SMD no longer owned by Ron Guill as he is retiring. TLR believes Mr Guill is doing the deal because the increased costs and delays meant that he had too much at risk and he did not want to have to keep putting more of his wealth at risk. He needed to free up some of the already invested funds so he offered what TLR believes to be an excellent opportunity to acquire the additional 50% interest.
I was told that there would be a filing giving all the details in the very near future but that TLR would pay between $4 and $5 million in cash with the balance in stock.
SMD will likely continue doing the mining under contract.
Royalty will be on a sliding scale that decreases as production mounts but it will start out at somewhat less than 5% and decrease from there.
It was not explicitly stated but I got the definite impression that most likely source of funds to continue development and exploration at BH and in Nevada would be an equity event a bit down the road. Most likely after issuance of the permit which they believe will be this year and which they hope to speed up with their involvement.
They are VERY excited about the Lookout Mountain project and believe it is going to be a monster. An updated NI 43-101 resource estimate is imminent and will be a significant increase. I can hardly overstate how optimistic everyone I have spoken to at the company is about S Eureka.
If this project is even half as good as they believe, it will be a game changer and long term shareholders will look back at sub $1/share prices with incredulity.
I asked about the permit and , of course, they can't say anything definitively but they are optimistic that they might be able to speed the process up a bit by a more focused approach.
I didn't post this because it is so speculative and it is what it is! There are some timelines imbedded in the state process but no one knows if they will hold. It is just a water handling modification and TLR is proposing a state of the art treatment process that will leave the water far purer than it is originally, so the belief is this won't be too long a process.
It comes down to a race in which Timberline will be very, very successful and the price will climb very nice for all of us. or cash will dry up and it will be crash and burn. The gold is there, but will it be dug in time for Timberline to survive and grow. The clock is ticking and it is my hope the company will now be more aggressive in doing what needs to be done to get the mining started.
You're telling me even TLR IR is saying Guill is doing this to mitigate his own risks before retiring?
That seems like a red flag, given that every TLR advocate on this board throws around his name as the best indicator the Butte project won't fail.
Race against time is on. Can TLR start producing before it runs out of means to pay for production, and even before that question is answered, how long will it take a state government to give them the greenlight to move forward?
I don't see where the Eureka gold is relevant at this point. Maybe down the road, but not yet. TLR knows how to find gold. But TLR has gotten itself out of that business, and into the business of getting the gold from ground to market. Except it isn't in that business yet.
Am I being too harsh? There's no way we start getting money from Eureka before Butte, right? And Butte revenues will have to come to keep this company in business and fund anything else they do next, right?
dutch...Some of your points are worth noting , but IMO not quite accurate. The Butte permit process that is underway(focused on the hydrology and HRP), is something management has to adjust to as developments arise. That said, Ron Guill was very clear in his updated comments. It appears to me he intends to support Timberline any way he can. We still need to learn all the details of the 100% ownership/acquisition, but IMO, like in any business, things happen in the day to day operations that dictate certain decisions.
I think your point about financing goes hand in hand with my above opinion about future timelines, progress will dictate when and how mangement will adjust to developments. I agree with you time is a red flag, but only in terms of not knowing what the MDoEQ will do. Timberline and Ron Guill(not to single him out), appear to be doing what is best for shareholders under the circumstaces. If that bothers you(the ball being in the MDoEQ court), you should have waited for the HRP to be approved first! I don't think you'll be sorry for finding Timberline before the HRP approval, once the Butte project gets the green light, South Eureka assets start to look much stronger. Keep in mind Timberline is debt free, so financing(if/when needed), won't be a problem.
We all have to watch developments here, they are sure to continue and things are getting very interesting!
great job, however, IR is always optomistic so I would temper what they said and wait for some REAL developments. I have spoken to many company IR's and they will never say anything negative.