Timberline Resources (TSX.V: TBR) is exploring and developing several gold properties in the western United States. The company's most advanced projects are the Lookout Mountain Gold project, located at the southern end of the prolific Battle Mountain-Eureka gold trend in Nevada and the Butte Highlands joint venture project in Montana.
The Lookout Mountain project is the most advanced project within the 60 sq. km (23 sq. mi.) South Eureka land package. This is one of the largest remaining undeveloped land packages in Nevada. Its main mineralized zone is just 6.4 km (4 mi.) from Barrick Gold’s 2 million ounce plus Ruby Hill Mine.
The project has numerous past producing open pits within the project boundary, totalling at least 133,000 ounces of historic production. A number of areas have drill indicated, historic resources, not compliant with NI 43-101 standards.
Timberline’s initial NI 43-101 resource estimate at Lookout Mountain includes 286,000 ounces of gold in the measured and indicated categories and 206,000 ounces of gold in the Inferred Resource category. Exploration data suggests mineralization would be amenable to low-cost, heap-leach recovery and has the potential for near-term open pit production with modest capital expenditures.
More than 635 drill holes have been completed on the project including 13,700 metres (45,000 feet) planned for 2012. Drill hole 108 returned three significant intervals including 0.55 g/t (0.016 opt) over 73.2 metres (240 feet).
Since the initial resource estimate, drilling completed by Timberline has expanded mineralization to the east, west and 200 meters to the south in the main Lookout Mountain zone. The resource remains open in all directions.
Timberline is also testing targets at the Windfall Structural trend to the Northeast and at the South Adit target, where historic drilling has outlined significant gold mineralization.Timberline will be incorporating this zone of mineralization into the upcoming resource estimate.
The company expects to be able to deliver an updated resource estimate with the new drilling expected to significantly increase the resource, and is due out in the first quarter of 2012.
Timberline also has a 50-percent carried-to-production interest in the Butte Highlands Gold Project, located approximately 15 miles south of Butte, Montana. All surface facilities required for commercial production have been constructed, including shops, offices, changing facilities, and water discharge settling ponds. A substantial amount of equipment required for mining, including jumbo drills, bolters, trucks, loaders, generators, and a cement plant, have been mobilized as well.
Gold production is slated to commence in 2012 at an estimated production rate of 400 – 500 tons per day to be toll-milled at a nearby mill. Grade is expected to average 9 to 10 g/t (0.27 to 0.30 ounces per ton) with 88% recovery at the mill.
Based on historic drilling, Timberline has estimated a geologic resource of approximately 750,000 ounces of gold at a grade of 9.25 g/t (0.27 ounces per ton).
(These calculations are historic in nature and are not compliant with NI 43-101 regulations and therefore should not be relied upon.)
Drilling from an 86-hole underground drill program was designed to outline the first several years of mine production, focusing on the upper portion of the mineralized block. Highlights include a 10.2 metre (33.6-foot) interval grading 56.5 g/t (1.65 opt) gold (BHUG-006) including a 1.52 metre (5 foot) interval grading 358 g/t (10.45 opt) gold.
Timberline’s 50% JV partner is funding all development costs, while Timberline’s share of costs will be paid out from future mining proceeds.
Both the Butte Highlands and Lookout Mountain projects are located in mining jurisdictions that host world class multi-million ounce deposits, have secure rules of law, and are politically stable.
Both project areas have outstanding existing infrastructure. Permitting processes in both Montana and Nevada are transparent and tax policies are considered low by international standards.
With production imminent at Butte and resources rapidly growing at Lookout Mountain, Timberline Resources is excited about its prospects for cash flow and growth in 2012, and in the years to come.
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