Newfields sees cash-flow start by late 1987

Chelsea Resources, a company associated with Newfields Minerals, is looking at a production startup date of July 1988 on its 55%-owned Spotted Horse gold mine in Montana, a former producer active in the 1800s.

By the time production begins, Chelsea expects to have increased its interest in the underground mine to 60%. Newfields expects to increase its 25% interest in the property to 30%. Cimarron Exploration, the operator, would hold a 10% interest.

With the mine expected to produce 14,000 oz of gold annually, Chelsea would receive about 9,000 oz, Newfields 4,000 oz and Cimarron 1,000 oz.

Newfields President Dan Clark says his company’s 100% Margarita mine near Tucson, Ariz., is also expected to start production in late 1987 and should produce about 10,000 oz annually. Altogether, that would give Newfields about 14,000 oz of gold production annually at an estimated average cost of $140 (US) per oz. With just 4.3 million shares outstanding, he forecasts a cash flow of 60 cents -70 cents per share.