Westfield to acquire Chilean gold property

While it will be later this month before the full details are revealed, Westfield Minerals is close to buying into a promising gold-silver property in Chile.

Westfield has reached an agreement, in principle, with a major international mining company and a U.S. financial institution allowing Westfield to participate in the completion of current feasibility studies for the future development of the Chilean project.

The announcement was made at Westfield’s recent annual meeting by Chairman Patrick Hughes. “We hope to close the deal by the end of this month,” said Mr Hughes who claims the property could be in production by the first quarter of 1988.

Gold-silver resources on the property are said to include 5.4 million metric tons of oxide ores, which can be treated by low cost open pit, heap leach and agitation leach methods. The main deposit has yet to be completely delineated by drilling and the concession, on which it is located, contains several other gold- silver mineralized zones which have yet to be fully explored.

Westfield’s interest in the project will be close to 35% and it is expected to produce 60,000 oz of gold equivalent per year for eight to ten years. “We are very enthusiatic about this venture,” said Executive Vice-President Peter McAlleer who is waiting for the necessary documentation to be translated from Spanish to English.

Should negotiations prove successful, the property will add to Westfield’s portfolio of resource investments. During 1986, Westfield conducted mineral exploration on several properties in Newfoundland, Ontario, Quebec and Manitoba. It also participated in the W.X. joint venture syndicate (Westfield 25%) which is exploring for precious metals in the United States.

Underground development started at the Little Bald Mountain heap leach gold operation in Nevada (WX Syndicate 43%) which produced 4,300 oz from open pit ore during 1986.

Identified open pit reserves were exhausted during the year and a decision was made to proceed with the development of the underground ore body. Underground reserves currently stand at 325,000 tons grading 0.15 oz gold per ton.

Westfield’s l986 Canadian mineral exploration program concentrated on gold exploration in Newfoundland, Ontario and Manitoba. A drilling program is underway at two properties in the Pickle Lake district of northern Ontario. Extensive groundwork on the Dempster Lake property located near the St. Joe Canada’s Golden Patricia deposit, has revealed surface values as high as O.56 oz gold per ton over 3ft.

Drilling has also started on the Arseno Lake property which covers a wide shear zone hosting polymetallic massive sulphides and arsenopyrite-gold mineralization.

Surface samples assay up to 4.9% lead, 3.6% zinc, 8 oz silver and 0.032 oz gold. Both properties are part of a joint venture comprised of Northern Dynasty, 30%, Westfield, 50%, and Dunlop Explorations with 7.5%.

Through its holdings in Whim Creek and Northgate Exploration, plus a 37% holding in Ennex International which is involved in a gold discovery in the Sperrin Mountains of Northern Ireland, Westfield also has interests in metal mining outside Canada.

Ennex International, in which Westfield has a 37% interest, has outlined an ore reserve of one million tons of 0.3 oz gold in Northern Ireland and underground development is expected to start soon.

Westfield recorded a net income loss of $2.4 million or 25 cents per share for the year ended Dec 31, l986. That compares with income of $1.08 million or 14 cents per share for the same period last year.

Westfield shares were trading recently at $3.75 on the Toronto Stock Exchange, below its 52-week high of $4.85 but well above its $1.10 low point. The company plans to spend $2 million in l987 for exploration programmes in Canada and the United States.