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Ian Cassel
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Full Time Micro Cap Investor. Founder of MicroCapClub.com Founded in 2011, MicroCapClub is an exclusive forum for experienced microcap investors focused on microcap companies (sub $300m market cap). MicroCapClub was created to be a platform for experienced microcap investors to share and discuss... More
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  • Timberline Resources (TLR) 1 comment
    Jul 28, 2009 7:46 AM | about stocks: TLR
    Price: $0.40, Mkt Cap $15m

    Summary: Timberline Resources Corporation has taken the complementary businesses of mining services and mineral exploration and combined them into a unique, forward-thinking investment vehicle that provides investors exposure to both the “picks and shovels” and “blue sky” aspects of the mining industry. Timberline has contract drilling subsidiaries in the western United States and Mexico and an exploration division focused on high-potential, district-scale gold projects. The Company has a 50/50 joint venture with Highland Mining, LLC, an affiliate of Small Mine Development, LLC, at the royalty-free Butte Highlands Gold Project, which is scheduled for development in 2009.

     

    News Out Yesterday:  7/27/09: Timberline Completes Formation of Joint Venture Operating Company for Its Butte Highlands Gold Project http://bit.ly/sbI0j

    This is a real interesting company as it’s one I invested in and was affiliated with in the past.  Todays announcement solidifies its JV with SMD, Small Mines Development, to 50/50 develop Butte Highlands Gold Project. SMD will pay for all expenses up to production and will be paid back with first cash flows from production. The interesting thing is SMD is probably the best underground mining contractor in the country so the likelihood of getting into production is very very high. No mill permitting (will be toll milled) so no real permitting issues. I’ve seen the plan of operation. Capital cost $15m….cash cost likely to be around $350-400/oz with production anticipated at 50,000 oz in year one starting Fall 2010. Resource is around 500,000 oz, average grade .32 oz/ton. Paul Dircksen, head Geo at TLR and also the guy that did all the exploration on the property sees the total ounces likely increasing to close to 1 million ounces.

    The interesting thing is the relationship between TLR and SMD, and what other future projects that could arise. Oh yeah almost forgot, CEO of SMD is also the largest shareholder in TLR, so he is highly behind both the Butte Highlands Project and TLR…..

    Bottom line:  Timberline has a drilling company and a gold mine fully funded to production, and it’s trading at a $15m market cap.  I would not be surprised to see the stock over a dollar in 6-9 months.  Successful production in 2010 would likely make this a five bagger from today’s prices.

    Disclosure:   No Position and No affiliation.

    Stocks: TLR
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  • Ian Cassel
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    Author’s reply » I had a good chat with John Swallow this morning from Timberline. They believe they will get the permit to start construction on Butte Highlands in the next couple weeks. The project is a 50/50 JV with Small Mines Development (SMD), and TLR has a complete carry to production. Production still on schedule for Fall 2010. I don't see how the stock isn't a buck higher a year from now and maybe more if they bring in another project. The risk is boredom waiting for the first gold pour. I haven't bought any yet but am watching closely.

     

    Disclosure: NO Position and NO Affiliation.
    16 Aug 2009, 02:26 PM Reply Like
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