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Growing Our Communities

Our goal is to be a catalyst for increased quality of life and a contributor to sustainable development within our host communities. To this end, we foster open communication with residents and community leaders, from a project’s earliest development phase, through the mine’s life and after closure. We believe that it is important to thoroughly understand the people, their histories, and their aspirations as well as their needs and concerns, so that can we truly engage and contribute to healthy communities and long-term social, cultural and economic development.

Our people become involved at every level – with local and regional government, business, schools, healthcare and recreational organizations. We actively participate in community organizations, host community events, and seek to connect with people’s priorities and concerns.

Our economic contributions benefit communities and regions in many forms. There are taxes and royalties, but there is also the impact of the salaries brought home by hundreds of employees and contractors. In addition, we strive to source our services and supplies locally whenever it is practical. Local communities often benefit from improvements that our operations make to roads, water, energy and network infrastructure, as well as to local schools and health facilities.

As highlights in 2012, we received the Developer of the Year Award and were named one of the “Province's Most Caring” at the British Columbia Natural Resource Forum for work completed at the Blackwater Project, New Afton won the 2012 Industry Council for Aboriginal Business Recognition – Corporate Champion for Aboriginal Business Award, and Cerro San Pedro was accredited, for the third consecutive time, as a Socially Responsible Company by the Mexican Center for Philanthropy.

Scorecard 3:
Community Engagement
and Development

Target Achieved Target in Progress Target Missed
Priorities Target 2012 Performance 2012 Target 2013
Engagement Update stakeholder maps of all operations. Develop stakeholder map for Blackwater. All sites created or updated stakeholder maps. Formalize and implement engagement and communications plan at all sites.
Feedback and Complaints Formalize external grievance procedures at New Afton and Mesquite. Both sites have implemented grievance procedures. Formalize external grievance procedures at Blackwater.
Local Economic Impacts Develop Cerro San Pedro Sustainable Development Program. A Community Engagement and Development Manager was hired to develop and manage the Cerro San Pedro Sustainable Development Program. The initial planning phase was completed; the information gathering and analysis phase was initiated and is ongoing. Continue to implement the Cerro San Pedro Sustainable Development Program.

Work with Blackwater Community Liaison Committee to identify opportunities for maximizing local economic impacts.

Community Engagement

At New Gold, community engagement begins while a project is in the development stage, and continues through the mine’s life and after closure. We foster open communication with local residents and community leaders and strive to be a full partner in the long-term sustainability of the communities and regions in which we operate. Our engagement activities are guided by the Mining Association of Canada’s Towards Sustainable Mining (TSM) protocol on outreach performance. TSM guides us to identify our stakeholders, effectively engage and maintain dialogue, maintain a feedback mechanism and report on performance.

While all of our sites encompass local community engagement, we recognize that there are challenges in this area, and that there remains work to do in implementing it consistently across our sites. We are addressing these issues through the development of a Community Engagement and Development Management System, which is being designed to improve consistency across our operations.

New Gold sites share information regarding operations and upcoming activities with local communities and other stakeholders and groups. We use a variety of communication methods including community presentations, open houses, one-on-one meetings, letters, media ads, and newsletters. All operations produce their own Sustainability Reports which are presented and distributed locally. Socio-economic impact assessments have been completed or are currently being carried out at three of our sites.

Throughout a project’s life cycle, we regularly host meetings with local residents and leaders in order to remain connected to the communities and their priorities and concerns, and to help resolve existing or potential disputes. New Gold sites regularly hold open houses and provide mine tours to a wide variety of educational institutions, regulators, investors and community groups.

Wherever our operations interact with Indigenous peoples, we endeavour to understand and respect traditional values, customs and cultures. We take meaningful action to serve their development needs and priorities through collaborative agreements aimed at creating jobs, training and lasting socio-economic benefits. Four of our sites are adjacent to or in Indigenous peoples’ asserted traditional territories. In our entire history, New Gold has not recorded any incidents of violations involving rights of Indigenous peoples at any of our sites.

Feedback Mechanisms

We maintain open channels through which complaints and suggestions can be received and addressed. Only through respectful, mutually beneficial dispute resolutions can we maintain our meaningful, trust-based relationships with our local communities and other stakeholders. All 2012 complaints filed through our grievance mechanisms have been processed and resolved. At the end of 2012, we reached our target of establishing formal external grievance mechanisms at all our operations.

At Cerro San Pedro, we received four complaints related to labour practices associated with our employees or contractors through our external grievance mechanism, and one through the whistleblower system. These complaints were addressed with much consideration. We have completed investigations and management reviews, and have taken corrective action where appropriate. Five additional external complaints filed through this mechanism were associated with a perceived lack of employment opportunities to the communities in close proximity to the mine site. At Cerro San Pedro, approximately 50% of the employees are from the 13 small communities that make up the municipality of Cerro de San Pedro – where the mine is located – and the other half are from San Luis Potosí, the state capital city, located about 20 kilometres from the mine site.

At Peak Mines we received four external complaints related to vibration from blasting. The mine has engaged a professional to investigate opportunities to reduce the impacts of blasting operations to the neighbouring properties.

External Grievance Process – 2012 Complaints1

SITES 2012 2011 2010
Peak Mines 4 4
Cerro San Pedro 9 2 n/a

1 Grievance mechanisms have been in place at Cerro San Pedro since 2011 and were established at Mesquite and New Afton late 2012.

Very few complaints have ever been received via our grievance mechanisms–and none of the complaints received have ever related to human rights, land use, or the customary rights of local communities and Indigenous peoples.

Cultural dance presentation at Cerro de San Pedro village. Cerro San Pedro is a proud supporter of activities which promote cultural heritage within our host communities.

Community Development and Economic Impacts

At all times, we strive to leave a positive legacy in our host communities. This commitment to local socio-economic sustainability is demonstrated in the significant opportunities for local employment, investments we made in community infrastructure projects, facilitating local entrepreneurship, as well as capacity building and economic diversification projects.

We preferentially hire locally, and engage local services and suppliers whenever it is practical. This is a powerful tool for creating direct and indirect economic benefits for local communities, and very often, hiring and purchasing locally makes good business sense. For example, at Cerro San Pedro, our safety vests and sun hats are sourced from an independent seamstress resident of the village of Cerro de San Pedro. At Blackwater, our core boxes (boxes that store core samples) were manufactured by a local First Nations business. In 2012, we made the decision to locate the Blackwater project’s Sample Preparation Laboratory in Vanderhoof, which has provided jobs, training, and indirect economic impacts to the town. These were some of the good business decisions that provided us with high-quality products and skilled labour, without the delays and expenses of sourcing products and services from further away.

New Gold has generated direct and indirect economic value in our host communities. Payments in employees’ wages and benefits increased from approximately $129 million in 2011 to over $180 million in 2012 (includes all sites and corporate offices). Income and mining taxes paid to governments also increased, from about $98 million to over $100 million. Royalty payments totaled approximately $19 million, also an increase from approximately $16 million in 2011.

All New Gold sites actively participate in and support community building and economic diversification initiatives. We continually seek opportunities to support community organizations and activities with a special focus on encouraging local entrepreneurship to promote diversified, sustainable economic prosperity.

Over the year, our sites and employees contributed to numerous cultural events, sports events, and community clean-up activities, as well as initiatives to encourage recycling and healthy lifestyles. Our sponsorships and donations supported education, health and wellness, economic diversification, job creation and food banks.

At the corporate level, our Corporate Donations Committee meets on a quarterly basis to review requests, with a priority on health, education and community development investments. This year we supported a range of initiatives and organizations such as the Clinton Giustra Sustainable Growth Initiative and its micro-enterprise initiatives, Indspire, the Heart and Stroke Foundation, Pacific Salmon Foundation, MineralsEd and a variety of local community programs in British Columbia and Ontario. In 2012, New Gold invested nearly $4.2 million in community investments and projects, donations and sponsorships, approximately a 20% increase from 2011.

Economic Values Generated and Distributed in 2012 ($ millions)1

Revenues 791.3
Operating costs2 839
Employee wages and benefits (includes taxes) 180.2
Payments to providers of capital (interest paid and standby fees) 22
Payments to governments 100.6
Community investments3 4.2
Community Investments ($ millions)

1 Unaudited figures. Additional information on economic values, and site-specific economic value generated, are disclosed in our Financial Review available on our website.

2 Payments for materials, products and services. Also includes $20.6 million in exploration and business development expenditures.

3 As defined in the GRI EC1 Protocol. Expenditures for voluntary donations and investment of funds in the broader community where the target beneficiaries are external to the company. These include contributions to charities, NGOs and research institutes (unrelated to the Company’s commercial R&D), funds to support community infrastructure and direct costs of social programs. Include sites as well as corporate offices’ community investments.

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View from the Blackwater project’s area. Our community development initiatives in Aboriginal communities near Blackwater made great strides in 2012.

Working with Aboriginal People

In Canada, we have been recognized for excellence in Aboriginal Relations and as an advocate for entrepreneurship and economic development within Aboriginal communities.

Our community development initiatives in Aboriginal communities near Blackwater made great strides in 2012. Two Exploration Agreements were finalized, and we made progress towards a Participation Agreement with one First Nations band. These positive relationships have already facilitated considerable employment and contracting opportunities, including a multi-million-dollar contract to clear the land for our exploration site, which is being completed by a local Aboriginal company.

In 2012, New Afton initiated another significant component of its Participation Agreement: the first production-based royalty payments were paid to the local bands. This form of direct revenue sharing has, we believe, been critical to the trust-based relationships that we continue to maintain with Aboriginal communities surrounding New Afton.

In 2012, New Afton expenditures with local Aboriginal businesses more than doubled – we made payments of over C$14.5 million to almost 30 Aboriginal businesses, compared to nearly C$7 million to about 20 businesses in 2011. At Blackwater, we made payments of over C$6 million in Aboriginal contracts. On December 31, 2012, 21% of Blackwater and 23% of New Afton employees were Aboriginal.

Education, Training and Development

Education and training of local community members are key to our policy of preferentially hiring locally, and sourcing services and supplies from nearby. In communities where the required skill sets and/or work experience are in short supply, we provide major funding for education and training. We also offer numerous apprenticeship programs to help young workers on their path to a career in mining.

In British Columbia, for example, our support for the Underground Miner Training Program, and founding support for the British Columbia Aboriginal Mine Training Association have resulted in many local Aboriginal residents beginning successful careers.

Our employee development policies extend to mine and Company management. We encourage employees with a promotion-from-within approach and support for continuing education and professional development. In our view, these are essential components for a stable, productive and profitable enterprise that takes into account the interests of all stakeholders, both internal and external.