Westfield reports ’89 profit after selling Chilean asset

Westfield Minerals, (TSE) the company that angered shareholders by dealing its stake in a Chilean gold mine to Northgate Exploration (TSE), managed to report a profit last year. Westfield’s net income for the year ended Dec. 31 was $4.6 million or 28 cents a share, compared with a loss of $4.2 million or 28 cents a share for the same period in 1988.

Revenues in 1989 decreased slightly to $1.6 million from $1.8 million in 1988.

President Danesh Varma attributed the improved income picture to $7.4 million from equity in earnings of associated companies. At year-end, Westfield had $25 million in cash, no debt and assets valued at $40 million including a 10% stake in Northgate.

However, a group of dissident shareholders of Westfield are still pressing Ontario regulators for an investigation of events surrounding the sale of Westfield’s 35% stake in the Choquelimpie gold mine.

The interest was sold along with Westfield’s other mining and exploration properties for $24.5 million, at a price which some shareholders say undervalued the Chilean asset.

According to Northgate’s annual report, Choquelimpie produced 89,400 oz. gold and 620,000 oz. silver in 1989 at a cost of US$2.30 per oz.

As part of the transaction, Northgate also bought Westfield’s 51% stake in Norwest Holdings for $6 million cash and a $8.5-million debt repayment due to Northgate. Norwest was set up to hold the combined interests of Northgate and Westfield in Australian gold miner Whim Creek Consolidated.

“As minority shareholders, we are aggrieved and frustrated by this transaction as no independent evaluation was made to determine the value of those assets,” says a committee set up to represent the shareholders.

While Northgate has said all along that the allegations are false, the transaction was completed without any consultation with or referral to the minority shareholders, the committee says.

Westfield is now regarded as a holding company rather than the gold producing mining and exploration company it was before the transaction was completed.

According to Varma, Westfield intends to look for opportunities where it can concentrate its resources on making significant investments in the mining sector. Westfield Minerals (TSE) $000s except per share items Year ended Dec. 31 1989 1988 Revenue $1,648 $1,838 Net earnings (loss) 4,607 (4,199 )

per share 0.28 (0.28 )