COEUR D’ALENE, Idaho, April 16, 2009 (GLOBE NEWSWIRE) -- Timberline Resources Corporation (NYSE Amex:TLR) ("Timberline") today provided an update of its drilling service subsidiaries, Timberline Drilling, Incorporated ("Timberline Drilling") and World Wide Exploration, S.A. de C.V. ("World Wide").
Pending completion of the quarterly review, preliminary results for the second fiscal quarter, ending March 31, 2009, for our two drilling subsidiaries indicate positive net cash flow and a forecast to roughly break even on revenues of $3.7-million. These figures are consistent with management's expectations given the number of drill rigs in operation during the quarter. The two subsidiaries currently have a total of 11 drill rigs in operation with additional rigs planned for near-term mobilization.
Timberline CEO Randal Hardy stated, "Over the past year, we have successfully established a new corporate culture in our drilling subsidiaries and have renewed our focus on underground drilling at established mining operations. We have reduced the layers of management between the head office and the field, streamlined our processes and operations, strengthened our balance sheet, and implemented new employee incentive programs. We are pleased to have achieved these objectives under extremely difficult market conditions."
Mr. Hardy continued, "We are also pleased to announce that Timberline Drilling has extended its current contract with Newmont Mining through February 2011, enhancing an already solid relationship. We have established joint planning and safety review teams with Newmont and, furthermore, Newmont has provided us with mine site facilities to support our operations. The contract extension provides a higher degree of certainty in future cash flows for Timberline Drilling while presenting an excellent opportunity for future stability and growth. It also allows us to focus on further improvements in customer service and safety with our largest client."
Also during the second fiscal quarter, Timberline Drilling agreed to sell several under-utilized, non-core drill rigs, increasing the overall rig utilization rate and decreasing depreciation expenses. Additionally, former management of Timberline Drilling also agreed to forego the remaining $350,000 in severance payments. Subsequent to the quarter end, proceeds from the drill sales were used to help retire more than $1.3-million in debt.
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 has agreed to a 50/50 joint venture with Small Mine Development, LLC at Timberline's royalty-free Butte Highlands Gold Project which is scheduled to begin development in 2009. Timberline is listed on the NYSE Amex 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.