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A new horizon for artists is an old substance-paper, says Teresa Olabuenaga.

”There are a lot of artists all over the world working with paper and investigating their own paper fibers,” says the 33-year-old contemporary artist who also works in etchings and sculpture that is a mixture of paper and Mexican barro, or clay.

Her novel work, an intermingling of collage and oil on handmade paper, will be on display in a group show of new talent at Gilman/Gruen Galleries, 226 W. Superior St., until Aug. 31.

”My paintings are really collages-I mix the paint with the paper fibers; there`s no glue,” she says. ”The paper is really like a textile because I`m weaving with plant fiber.”

She says she is ”one of four or five young Mexican artists” (excluding the Otomi Indians) working in new ways with paper.”

Indigenous Mexican people ”made paper long before the Spanish conquest,” she says. There is still a village, San Pablito, in the state of Puebla, where five Otomi Indian families devote themselves to making amate bark paper from the xonote tree, a kind of ficus.

Olabuenaga was one of a few Spanish-speaking people who have learned from the Otomis-who speak their own dialect-how to make amate.

She also lived in Japan for three months in 1989, learning how to make kozo, Japanese paper.

”There exist eight methods of papermaking worldwide and I know six-Mexican, Japanese, Korean, Butanese, European and Nepalese.”