November 27, 2014

Dear Shareholder, 

You are invited to attend a special meeting (the "Meeting") of holders ("Bayfield Shareholders") of common shares (the "Bayfield Shares") of Bayfield Ventures Corp. ("Bayfield") to be held at 2200 HSBC Building, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8 on December 29, 2014 at 8:30 a.m. (Vancouver time).

At the Meeting, you will be asked to consider and vote upon the arrangement (the "Arrangement") contemplated by the arrangement agreement entered into between Bayfield and New Gold Inc. ("New Gold") dated November 10, 2014, pursuant to which  holders of Bayfield  Shares will receive, for  each Bayfield Share held, 0.0477  (the "Exchange Ratio") of a common share of New Gold (a "New Gold Share").

After taking into consideration, among other things, the fairness opinion of Primary Capital Inc. delivered as of November 7, 2014, and the recommendations of the special committee of the board of directors of Bayfield (the "Bayfield Board"), the Bayfield Board has unanimously concluded that the Arrangement is in the best interests of Bayfield and is fair to the Bayfield Shareholders and has approved the Arrangement. Accordingly, the Bayfield Board unanimously recommends that the Bayfield Shareholders vote FOR the Arrangement. The attached management information circular (the "Circular") contains a detailed description of the reasons for the determinations and recommendations of the Bayfield Board.

The consideration offered to Bayfield shareholders represents a premium of 47% per Bayfield Share based on the 20-day volume-weighted average trading price ("VWAP") of Bayfield Shares on the TSX Venture Exchange (the "TSXV") and the VWAP of New Gold Shares on the Toronto Stock Exchange (the "TSX") as of November 7, 2014, and a 50% premium to Bayfield and New Gold's respective closing prices on the TSXV and TSX on November 7, 2014, the last trading day prior to announcement of the Arrangement.

All of the directors and executive officers of Bayfield as well as another large shareholder have entered into voting and support agreements with  New Gold pursuant to which they  have agreed, subject to the terms  of those agreements, to vote in favour of the Arrangement. These shareholders hold, in aggregate, 2,591,003 Bayfield Shares, which represent 3.3% of Bayfield's issued and outstanding common shares. 

All outstanding Bayfield stock options will expire two business days prior to the effective date of the Arrangement and all Bayfield optionholders must either exercise or surrender their options to Bayfield prior to such time. Bayfield's outstanding warrants will be adjusted in accordance with their terms such that, where such warrants are exercised after completion of the Arrangement, the holder will receive New Gold Shares based on the Exchange Ratio in lieu of Bayfield Shares.

Upon completion of the Arrangement, New Gold will have approximately 508,766,179 New Gold Shares issued and outstanding, with former Bayfield Shareholders holding approximately 0.8% of the total outstanding basic shares of New Gold.

In order to become effective, the Arrangement must be approved by a resolution passed by at least two-thirds of the votes cast at the Meeting, in person or by proxy, by Bayfield Shareholders. In addition, the Arrangement resolution must be approved by a majority of the votes cast by Bayfield Shareholders excluding persons whose votes may not be included in determining minority approval of a business combination pursuant to Multilateral Instrument 61-101- Protection of Minority Security Holders in Special Transactions. As well, completion of the Arrangement is subject to certain conditions, including the approval of the Supreme Court of British Columbia (the "Court"), which are described in the attached Circular. 

The attached Circular contains a detailed description of the Arrangement and includes certain other information to assist you in considering the Arrangement. You are urged to carefully consider all of the information in the accompanying Circular. If you require assistance, you should consult your own financial, legal or other professional advisors. Your vote is important regardless of the number of Bayfield Shares you own.

While certain matters, such as the timing of the receipt of the approval of the Court, are beyond the control of Bayfield, if the resolution approving the Arrangement is passed by the requisite votes of Bayfield Shareholders at the Meeting, it is currently anticipated that the Arrangement will be completed and become effective on or about January 1, 2015.

Bayfield has retained Kingsdale Shareholder Services ("Kingsdale") to assist in securing the return of completed proxies and to solicit proxies in favour of the resolution approving the Arrangement. If you have any questions, please contact Kingsdale by email at or by telephone at 1-866-581-1477 (toll free within North America) or 416-867-2272 (outside of North America).

Sincerely,

"JamesG. Pettit"

Chairman and Chief Executive Officer

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