By James Peters

New Afton Mine

New Gold closes $300M deal with Ontario Teachers’ fund for interest in New Afton mine

Mar 31, 2020 | 10:18 AM

KAMLOOPS — A proposed deal between New Gold and the Ontario Teachers’ Pension Plan (OTPP) has now closed, resulting in a big cash infusion for the New Afton mine west of Kamloops.

In February, New Gold announced it had a deal in place with OTPP, meaning the fund will acquire a 46 per cent “free cash flow” interest in the mine in exchange for $300 million in cash up front.

Tuesday (Mar. 31), New Gold says the deal is now final.

OTPP is one of Canada’s most recognizable investors, with nearly $200 billion in worldwide assets.

As part of the deal, in 2024 OTPP will have the option to convert its cash flow interest into a partnership interest, with New Gold retaining 54 per cent ownership of the Kamloops-area mine.

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However, New Gold will retain the option of buying back 100 per cent interest.