While Westfield Minerals (TSE) recently reported a small first-quarter profit, it is suffering the effects of a decision made in 1989 to sell its mining assets to Northgate Exploration (TSE).
Since the sale was completed, Westfield’s 17.6 million issued shares have fallen to around 75 cents from a high of $2.10 in 1989.
As the Westfield board has determined that the current market price of the shares doesn’t accurately reflect the underlying value of its assets, it has elected to buy back some of those shares.
As a result, the board has approved a normal course issuer bid under which Westfield plans to purchase up to 750,000 shares representing 4.3% of those outstanding. The bid is subject to regulatory approval.
Meanwhile, during the three months ended March 31, Westfield reported net income of $473,467 or three cents a share, compared with net income of $461,710 or three cents a share in the same period last year.
Westfield’s first-quarter revenues dropped slightly to $527,419 from $545,164 in the year-earlier period.
Having angered minority shareholders by selling its 35% interest in the Choquelimpie gold mine in Chile to Northgate, Westfield derives its earnings from interest and dividends on $25 million in cash and short-term securities.
It continues to participate in its former mining assets via a 16% stake in Northgate.
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