COEUR D'ALENE, IDAHO, May 16, 2012 (MARKETWIRE via COMTEX) -- Timberline Resources Corporation (TSX VENTURE: TBR)(NYSE Amex: TLR) ("Timberline" or the "Company") announced today that it has signed an amended non-binding Letter of Intent to increase its ownership stake in the Butte Highlands Gold Project from 50-percent to 100-percent, acquiring the remaining interest in Butte Highlands JV, LLC ("BHJV") from its joint venture partner, Highland Mining, LLC ("Highland Mining") as previously announced on April 10, 2012.
The revised terms of the agreement call for Timberline to acquire the remaining 50-percent interest in BHJV in exchange for issuance of shares of the Company's common stock, not to exceed 5% of the common stock issued and outstanding as of the date of closing, along with a Net Smelter Return (NSR) production royalty of 5% on all production from Butte Highlands, and a future cash payment to Highland Mining of $6 million to be made no later than 2 years subsequent to the commencement of commercial production at Butte Highlands. Consistent with the original agreement, Highland Mining will completely c ancel its outstanding loan, including principal and interest, to BHJV for more than $24-million of development costs incurred at the project to-date. The deal is expected to close in the current quarter, subject to standard closing conditions and regulatory approvals, including the approval of the NYSE Amex and the TSX Venture Exchange.
Highland Mining is controlled by Ron Guill, who is also a director of the Company and the Company's largest shareholder.
This has definitely been well played by the management and I'm really liking the deferred nature of the deal with Ron Guill. It should show an all around renewed confidence in the project. Here's to hoping the permit is around the next bend!