Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Investment Highlights
• Timberline Resources Corporation (“Timberline” “TLR” “the
company”) is an NYSE Amex listed junior exploration/mining
company focused on developing the Butte Highlands project in
western Montana.
• The company is in the shareholder approval phase of acquiring
Staccato Gold Resources Ltd.
• Gold production is targeted for late 2011 with projected output of
60,000 ounces per year.
• The project is being developed through a joint venture with an
affiliate of Small Mine Development LLC, a well respected
underground development and mining company with primary
clients such as Newmont Mining Corporation.
• The 50/50 joint venture carries TLR’s 50% interest to production.
• We initiate coverage on TLR with a BUY rating and fair value of
$1.53 per share on the assumption the acquisition is completed. If
the acquisition is not completed, our fair value drops to $1.17
which would be a HOLD.
Risks
• The company currently has no operating mines.
• Access to capital and share dilution.
• The company does not yet hold all permits required to mine the
Butte Highlands project.
(All figures are in US$ unless otherwise noted.)
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