be recoverable, McClelland Laboratories, Inc. of Reno Nevada has been retained to perform cyanide leach amenability tests. Newgold, Inc. is pleased to announce preliminary results from a cyanide column leach test (P-1) on the greater than 3/4" re-crushed material from a 55 gallon drum bulk sample taken randomly from the heaps at Relief Canyon, with an initial triple analysis average 0.016 OPT (0.55 GPT) Au. McClelland Laboratories, Inc. has reported a 38% recovery after 27 days of leaching (solution applied 0.92 lb/ton ore (0.5 lb/ton NaCN and 0.5 lb/ton lime)), with a smooth recovery rate curve. No agglomeration has been done to this test (P-1). This is inline with anticipated recoveries.

Other aspects of the heaps reprocessing study have included over 200 samples that were collected to help characterize the gold distribution in the heaps. 30 gram Fire Assay analysis was performed on the entire sample at American Assay Labs in Sparks Nevada. An overall Mean of 0.0124 OPT Au was obtained.

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Safe Harbor Statement

The matters discussed in this release contain forward-looking statements within the meaning of Section 221E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve risks and uncertainties. Although Newgold believes that the expectations reflected in such forward-looking statements are reasonable, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Newgold cautions investors that any forward-looking statements made by Newgold are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those reflected in forward-looking statements include, but are not limited to, risks and uncertainties regarding the actual mineralization of Newgold's mining heaps , the unproven nature of and potential changes to the sample analysis determination, the risk that the capital and other resources that Newgold will need to exploit its existing heaps will be more than anticipated, and other risks discussed in Newgold's Form 10K-SB and in Newgold's other filings with the Securities and Exchange Commission.

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