Westfield cashed up after asset sale

During the same period last year, Westfield’s net income was $1.7 million or 12 cents per share. Results for 1989 include a $7.4- million increase in eq uity in the earnings of associated companies while 1988 figures include a $1.7- million gain on the sale of a resource property.

Westfield reported a third-quarter loss of $365,000 or 4 cents per share, compared with a loss of $177,000 or 1 cents per share at the same time last year.

The Toronto company recently sold its 35% stake in the Choquelimpie gold mine in Chile to Northgate Exploration (TSE) along with its other North American and European mining assets in exchange for $24.5 million in cash, including a $4-million dividend.

As part of the agreement, Westfield also sold to Northgate its 51% interest in Norwest Holdings, a company set up to hold the 15% stake of Westfield and Northgate in an Australian gold producer. In return, Westfield received $14.5 million (consisting of $6 million cash and an $8.5 million debt repayment due to Northgate).

Minority shareholders of Westfield have been critical about the sale of the Choquelimpie mine which is expected to produce 100,000 oz next year at a cost of less than $200(US) per oz.

The mine produced 25,000 oz gold and 135,880 oz silver in the three months ended Sept 30, compared with 22,000 oz gold and 130,000 oz silver in the second quarter of this year. With reserves of about 7.7 million tons grading 0.058 oz gold per ton, costs are running at $217(US) per oz compared with $225 in the previous quarter.

Westfield now has $25 million in cash, no debt and about $40 million in assets due to its 10% stake in Northgate.

According to President Danesh Varma, Westfield has filed a notice of intention to make a normal course issuer bid entitling it to repurchase up to 875,000 of its common shares.

The shares may be repurchased via open-market transactions from Dec 12, 1989, until Dec 11, 1990. Westfield currently has over 17.5 million shares outstanding.

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