Timberline Resources Corp (fka TLRS)

[ThSeeker]

Wow check this from Gold News Letter:

Next on the Timberline daily charts (I added US and Canada to get a better view due to the "hanger" on the TLRS chart) we see a tight bullish ascending triangle pattern. Once it goes through 52 on TLRS and 65 on TBR.V in Canada it will be a fresh breakout for Timberline. I also thought it helpful to add a 10 year chart. As you can see there is a LOT of upside if this stock is ever going to get back towards its old 2007 or 2011 highs. In 2007 the stock traded for the equivalent of $62 per share! There was a 12 to 1 rollback a few years ago so it was trading more like $5 per share at that time but the split equivalent is $62. I show via each blue line where the main resistance areas will be from a long term perspective on TLRS (TBR will be 30% higher approximately). First around $1.25, then $3, then $5 and $10 as is normal resistance and finally a retest of 2010-2011 highs near $15.


Investors often overlook one of the most important things when determining potential gains and that is capital structure. At less than 35 million shares outstanding for both TLRS and Bravada, these companies have extremely tight share structures. Too many shares outstanding can severely limit the potential gains in share price of any stock. An example would be 2 companies with identical share prices but one has 10mm shares outstanding and the other 100mm. Say they are trading at $1 each. One company is valued at $100mm and the other at $10mm, which is what matters when evaluating what price you are buying into a company for. This is basic stuff but some investors say "well the price is only 10 cents per share and I can get a lot of shares so it is cheap". Well, if that company has 500mm shares outstanding, it is valued at $50MM. To double your money the value has to go to $100M.


But, if a company at 10 cents has 50mm shares outstanding ($5 million market cap), to double your money the valuation of the company only has to go from $5 to $10mm. This is actually the first thing I look at when I hear about a new stock. Unless the company has something extremely special if it has a few hundred million shares outstanding, I avoid it. Many times those businesses are further along and they certainly better be after issuing so much stock! But I find most companies with blown up or bloated share structures have very little insider ownership. They issue paper like it's going out of style and you have to be careful with this dynamic because the stock performance will tread water.


With Timberline, they could raise $5MM at 50 cents now and would only have 45mm shares out. With $5mm, they could blow the doors off Talapoosa and take the property to an entirely new level of value. Would they still have 2mm ounces between Talapoosa/Eureka after all of that drilling or more? Likely more. But even with the 2mm ounce resource they already have, at $1 per share you would have a $45MM market cap or just $22.50 per ounce of gold in the ground! Moving Talapoosa toward showing it can produce closer to 100k ounces annually via a feasibility study should take the valuation to near $100 an ounce in the ground. That would still be cheap based on many comps in the sector at that stage of development.


So, there are huge blue skies on Timberline both fundamentally and technically and their share structure will allow for them to continue to raise larger amounts of money and maintain a tight float for some time. The most important thing you want to see is any new capital raising is done higher than the last round. Same with Bravada yet Bravada doesn't have to spend much of their own money at all because they have partners doing the heavy lifting. Their burn rate is quite low so the recent capital raise at 20 cents will tide them over for a year or more. Watch these two stocks near term and try to boost your positions if they breakout of the resistance areas (27 on BVA and 52 on TLRS/65 TBR.V).


Because they don't trade big volume, it's wisest to have bids in on any pullbacks to try and capture a bigger share position. But, I fear it may be too late here soon to get much this cheap. Once Timberline trades decisively into the 60-80 cent range it will begin to attract bigger money. In fact, they will be presenting to new institutional investors often in April/May. Any one institution that decides they want a position could take it over $1....easily. They will have to to get any significant position because most of us that own the majority of the float won't sell much, if any, until we get there. Supply and demand can be a beautiful thing! At the end of the day the supply for these two companies shares are low, the demand is growing, and gold hasn't even started really going up yet. When gold kicks into gear and trades above $1,400, which I predict will happen in 2017, that's when these small juniors will really gallop. It will be the beginning of the next phase when stocks like TLRS will show that they indeed are going to their old highs, in the teens not the dollars! By the way, BVA was trading over $3 per share in 2010.


Gold miners remain vulnerable while trading below their 50/200 day moving averages as a sector (GDXJ/GDX). But, GDX is creeping above its 50 dma now. A 200dma test may be next then we'll have to see if the gold miners have enough strength to bust through that resistance level. Most pros aren't expecting they will now, which leads me to believe they will. Or, at least they certainly could and it would be a surprise out there for sure. Some select juniors are covertly exceeding their moving averages with little fanfare, which to me is nicely bullish for the sector.


I'm long a significant amount of shares in BVA/TLRS and benefit from any buying generated from this message.