Explorer/driller profitable, provides positive cash flow

BUTTE, Montana - We have more on Timberline Resources (TLR, Stock Forum and V.TBR, Stock Forum), the combination mine engineering/gold explorer whose Canada and USA-traded shares are gaining smartly.

Idaho's Timberline has its footprint in Idaho, where it is based, in Montana, where its Butte Highlands gold mine is a year or so away from reality; and in Nevada. Timberline also is staked in Peru via an investment in Rae Wallace Mining. Please see Thom Calandra coverage of Timberline, Peru and Montana via Stockhouse: Click here.

Timberline's largest footprint comes from a drilling unit: Timberline Drilling operates core drilling underground and exploration drilling at surface. Mining engineer Ron Guill and his Western USA company Small Mines Development, is a backer and joint venture partner of Timberline in Montana. The drilling subsidiary provides steady dollars to the overall company's sales sheet.

This is the one small gold company whose shares I don't own and - after seeing Mr. Guill, CEO Randy Hardy and exploration chief Paul Dircksen at their muddy best in Butte recently -- wish I had bought in immediately at 90 cents a share USA. It's $1.15 today (Monday).

CEO Hardy tells Timberline's South Eureka property in Nevada is working on mapping and sampling, geochemistry, geophysics and 34,000 feet of drilling. "We are focusing on the Lookout Mountain project and enhancing the existing resource there, but we are also doing some exploration on other projects on the property. The property is over 23 square miles," he says.

In Montana, the Butte Highlands Gold Project, which is a 50-50 proposition, is on schedule, he says. "Ron Guill's affiliate of Small Mine Development (SMD), Highland Mining LLC, is our JV partner, and SMD is the contractor there doing all of the site development as well as the underground development of the ramp and the mining once that begins," Randy Hardy tells me. "We have submitted our application to the state for the Hard Rock Operating Permit and we have received their first round of comments. We still expect that the permitting process will take approximately one year, and we expect that we will receive the permit in the third quarter of 2011."

Mr. Guill's SMD and the JV's operating personnel are the operators of the underground project. The reality is that Mr. Guill's team, whom I have met, interact every minute of the working day with engineers, geologists and other Timberline employees.

Timberline is drilling a few exploration holes around the expected mineralization at Butte. How it works: Timberline Drilling is doing the core drilling at Butte Highlands as well as at the South Eureka property in Nevada.

Timberline Drilling just extended a contract with Newmont Mining (NEM, Stock Forum and NEM) in Nevada. That is steady-Freddie dollars. Timberline Drilling has been profitable and providing positive cash flow to the company for the past five quarters, Mr. Hardy says.

"As you can see, we are focused on our exploration properties since we are not the operator at the Butte Highlands JV," Mr. Hardy says. "Paul Dircksen has been very successful throughout his career at identifying properties that can become operating mines, and we are capitalizing on that. We expect to continue to acquire exploration properties where we can add value and subsequently monetize through other JVs, royalties, option agreements and so on."

More from elsewhere:

Bellhaven Copper & Gold (TSX: V.BHV, Stock Forum) will post drill results from its La Mina gold and copper porphyry in Colombia by mid-September. The fresh data could validate the red-rich channel samples and property layout I already have seen there. I think the shares will be extremely actionable in coming days. But then, I own 1.4 million shares and the company is a Ticker Trax Planetary Prospect. Paul Zweng, interim CEO and Stanford University doctorate in geology, is also a founder of Peru's Antares Minerals. He is in Canada this week telling the BHV story.
I intend to see the Sweden gold mine operated by Gold-Ore Resources (TSX: V.BHV, Stock Forum) Sept. 7 to 9. Patrick Abraham of Panama, a director of Bellhaven and son of the late newsletter writer Larry Abraham, will accompany me. I own 12,000 shares of GOZ. I hope to validate the mine for Ticker Trax subscribers … but no guarantees.
On the highly speculative validation front - way off the charts and quite possibly capable of sharp gains: The Comstock silver and gold lode in Nevada. The company is one of those OTC-listed prospectors run in part by a Los Angeles businessman I know, John Winfield. The ticker is LODE and the company is Comstock Mining (OTC:BB: LODE, Stock Forum). Corrado DeGasperis is CEO and I will see the property this week in Nevada.

NEW ORLEANS & SF: This autumn I will be making two or three appearances outside of prospect tours. One of them is in New Orleans, where I appear each year at Brien Lundin's New Orleans Investment Conference. On the conference scene, there are only two this autumn where I am scheduled to present workshops: San Francisco and New Orleans. A third possible is the Oct. 6-8 Medellin Metals Trade Fair in Colombia.

If you'd like to join our Stockhouse and Ticker Trax audience at the late-October New Orleans show, please register and pay up at this link: REGISTER FOR NEW ORLEANS. You get a discount on the price at that address. It's my favorite investment show - along with the longstanding San Francisco Hard Assets conference in November, when I will be presenting a workshop on structural geology - as a reporter, not a geologist.

Ticker Trax™ started in November 2008. The service researches a select group of Planetary Prospects™ with legitimate shots at rising significantly in the span of two years, maybe less and maybe more. It is at www.tickertrax.com.

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(All photos by Thom Calandra. Thom and his family own shares of each of the 12 Planetary Prospects. Thom’s personal holdings are available for all to see on Stockhouse, the Canada publishing company. Subscribers are informed well in advance of any shift in research regarding Planetary Prospects and any purchase or sales decisions. Subscribers always come first.)

Ticker Trax™ Please see tickertrax.com to learn more about this wealth service and its Planetary Prospects. For an index of free Thom Calandra articles, please click here. For an entire explanation of our strategies, research methods and disclosure procedures regarding all aspects of Ticker Trax and our Stockhouse reports, please visit our readily available Stockhouse articles. Please see this one in particular: Core Box Revealed. For the password-protected Ticker Trax library, please see: www.tickertrax.com/Login.aspx.

HOLDINGS: Thom’s holdings are listed for Stockhouse members at www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He and his family own recently minted gold and silver coins and shares of about 30 public and two private companies. As with each of the Planetary Prospects, Thom Calandra owns Colombian Mines, Xtra-Gold Resources, Great Basin Gold, Endeavour Silver, BioCryst Pharmaceuticals, Bellhaven Copper & Gold and each of the other Planetary Prospects researched in this and other reports.

THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch and MarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold in 1999 and in 2000. He has been covering life-sciences and natural resources since 1988.

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