COEUR D'ALENE, Idaho, Dec. 30, 2008 (GLOBE NEWSWIRE) -- Timberline Resources Corporation (NYSE Alternext US:TLR) today announced consolidated financial results for 2008, along with a recap of its 2008 accomplishments and its outlook for 2009. For the year ended September 30, 2008, Timberline reported gross revenues of $31.73-million, a 65-percent increase over 2007, and an overall net loss of $10.10-million, which includes $1.88-million in one-time severance costs related to the management transition at Timberline Drilling, $2.15-million in non-cash charges, $2.39-million in exploration costs, $0.94-million in financing charges related to the repurchase of the Series A Preferred Stock, and considerable legal, regulatory, accounting, and consulting expenses incurred in the Company's effort to acquire Small Mine Development LLC ("SMD").
Timberline CEO Randal Hardy commented, "At the outset of fiscal 2008, demand for mining services was unprecedented. Our greatest challenges then were high energy and labor costs, along with a dearth of experienced operational management personnel. By fiscal year-end and subsequent to it, these issues were essentially resolved by rapidly deteriorating financial conditions as the credit crisis, global deleveraging, and hedge fund liquidation gained momentum, resulting in sharply decreased demand for mining services. These developments adversely impacted the plans of many mining, mining services, and mineral exploration companies, including Timberline."
Mr. Hardy continued, "After investing significant resources into our planned acquisition of SMD, the collapse of financial markets prevented us from executing the transaction on acceptable terms, leading to its cancellation subsequent to year-end. However, many of our other 2008 objectives were successfully realized, including our listing on the American Stock Exchange (now NYSE Alternext US), the restructuring of our drilling services business with a focus on customer service, responsible management, and sustainability and, especially, the successful advancement of our Butte Highlands gold project to the development stage and the forming of a joint venture to take it to production."
In 2008, Timberline's contract drilling subsidiaries, Timberline Drilling Incorporated and World Wide Exploration, S.A. de C.V. ("World Wide"), reported combined gross revenues of $31.73-million (compared to $19.23-million in 2007), a combined gross operating profit of $6.79-million (compared to $4.49-million in 2007), and a combined after-tax loss of $2.14-million (compared to a loss of $0.55-million in 2007). Timberline Drilling and World Wide specialize in underground, hardrock core drilling, which is typically less cyclical than more speculative exploration drilling, much of which has been reduced or delayed during the current industry slowdown. Drilling revenue growth was again substantial in 2008 but appears certain to pull back in 2009. Timberline continues its efforts to "right-size" its operations to meet the prevailing market demand for drilling services.
Timberline's exploration business and main corporate office reported a net loss of $7.97-million (compared to a loss of $2.14-million in 2007). As stated above, the loss includes $2.15-million in non-cash charges, $2.39-million in exploration investment, $0.94-million in financing costs related to the bridge loan used to repurchase the Series A Preferred Stock, along with considerable expenses incurred during its effort to acquire SMD.
Timberline's 2008 Annual Report on Form 10-KSB was filed with the SEC on December 30, 2008. It can be viewed in its entirety on the SEC website, which can be accessed from the "Investors" page of the Timberline website at www.timberline-resources.com.
In August, Timberline resumed drilling at its 100 percent owned, royalty-free Butte Highlands gold project. Subsequent to year-end, the Company announced results of its most encouraging hole to date, BH-DDH 08-03, which was drilled 100 feet northwest of previously tested mineralization boundaries. The hole returned several mineralized gold intervals, including 2.0 feet of 0.62 ounces per ton (oz/t), 37.0 feet of 0.22 oz/t, 5.0 feet of 0.26 oz/t, 9.0 feet of 0.43 oz/t, and 35.0 feet of 0.14 oz/t. These results demonstrate the northwest extension of the Upper, Middle, and Lower zones, while the latter two intervals comprise a new discovery at depth, a potential offset portion of previously identified zones. Both the extension and the discovery have the potential to increase mineralization estimates at Butte Highlands.
Also subsequent to year-end, Timberline announced plans to form a 50/50 joint-venture with SMD at Butte Highlands. Under terms of the agreement, Timberline will be carried to production by SMD which will fund all project development costs and begin development next summer. Timberline's 50 percent share of project costs will be paid out of proceeds from future mine production.
Timberline Executive Chairman John Swallow stated, "Our strategic partnership with SMD at Butte Highlands provides an excellent opportunity for our shareholders by placing our most-advanced project on a development track with considerably less share dilution and uncertainty than the previously planned acquisition. We believe that this partnership is a model for future opportunities in underground mine development and mining with SMD, and that projects similar to Butte Highlands are a good fit for the current market environment and for the unique qualifications of both companies. We are actively evaluating other opportunities in both mining services and mine development, with a focus on gold and/or silver production, and will continue to do so into 2009."
Timberline Resources Corporation has taken the complementary businesses of mining services and mineral exploration and combined them into a unique, forward-thinking investment vehicle that provides investors exposure to both the "picks and shovels" and "blue sky" aspects of the mining industry. Timberline has contract drilling subsidiaries in the western United States and Mexico and an exploration division focused on district-scale gold projects with the potential for near-term, low-cost development. The Company is forming a 50/50 joint-venture with Small Mine Development, LLC at Timberline's 100 percent owned, royalty-free Butte Highlands Gold Project, which is scheduled for development beginning in 2009. Timberline is listed on the NYSE Alternext US and trades under the symbol "TLR".
Statements contained herein that are not based upon current or historical fact are forward-looking in nature. Such forward-looking statements reflect the Company's expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties, including but not limited to the Company's 50/50 joint venture with SMD, the development and production of the Company's Butte Highlands project, and the Company's expected operations in 2009. When used herein, the words "anticipate," "believe," "estimate," "plan," "intend" and "expect" and similar expressions, as they relate to Timberline Resources Corporation, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, such factors, including risk factors, discussed in the Company's Annual Report on Form 10-KSB for the year ended September 30, 2008. Except as required by the Federal Securities law, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements.