Timberline Forms 50/50 Joint Venture At Butte Highlands

COEUR D'ALENE, ID - Timberline Resources Corporation reported that it and Ron Guill have mutually agreed to cancel the agreement to acquire Small Mine Development, LLC (``SMD''), while simultaneously agreeing to form a 50/50 joint venture with SMD at Timberline's 100-percent owned, royalty-free Butte Highlands Gold Project. Under terms of the agreement, Timberline will be carried to production by SMD, which will fund all mine development costs and begin development next summer. Both Timberline's and SMD's 50-percent share of costs will be paid out of proceeds from future mine production.
Timberline also agreed to a $10-million debt & equity financing with Ron Guill, a Timberline Director and the sole owner of SMD. Proceeds from the financing allow Timberline to pay off its bridge loan with Auramet Trading, LLC and provide working capital.
Timberline CEO Randal Hardy stated, ``We are excited about this transaction. In these unprecedented market conditions, it proved extremely difficult to complete the acquisition of SMD under acceptable terms. Therefore, we jointly agreed that the unpredictability in the current economic climate presented too great of a risk to the Company and our shareholders. Under these circumstances, we believe that 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. This partnership is a model for future opportunities in underground mine development and mining with SMD.''