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Timberline Resources Corporation (TSXV:TBR,AMEX:TLR) announced that it has completed the negotiations and executed the definitive agreement for the sale of its wholly-owned contract drilling subsidiary, Timberline Drilling, Inc.
As quoted in the press release:
The sale, which is expected to close within the next week, is to a private company formed by a small group of investors, including TDI’s current senior management team. No management or directors of Timberline Resources are affiliated with the buyer.
The sale is valued at over $13 million, subject to closing adjustments, and will allow Timberline to:
- add over $10 million in near-term cash to its treasury
- use a portion of the cash received to repay its $5 million convertible debt obligation and, with the assumption of all TDI debt by the purchaser, become debt-free;
- focus on the Company’s core business of gold exploration, development, and production;
- retain certain strategic benefits of owning the drilling subsidiary by entering into an agreement with the purchaser to provide future core drilling services to Timberline at below-market prices;
- accelerate drilling and exploration at its district-scale South Eureka (Nevada) gold property.
Timberline Resources President and CEO, Paul Dircksen said:
“We believe that our core business of gold exploration, development, and production is and should be, our sole focus. We expect near-term cash flow from gold production at our Butte Highlands JV project in Montana, and our expanding gold resource and development potential at our South Eureka property in Nevada are particularly exciting in this environment of elevated gold prices. The cash from this sale, along with the significant savings in future core drilling costs, will facilitate the expedited advancement of our properties.”
Click here to read the Timberline Resources (TSXV:TBR,AMEX:TLR) press release.
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