How does Timberline raise the $$$ needed to go into production. Clearly they have valuable assets in the ground but what do they do. They said they need $10-15M while the mkt cap is about $21M. Someone could buy the company for what they need to raise. I would welcome a meaningful discussion on this subject.
I've talked to TLR management about this exact issue several times. My understanding is that they believe that once they get the permit for BH and if they also have a compliant resource M and I reserve for Nevada that shows somewhere near 1MM Ozs amenable to low cost heap leach production, that they will be able to access equity at a much better valuation and that even if there is significant dilution the stock will appreciate greatly once production begins. Can't say that they are wrong and hopefully they are correct enough that the $ spent delineating the Nevada resource makes a big enough difference to offset the risk of running out of $$ before BH is permitted. It is probably wise for management not to be too explicit about their exact plans as they do not want to place limits around where valuation might come in prior to knowing what the resource and circumstances are but it would reassure investors if there was a more public discussion of their medium term plans for raising $$. They seem to believe that once the permit is in hand and if Nevada has a compliant resource estimate that the $20 to $25MM they need to move forward will not be too difficult to raise and will be well worth the dilution necessary. I'm concerned that the BH permit may not come in before the cash goes out but management seems to believe this will not happen and they sure know more about the state of play in Montana than I do. I'm just a bit more cautious but if they are correct on the timing of events then we will all benefit and the share price will skyrocket in the next couple of years as production begins.
great info, thanks, and it is all logical. BUT, if there is dilution before production, the stock will surely drop from these levels. While it may create a 'buying opportunity', it also creates a loss(albeit temporary).