Timberline Options Snowstorm Project and Montana Copper-Silver Prospects to Daycon Minerals
COEUR D'ALENE, IDAHO, Jun 07, 2012 (MARKETWIRE via COMTEX) -- Timberline Resources CorporationCA:TBR -5.26% TLR 0.00% (nyse mkt:TLR) ("Timberline" or the "Company") announces that it has entered into two Exploration and Option to Purchase Agreements with Daycon Minerals Corporation ("Daycon"), a private Canadian corporation, for its Snowstorm Project including its Snowshoe Lease (collectively, the "Snowstorm Project ") and its six stratabound copper-silver prospects in Montana (the "Montana Prospects").
The past-producing Snowstorm Mine, which is adjacent to the Lucky Friday Mine operated by Hecla near the town of Mullan, Idaho, produced for six years in the early 1900s with a reported 800,000 tons grading 4% copper and 6.0 opt silver, making it one of the highest grade stratabound copper-silver operations in the area. Since that time, limited and sporadic work was undertaken at the Snowstorm Mine until Timberline undertook a program of acquiring additional claims and a limited drill exploration program in 2007, which culminated in Timberline acquiring control of the project from Hecla Mining Company. The Snowstorm Project encompasses 53 patented claims and 39 unpatented claims, covering an area of 577 hectares.
The Montana Prospects, being six separate stratabound copper-silver properties known as Clear Peak, Copper Rock, East Bull, Lucky Luke, Minton Pass and Standard Creek, are all 100% owned by Timberline. The group totals 227 unpatented claims covering an area of 1,945 hectares, and are grassroots properties which were acquired by Timberline during 2004 through 2008. Limited mapping and surface sampling by the company has been carried out to date.
Daycon Minerals Corporation is headquartered in Toronto, has an experienced team of management, directors and advisors from the mining industry, and is focused on assembling and financing stratabound copper-silver properties in Idaho and Montana. Daycon has added Paul Dircksen to its Advisory Committee.
Paul Dircksen, Timberline's Chief Executive Officer, said, "We are devoting full time attention and funds to our advanced stage Lookout Mountain and Butte Highlands Projects. We are a gold exploration company with two major projects and a pipeline of earlier stage gold projects, all in the western US. Daycon, with its other projects, will focus on stratabound copper-silver as its primary corporate direction. We understand that the plan for Daycon is to seek financing with a view to a potential listing in Canada as early as later this year, and we recognise the opportunity to be part of that story. We know and respect the Daycon team and look forward to a long strategic relationship."
Mr. Dircksen continued, "The package that Daycon has acquired from Timberline is a very exciting and robust group of claims with great potential. The Snowstorm Project, a past producing mine, itself has multiple targets - some of which are untested - and taken with the grassroots Montana Prospects, are a truly unique compilation. We understand that Daycon also controls the Niagara Project and Lost Creek (Copper Creek) Prospect on option from another mining company, such that the Daycon commitment to and focus on Revett Formation copper-silver projects is clearly evident."
David Poynton, President of Daycon, added, "We are very pleased to have concluded this arrangement with Timberline. We will continue to focus on building our story and project pipeline as we develop and roll-out the Daycon model. Timberline's past work and data inventory has been of great advantage, and we intend to quickly review and re-evaluate Snowstorm based on current mining approaches and methodologies. Having Paul join our Advisory Committee is of great value, and we look forward to our strategic relationship with Timberline, and our other local partners, as we advance Daycon."
Under the terms of the transaction for the Snowstorm Project:
-- Daycon has a five year option to acquire Timberline's 100% interest, subject only to a Royalty Agreement over certain of the claims with Hecla Mining Company, and a Lease Agreement with Snowshoe Mining Company with royalty over those claims; -- Daycon issued to Timberline 200,000 common shares on June 6, 2012. 300,000 common shares are to be issued on August 15, 2012, and 500,000 common shares are to be issued on each of June 1, 2013 and 2014, for a total potential share issuance to Timberline of 1.5 million Daycon common shares; -- Commencing June 1, 2014, Daycon must expend a minimum of US$250,000 per annum in qualifying exploration expenditures; -- In order to exercise the option, Daycon must pay to Timberline US$1.5 million; -- Daycon is liable to make all payments to keep the properties in good standing, including annual claim fees and advance royalties, and must complete minimum work expenditures required under the Lease Agreement. Under the terms of the transaction for the Montana Prospects:
-- Daycon has a five year option to acquire Timberline's 100% interest; -- Daycon issued to Timberline 300,000 common shares on June 6, 2012. 300,000 common shares are to be issued on August 15, 2012, and 25,000 common shares are to be issued on each of June 1, 2013 and 2014 for each of the six Prospects retained, for a total potential share issue to Timberline of 900,000 Daycon common shares; -- Commencing June 1, 2014, Daycon must expend a minimum of US$200,000 per annum in qualifying exploration expenditures on the overall package of Prospects; -- In order to exercise the option on any one of the Prospects, Daycon must pay to Timberline US$250,000, for a total potential cash payment to Timberline of US$1.5 million; -- Daycon is liable to make all payments to keep the properties in good standing, being annual claim fees and completing minimum work expenditures required under the Lease Agreement; and -- A 3% royalty is payable to Timberline on each Prospect which Daycon opts to acquire, but Daycon has the right to buy the royalty down to 2% on any one Prospect acquired on payment of US$1 million.
The offered securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or applicable state securities laws, and may not be offered or sold in the United States absent registration under such laws or pursuant to an exemption from registration therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Steven Osterberg, Ph.D., P.G., Timberline's Vice-President of Exploration, is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical contents of this release.
To read the entire news release follow the link below:
June 7, 2012 (Source: MarketWatch)
Disclosure: Timberline Resources is a Vulture Bargain Candidate of Interest (VBCI) and is our fully fledged Vulture Bargain #4. Members of the GGR team are actively accumulating shares of TLR and continue to hold a speculative long position in the company.