Timberline Resources Corporation (TSX VENTURE:TBR)(NYSE
MKT:TLR)(NYSE Amex:TLR) ("Timberline" or the "Company") announced
today that its joint venture partner, Highland Mining, LLC
("Highland") has sold its 50-percent interest in Butte Highlands
JV, LLC ("BHJV") to Montana State Gold Company, LLC ("MSGC"), a
privately-owned Montana limited liability company. Highland will
continue to be Timberline's 50-percent joint venture partner at its
Butte Highlands Gold Project, with MSGC funding development of the
underground gold mine up to the commencement of commercial
production. As a result of this sale, Timberline's
previously-announced non-binding letter of intent to acquire
Highland's interest in BHJV has terminated.
Timberline will continue to own a 50-percent
carried-to-production interest in BHJV, as it has since the
inception of the joint venture to develop Butte Highlands. MSGC has
acquired Highland's loan in the amount of approximately $24-million
for development costs incurred at Butte Highlands to-date and will
fund all remaining mine development costs through to commercial
production. MSGC's funding source is ISR Capital, a private
investment and merchant-banking firm headquartered in Boise, Idaho.
Both Timberline's and MSGC's shares of development costs, including
the loan acquired by MSGC, will be repaid from proceeds of future
mine production.
Paul Dircksen, Timberline's Chief Executive Officer, said, "We
are pleased to welcome MSGC as our partner at Butte Highlands.
While we had earlier anticipated gaining 100-percent ownership of
the project, Ron Guill's decision to sell Highland Mining to a
well-funded organization with a mandate to create jobs through
commercial production provides Timberline and its shareholders with
an attractive alternative. We now envision the achievement of
production at Butte Highlands without assuming the development risk
and without dilutive equity financing, burdensome debt financing,
or the sale of valuable royalties that would have inevitably been
required had we funded mine development ourselves. Rather, we are
effectively in the same position as we were with Ron; we have a
50-percent carried-to-production interest at Butte Highlands while
we advance our Lookout Mountain gold project in Nevada toward
production.
Ron Guill, a Timberline Director, Timberline's largest
shareholder, and prior owner of Highland Mining, said, "I believe
that this transaction is in the best interest of Timberline's
shareholders. We have created a new partnership that will fully
fund the BHJV through the final permitting phase, the remaining
development, and into commercial production. I have full confidence
in the Timberline team to guide this project through the remaining
steps and into full-scale gold production, and in the MSGC team who
are committed to creating jobs by providing the necessary funding.
I intend to remain involved as a significant investor and as an
advisor and Director of Timberline."
Mr. Dircksen continued, "Timberline has led the permitting
efforts at Butte Highlands since early this year. While the details
of an amended BHJV operating agreement with MSGC are still being
worked out, we expect to maintain the momentum we have gained
through frequent and productive discussions with the regulators by
continuing to take the lead role in all permitting discussions,
meetings, and activities until we receive our operating permit. We
expect that we will receive the operating permit in mid-2013 and
that gold production will commence soon after."
As announced previously, the initial mine plan at Butte
Highlands targets production of approximately 400 tons per day for
the first four to five years of operation with the mineralized
material expected to be direct shipped to a nearby mill,
eliminating the immediate need to permit, finance and construct a
mill. Development and permitting progress achieved at the project
to-date includes:
-- Permitting complete for surface facilities construction, underground
drilling and development, and a 10,000-ton bulk sample;
-- Production infrastructure and surface facilities are substantially
complete;
-- Mine development is advanced, with more than 4,000 feet of underground
workings complete;
-- 50,000-foot underground drill program to support initial mine planning
complete;
-- Water discharge (MPDES) permit application is complete and permit
expected Q4 2012;
-- Haulage road special use permit in process and expected Q4 2012;
-- Hard Rock Operating Permit final amendments to be completed in Q3 2012
with permit issuance expected in mid-2013;
-- Gold production expected to commence in mid-2013.
Butte Highlands is located approximately fifteen miles south of
Butte, Montana within a favorable geologic domain that has hosted
several world-class, multi-million ounce gold deposits including
Butte, Golden Sunlight, Montana Tunnels, and Virginia City. The
property was extensively drilled by Battle Mountain Gold, Placer
Dome, ASARCO, and Orvana Minerals, prior to its acquisition by
Timberline in 2006.
About Timberline Resources
Timberline Resources Corporation is exploring and developing
advanced-stage gold properties in the western United States.
Timberline holds a 50-percent carried interest ownership stake in
the Butte Highlands Joint Venture in Montana where gold production
is targeted to commence in mid-2013. Timberline's exploration is
primarily focused on the goldfields of Nevada, where it is
advancing its flagship Lookout Mountain Project toward a production
decision while exploring a pipeline of quality earlier-stage
projects at its South Eureka Property and elsewhere. Timberline
management has a proven track record of discovering economic
mineral deposits and developing them into profitable mines.
Timberline is listed on the NYSE MKT where it trades under the
symbol "TLR" and on the TSX Venture Exchange where it trades under
the symbol "TBR".
Forward-looking Statements
Statements contained herein that are not based upon current or
historical fact are forward-looking in nature and constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Such forward-looking statements reflect the Company's
expectations about its future operating results, performance and
opportunities that involve substantial risks and uncertainties.
These statements include but are not limited to statements
regarding the timing of the Company's permit applications and
permit issuances, the Company's continued exploration and drill
program at South Eureka and Lookout Mountain, the timing of assay
results from such drilling program being released, the Company's
ability to expand the South Eureka resource, the timing or results
of the Company's drill programs at Butte Highlands, including the
timing of completing applications and obtaining necessary permits,
the timing of the development and estimates of the timing of the
commencement of production of gold at the Company's Butte Highlands
project and projects on its South Eureka property, the potential
life of the mine at the Butte Highlands project, the targeted
production date for the Butte Highlands project, targeted date for
production at South Eureka, the potential for a heap-leach mine at
South Eureka, targeted dates for the South Eureka technical report
and economic scoping study, and possible growth of the Company and
the Company's expected operations, including potential development
of an open pit extraction and run-of-mine heap leach processing and
operation at South Eureka. When used herein, the words
"anticipate," "believe," "estimate," "upcoming," "plan," "target",
"intend" and "expect" and similar expressions, as they relate to
Timberline Resources Corporation, its subsidiaries, or its
management, are intended to identify such forward-looking
statements. These forward-looking statements are based on
information currently available to the Company and are subject to a
number of risks, uncertainties, and other factors that could cause
the Company's actual results, performance, prospects, and
opportunities to differ materially from those expressed in, or
implied by, these forward-looking statements. Factors that could
cause or contribute to such differences include, but are not
limited to, risks related to the timing and completion of the
drilling programs at Butte Highlands and South Eureka, risks and
uncertainties related to mineral estimates, risks related to the
inherently dangerous activity of mining, and other such factors,
including risk factors discussed in the Company's Annual Report on
Form 10-K for the year ended September 30, 2011. Except as required
by Federal Securities law, the Company does not undertake any
obligation to release publicly any revisions to any forward-looking
statements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Timberline Resources Paul Dircksen CEO 208.664.4859
ISR Capital W. Kirk Williams Corporate Counsel 208.350.6766
Timberline Resources (QB) (USOTC:TLRS)
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Timberline Resources (QB) (USOTC:TLRS)
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