Timberline Announces
First Quarter Financial Results and
Provides Corporate Update
February
17, 2009 - Coeur d'Alene - Timberline Resources Corporation (NYSE Alternext
US: TLR) ("Timberline") today announced consolidated financial
results for its first quarter of fiscal year 2009, which ended on December
31, 2008, along with a corporate update. Timberline's contract
drilling subsidiaries, Timberline Drilling, Incorporated ("Timberline
Drilling") and World Wide Exploration, S.A. de C.V. ("World
Wide"), reported combined gross revenues of $4.69-million for the
quarter, compared to $6.44-million in the same period last year, and a
combined pre-tax net loss of $1.62-million, compared to a loss of
$0.31-million in the same period last year.
Timberline
Drilling's U.S. operations generated revenues of $2.43-million, a gross
loss of $0.66-million, and a pre-tax net loss of $1.74-million. The
sharp decrease in revenue and the increased losses at Timberline Drilling
relative to last year were primarily due to a reduction of operating drill
rigs as industry-wide exploration activity effectively shut down last fall
in response to market turmoil, weak commodity markets, and the lack of
available credit.
World
Wide's Mexican operations generated revenues of $2.26-million, a gross
profit of $0.45-million, and a pre-tax net profit of
$0.12-million. World Wide generated approximately 50-percent more
revenue than in the same period last year, while maintaining nominal
profitability in a very difficult market due to an increase of active drill
rigs and because it was not impacted by the industry-wide slowdown until
very late in the calendar year.
Timberline's
corporate office and exploration division reported a net loss of
$3.08-million for the quarter, which included $0.81-million in non-cash
charges, $0.27-million in exploration expenditures, $1.48-million in
general and administrative costs (of which $0.92-million was related to
legal, accounting, and financial advisory costs associated with the
proposed acquisition of Small Mine Development, LLC, ("SMD")),
and $0.52-million in interest expenses (primarily related to the $8-million
bridge loan that was retired during the quarter). Overall,
Timberline reported a net loss of $4.74-million compared to a loss of
$1.99-million in the same period last year.
Timberline CEO Randal Hardy commented, "The write
off of costs associated with our cancelled acquisition of SMD and a major
restructuring of our drilling operations took place during the quarter, as
evidenced by our results. We believe that the worst is now behind
us. Also during the quarter, we further implemented our business model
by agreeing to form a Joint Venture with SMD to develop our Butte Highlands
Gold Project. We acquired Butte Highlands in 2007 and drilled the
property in 2008 to confirm and expand the expected mineralization. As
part of the JV agreement, SMD will fund the development of the underground
mine, including the ongoing hydrogeologic study, permitting, resource
delineation, and an exploration decline that is expected to begin this summer.
Mr. Hardy continued, "Our preliminary results for
January 2009 are very encouraging, even though January is typically among
the slowest months of the year for contract drilling. In Nevada, we
currently have seven underground drills and one surface drill operating,
all at producing gold projects. Two to four additional drills are
expected to begin operating this spring. In Mexico, we now have just
four drills operating, but expect that number to increase later this
spring. We are optimistic that our cost cutting efforts, improved
efficiencies, and recently-improved contractual terms will positively
impact our operational results going forward. In addition to the
ongoing optimization of our drilling operations, we are actively evaluating
other opportunities. We have analyzed and continue to assess two
producing properties, a processing facility, and other projects in the U.S.
and Mexico with underground mining potential for acquisition or joint
venture purposes."
Timberline Executive Chairman John Swallow added,
"Permitting and mine planning continue at our Butte Highlands Gold
Project as we, along with our partners at SMD, advance toward anticipated
development later this year and production in 2010. With the current
economic and monetary environment, we believe that our gold-production
focus is well supported by market fundamentals and that Butte Highlands has
the potential to deliver exceptional returns to our shareholders. Our
goal is to provide shareholders a return on their investment that includes
share price appreciation and cash dividend payments when cash flows from
our operations are sufficient to permit it. This was a key component
in the development of our cash flow business model, and I continue to
advocate its benefit to shareholders."
Timberline's Quarterly Report was filed with the SEC on
Form 10-Q on February 17, 2009. It can be viewed in its entirety on the SEC
website which can be accessed from the "Investors" page of the
Timberline website at www.timberline-resources.com.
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 district-scale gold projects with the
potential for near-term, low-cost development. The Company is forming
a 50/50 joint venture with Small Mine Development, LLC at Timberline's
100-percent owned, royalty-free Butte Highlands Gold Project which is scheduled
for development beginning in 2009. Timberline is listed on the NYSE
Alternext US and trades under the symbol "TLR".
Statements contained herein that are not based upon
current or historical fact are forward-looking in nature. Such
forward-looking statements reflect the Company's expectations about its
future operating results, performance and opportunities that involve
substantial risks and uncertainties, including but not limited to the
Company's 50/50 joint venture with SMD, the development and production of
the Company's Butte Highlands project, and the Company's expected
operations in 2009. When used herein, the words "anticipate,"
"believe," "estimate," "plan,"
"intend" and "expect" and similar expressions, as they
relate to Timberline Resources Corporation, 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, such factors, including
risk factors, discussed in the Company's Annual Report on Form 10-KSB for
the year ended September 30, 2008. Except as required by the Federal
Securities law, the Company does not undertake any obligation to release publicly
any revisions to any forward-looking statements.
John Swallow, Chairman
Phone: 208.664.4859
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