Timberline Resources Corp (TLRS)

[baystock1]

The fact that Timberline felt it wise to dilute at 20 cents per share to fund development on their very promising South Eureka Nevada project, rather than wait for their Montana mine to go into production and for the resulting cash flow to kick in shows that the company's management shares the market's high level of scepticism that the Butte mine will ever be allowed to go into production. Montana is well known to be extremely unfriendly towards any new mining developments and it is doubtful that there will ever be a new mine allowed in Montana. That said IMO TLR is a buy at these levels, though not as undervalued as some would think due to their mistaken assumption that the company is self funding going forward. One should assume that further dilution will be needed to take South Eureka into production. Although in its favor is that South Eureka is a low capex project. If by some remote chance the Montana mine goes into production, that would IMO be an unexpected upside surpise:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=64465422

>>Fwiw, I came across this post @ Coach247's site...

http://www.mexicomike.ca/php/phpBB2/viewforum.php?f=2&sid=9ed1610e559aca3eb3cf373142d3f9fd

A visit to Timberline Resources and Butte Highlands

Posted: Mon Jun 20, 2011 2:29 pm

I was in Butte Montana 2 days last week and visited the Butte Highlands project of TLR. I had a chance to talk with the lead geologist Zane Smith and his assistant Eric about the drilling results. In fact they took me to the warehouse and showed me the cores of samples that assayed out at 27 ounces per ton. Their is little question that they are in the process of defining a very nice ore body. The company was very pleased to see a shareholder request an opportunity to see the project. They picked me up at my motel, drove to the project 30 minutes or so away and I went out to dinner with them following the project tour (at my own expense).

I went into the mine and saw exploratory drilling being conducted and met all their personnel on location. All in all they made a very favorable impression.

I asked about the status of the permit. They said that they would have all the questions raised by the DEQ answered by late summer/ early fall; it was then just a matter of the issuance of the permit to begin mining. They were confident that would be the case.

If you own TLR as I do, you know that the stock has been in a steady retreat down from around $1.30 to near $.70 over the last several months. It appears the stock has been capped at around a dollar for quite a while.

I went there to try to find out why the stock has not moved even when some eye-popping drill intersects were released. I discussed the mining environment with a number of Montana elected officials. By coincidence, I had my lodging at a hotel that was hosting a state wide (GOP) party convention!!

Every official expressed the same sentiment; that the DEQ ( an environmental agency) was aggressively hostile to the establishment of new mines in the region. Further there have been repeated protests and organized opposition by a coalition of local citizens and outside environmental groups. These groups have attended all public meetings and have mounted an aggressive campaign to deny a permit to TLR.

I talked with a mining engineer who works in the area of the Butte Highlands project and he said that the Gold may be there but "it may never get off the mountain". In fact he owned TLR at one time but sold when he saw the nature and extent of the opposition to the project. He cautioned me that they may get a DEQ permit to mine, but that he really doubts that that will end the opposition. He said that all I needed to do was to go to a local gathering spot in Whitehall Montana and talk to any of the locals at random and I could easily gauge that these folks are not going away any time soon.

Before I retired, I was involved as a consultant / attorney for "intense" development projects such as building a "power plant" and siting of Manufactured housing communities. Though I was able to avoid lawsuits from the opposition for my clients,I know from experience that a determined group can tie up a project in court for a long time.

I love the business model of TLR. Its Nevada prospects appear to be top quality. But I have sadly concluded that Butte Highlands chances of going to production in the immediate future without a further fight are not very good. The mining engineer did say that if TLR does get a mining permit that is not filled with onerous conditions and no lawsuits follow, that TLR would be a "really good buy". He said that he would wait until that time to buy the stock rather than gamble that TLR and its joint venture partner(SMD) would be operational by late this year early next. OUCH is all I can say.

http://www.mexicomike.ca/php/phpBB2/viewtopic.php?t=15683 <<