Ontario Teachers’ Pension Plan has signed a US$300-million deal investment deal with New Gold Inc.

Under the agreement, the pension fund will acquire a 46 per cent free cash flow interest in the New Afton gold-and-copper mine.

Ontario Teachers’ has an option to convert the interest into a 46 per cent joint venture interest after four years or have their investment remain as a free cash flow interest at a reduced rate of 42.5 per cent.

New Gold says the cash will be used to improve its financial flexibility and to reduce debt.

The New Afton mine is located 10 kilometres west of Kamloops, B.C.

New Gold will retain 100 per cent of the exploration claims outside of the New Afton mining permit area and has granted Ontario Teachers’ an option to acquire its proportionate share of the claims upon conversion into the joint venture interest.