As used in herein, the terms "Timberline," the "Company," "we," "us," and "our"
refer to Timberline Resources Corporation.
This discussion and analysis contains forward-looking statements that involve
known or unknown risks, uncertainties and other factors that may cause the
actual results, performance, or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Except for historical information,
the matters set forth herein, which are forward-looking statements, involve
certain risks and uncertainties that could cause actual results to differ.
Potential risks and uncertainties include, but are not limited to, unexpected
changes in business and economic conditions; significant increases or decreases
in gold prices; changes in interest and currency exchange rates; unanticipated
grade changes; metallurgy, processing, access, availability of materials,
equipment, supplies and water; results of current and future exploration and
production activities; local and community impacts and issues; timing of receipt
and maintenance of government approvals; accidents and labor disputes;
environmental costs and risks; competitive factors, including competition for
property acquisitions; and availability of external financing at reasonable
rates or at all, and those set forth under the heading "Risk Factors" in our
Form 10-K filed with the United States Securities and Exchange Commission (the
"SEC") on December 29, 2022. Forward-looking statements can be identified by
terminology such as "may," "will," "should," "expects," "intends," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," "continues" or
the negative of these terms or other comparable terminology. Although the
Company believes that the expectations reflected in the forward-looking
statements are reasonable, it cannot guarantee future results, levels of
activity, performance, or achievements. Forward-looking statements are made
based on management's beliefs, estimates, and opinions on the date the
statements are made, and the Company undertakes no obligation to update such
forward-looking statements if these beliefs, estimates, and opinions should
change, except as required by law.
This discussion and analysis should be read in conjunction with the accompanying
unaudited consolidated financial statements and related notes. The discussion
and analysis of the financial condition and results of operations are based upon
the unaudited consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Company to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of any contingent liabilities at the
financial statement date and reported amounts of revenue and expenses during the
reporting period. On an on-going basis the Company reviews its estimates and
assumptions. The estimates were based on historical experience and other
assumptions that the Company believes to be reasonable under the circumstances.
Actual results are likely to differ from those estimates under different
assumptions or conditions, but the Company does not believe such differences
will materially affect our consolidated financial position or results of
operations. Critical accounting policies, the policies the Company believes are
most important to the presentation of its consolidated financial statements and
require the most difficult, subjective and complex judgments are outlined below
in "Critical Accounting Policies" and have not changed significantly.
Corporate Overview
Our business is mineral exploration in Nevada with a focus on district-scale
gold projects such as our material Eureka Project. We are focused on delivering
high-grade Carlin-type gold discoveries at Eureka. The Eureka Property includes
the historic Lookout Mountain and Windfall Mines in a total property position of
approximately 28 square miles (72 square kilometers). The Lookout Mountain
Resource was reported in compliance with Canadian NI 43-101 in an Updated
Technical Report on the Lookout Mountain Project by Mine Development Associates,
Effective March 1, 2013, filed on SEDAR April 12, 2013.
Effective January 1, 2021, the Securities and Exchange Commission ("SEC")
adopted amendments to modernize the property disclosure requirements for mining
registrants and related guidance, which are currently set forth in Regulation
S-K Subpart 1300 under the Securities Act of 1933 and the Securities Exchange
Act of 1934. The amendments more closely align the SEC's disclosure requirements
and policies for mining properties with industry and global regulatory practices
and standards. At the date of this report, we are supplementing the previously
issued Updated Technical Report on the Lookout Mountain Project with a Summary
of the Technical Report, this for the purpose of compliance with the disclosures
required by the pronouncements in Subpart 1300 as they relate to this material
property.
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We are also control multiple projects that are not material to the Company at
this time, pending further exploration activities, including:
· The multiple resources of the Eureka Property other than Lookout Mountain,
such as Windfall, Water Well, Rocky Canyon, Oswego and others, are
actively being explored through structured programs, but have not advanced
to becoming material to the Company as yet.
· The Paiute Joint Venture Project with Nevada Gold Mines in the Battle
Mountain District which, along with the Eureka project, lies on the
prolific Battle Mountain-Eureka gold trend.
· The Seven Troughs Project in northern Nevada, which is one of the state's
highest-grade former gold producers. We control over 43 square miles (111
square kilometers) of mineral rights in Nevada.
· During our fiscal year ended September 30, 2022 and continuing through the
quarter ended March 31, 2023, we have also acquired significant claims
holdings within the New York Canyon claim block.
Detailed maps and mineral resource estimates for the Eureka Project and NI
43-101 technical reports for its projects may be viewed
at http://timberlineresources.co/.
Summary of the exploration activities for the three months ended March 31, 2023:
Exploration Returns to the New York Canyon Target
Pursuant to previously reported purchases of patented claims and the purchase of
additional interests during the quarter, Timberline has moved forward with
exploration at the New York Canyon target within the northeast portion of the
Eureka Project (Figure 1).
At the date of this report, New York Canyon is not a material property to the
Company under Regulation S-K Subpart 1300, with no resources or reserves
computed or presented. Exploration activities over coming years would be
undertaken for the purpose of identifying the occurrence of minerals across the
property in sufficient quantities to quantify and report resources and reserves,
if appropriate at some future date.
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Figure 1 - Eureka Project Showing Major Targets and Patented Claims
[[Image Removed: tlrs_10qimg8.jpg]]
Recent mapping and sampling in the historical mining area have identified a new
drill target where high-grade gold and silver mineralization crop-out. The
Company's follow-up exploration will prioritize a cluster of high-grade rock
chip samples around the historical Eureka, Eureka Giant, and Seventy-Six Mines
(Figures 2 and 3), where results included high gold values of 55, 32, 23.3,
22.5, and 14.95 g/t, along with numerous other samples in the 0.5 to 5.0 g/t
range, and high silver values of 750*, 582.5, 558, 555, and 299 g/t, along with
many other samples exceeding 50 g/t silver.
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Figure 2 - Detailed Target Map of New York Canyon
[[Image Removed: tlrs_10qimg9.jpg]]
The New York Canyon target lies near the northern end of Timberline's 70 km2
Eureka project, and where prospectors staked some of the first claims in the
district in the 1860s. The early miners pursued the high grades of silver, lead,
and zinc (with gold credits) associated with carbonate replacement deposits
(CRD's). Exploration companies returned to the area in the 1980s and 1990s,
evidenced by the rock samples and drillholes shown on Figures 2 and 3, but the
patented claims over this particular target restricted access during that
period. Timberline now controls the patented claims at New York Canyon and plans
to aggressively explore the high-grade, gold-silver bearing structures during
2023.
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I80 Gold Corp. is actively drilling high-grade CRD-type silver-rich
mineralization at the nearby Ruby Hill Mine (approximately 3km northwest), and
Paycore Minerals has recently reported deep intercepts of silver and gold-rich
CRD mineralization at the Fad Shaft (approximately 2km west-northwest) (Figure
1).
Figure 3 - Gold and Silver in Rock Samples with Geology
[[Image Removed: tlrs_10qimg10.jpg]]
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Geology and Geochemistry of the New York Canyon Targets
The rocks in New York Canyon are dominated by the Ordovician-aged Eureka
Quartzite and the Hanson Creek formation. The Eureka Quartzite is an important
marker in the district since it makes prominent outcrops, but it is not a
significant host of gold or silver mineralization. The overlying Hanson Creek
formation hosts most of the mineralization in New York Canyon. It is a highly
fractured and brecciated gray to black dolomite, except where altered and iron
stained.
Around the historical mine workings and when highly mineralized, as in these
rock samples, the Hanson Creek is often bleached and decalcified or "sanded".
Iron staining is intense close to mineralization due to oxidation of the sulfide
minerals. Strong silver and gold values often occur in gossans, which are likely
the result of oxidation of semi-massive to massive CRD-related sulfides. The
decalcification and structurally controlled gold mineralization in the Hanson
Creek is characteristic of Carlin-type systems.
The geochemistry of the New York Canyon mineralization differs from the recently
drilled Water Well Zone deposit because it contains evidence of both
silver-dominant CRD's and Carlin-type gold. In addition to lead, zinc, and
copper, the high-grade samples reported here are commonly enriched in arsenic,
antimony, thallium, mercury, barium, and sometimes bismuth and molybdenum. Such
complex geochemistry may represent overprinting mineral systems wherein the
earlier CRD mineralization enriched the rocks in silver, base metals, arsenic,
antimony, bismuth, and molybdenum, and the later Carlin-type gold bearing fluids
used the same structures to infuse more arsenic, antimony, thallium, barium, and
mercury.
Ordovician Pogonip Group rocks occur to the west of the Eureka Quartzite and dip
east beneath the areas of historical mining and recently discovered high-grade
gold and silver. The Pogonip Group includes the Goodwin and Nine Mile
formations, which are known to be important host rocks at the Ruby Hill Mine.
Prominent northwest-striking faults offset the contacts between these Ordovician
rocks and appear to be important controls of gold and silver mineralization in
the northern reaches of New York Canyon. This area has seen less modern
exploration due to the privately-held patented claims, and it will be a focus in
Timberline's 2023 work program.
The 2023 drill program will test this extensive area of outcropping gold,
silver, and base metal mineralization, which consists of mineralized veins,
breccias, and structures, as well as the underlying, highly prospective Goodwin
and Nine-Mile formations at depth. Timberline will continue to map and model
these structures in the subsurface to aid in targeting. Figure 3 shows the gold
and silver values from rock chip sampling overlain on the geology of the New
York Canyon target area.
2023 Work Program at Eureka Project
The Company announced its 2023 work plan for the Eureka Project, which will
include a mix of exploration, engineering, and baseline environmental work
touching several targets across the property. The program includes the first
drilling of the CRD type gold-silver targets at New York Canyon and a return to
several surface oxide gold targets at the Lookout Mountain Deposit. The Company
also plans to test for extensions of the Carlin-type gold system at the Water
Well Zone (WWZ). The plan to drill several different areas in 2023 is a
reflection of the different stages of discovery and development at the multiple
targets across the 70 km2 project.
An important aspect of the 2023 program will be to update the operational and
permitting plan with state and federal regulators. Timberline initiated
metallurgical, engineering, and environmental work between 2012 and 2014. The
2023 plan includes several near-term tasks, longer lead time items, and baseline
monitoring to build out the key project development databases, these include:
· Review metallurgical data and initiate additional testing by rock type and
particle size
· Update waste rock and geochemical characterization studies
o Revisit studies from 2012 - 2014 and augment as necessary
o Drill core samples for additional environmental test work
· Drilling for additional geotechnical studies to aid in pit design
· Biological surveys (vegetation and wildlife) according to a prescribed
seasonal schedule
· Surface & groundwater study, including piezometers and monitoring wells
· Completion of the cultural and archaeological survey
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First Drilling at the New York Canyon Target
Some of the historical patented claims at New York Canyon date back to the
earliest days of the Eureka mining district when high grade silver CRD-type
mineralization sparked a boom that led to one of America's biggest silver
districts. The recent drill success from i80 Gold, Paycore Minerals, and
Timberline's 2021-2022 drillholes northeast of the WWZ suggest that the full
extent of that silver-rich system is not yet known. Timberline recently reported
surface sampling from newly acquired claims in New York Canyon that included
very high silver and gold values over a significant area (see Company news
release dated February 2, 2023).
The 2023 drill season will begin at New York Canyon. The initial drill target
lies on the patented claims that are cut by a high-quality gravel road that
intersects US Highway 50 approximately 1 kilometer to the north. The high gold
and silver samples occur in the Hanson Creek formation at surface, but
Timberline geologists believe that the high grades are controlled by
northwest-striking faults as shown on Figure 3. There is also a deeper target
where favorable rocks from the Pogonip group are projected to dip beneath the
high-grade surface showing and should also be cut by the faults.
Timberline plans to drill several reverse circulation (RC) holes across the
controlling structures and beneath outcropping veins and alteration. Since this
is the first drilling into this target, the program will also include one or two
core holes in order to better understand the geological controls on the
high-grade. The easy road access and patented claim holdings will facilitate a
rapid start to the 2023 drill season at New York Canyon.
New Exploration Targets along the Lookout Trend
The Lookout Mountain gold resource comes to surface and includes significant
oxide mineralization. After its acquisition of Staccato Gold in 2010, Timberline
advanced the resource with initial metallurgical, environmental, and geochemical
test work, as well as preliminary geotechnical and mine design studies before
publishing its NI 43-101 technical report in 2013. The Company intends to move
forward with additional test work, engineering, and environmental studies during
2023 before updating the mineral resource late in the year. The resource can be
found in the NI-43 101 Updated Technical Report on the Lookout Mountain Project
by Mine Development Associates, Effective March 1, 2013, filed on SEDAR on April
12, 2013.
During late 2020, Timberline drilled several holes within the resource that
confirmed and upgraded a thick zone of oxide mineralization in the northern
portion of the Lookout Mountain resource area (See Company news releases dated
December 1, 2020 and January 7, 2021). The highlights of that drilling included
BHSE-176, which yielded 15.24m averaging 10.09 g/t gold, beginning at 21.34m
downhole depth, including 9.14m of 16.31 g/t gold, and BHSE-186, which
intercepted 6.10m of 5.21 g/t gold from 4.57m depth. Of particular interest was
a high-grade zone of oxide mineralization beneath the historical open pit that
was in need of more drilling to better define its shape.
The Lookout Trend is defined for more than six kilometers in a roughly
north-south direction (Figure 4). The discovery history in the area has shown
that when higher grades of gold cluster in drill holes, there are opportunities
to offset along structural or lithologic targets and identify significant new
mineralization. This model led to the discovery of the WWZ, and during 2023,
Timberline will address several new target areas, including the historical
Lookout Mountain Pit, South Lookout, Rocky Canyon, and the North Gap.
Several historical drill holes in the South Lookout target area offer
encouragement that the zone of thicker +1 g/t oxide mineralization may be more
extensive than previously thought. An example from historical drilling was drill
hole BHSE-096, which intercepted 61m of 1.54 g/t gold hosted primarily in
oxidized Hamburg formation. This drill hole dates to approximately 2011, and it
was included in the resource calculation, however, the drill spacing is very
wide in this area. This type of thicker higher grade oxide mineralization may
have a positive impact on the resource once better tested and defined.
There is very little drilling north of the Lookout Resource, perhaps because of
major faulting in the area that presents different rocks at the surface.
However, there is considerable alteration at surface, and the younger rocks in
the area are known to be important hosts at the Ruby Hill Mine to the north.
There are several high-grade intercepts in the Rocky Canyon area that warrant
returning to this corridor with inexpensive RC drilling to test Timberline's
improved geologic model.
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Timberline's 2021 and 2022 drilling to the east of the resource intercepted
numerous significant intercepts of higher-grade gold down dip in the Water Well
Zone (see Company news releases dated October 27, 2021, February 24, 2022, and
March 9, 2022). The geologic model for the Lookout mineral system now clearly
illustrates the presence of major faulting that both localizes higher grades of
gold and offsets the rocks down to the east. The deeper high-grade sulfide
Carlin-type mineralization in the WWZ remains open to the east and south. Later
in the year, the Timberline team expects to return to that target to test an
area called Water Well East, which is associated with important faults in the
area and a strong IP chargeability anomaly.
Figure 4 - Lookout Mountain Resource Area and 2023 Drill Targets
[[Image Removed: tlrs_10qimg11.jpg]]
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All of these new targets combined with the significant historical resource
development work at Lookout Mountain necessitate moving forward with additional
metallurgical, engineering, environmental, and permitting work.
Advancing the Resource with Metallurgy, Engineering, and Environmental Work
Timberline expects to update its mineral resource at the Eureka Project late in
the year. Earlier work on the metallurgy, design, and waste rock management of
the Lookout Mountain resource has laid a good foundation to advance the project
towards economic studies, but the Company will be filling in gaps and adding to
those databases which commenced in Q2 of this year. Timberline has been working
with its lead permitting consultant, Westland Resources of Reno, Nevada, for a
number of years. The team will update its permitting operating plan with state
and federal regulators.
Some of the drilling in 2023 will serve the dual purpose of providing material
for gold leach testing and increasing the density of drilling within the
resource. The metallurgical program will include consulting with metallurgical
testing labs in Nevada to design additional test work aiming to optimize the
gold recovery from a potential future mine. Earlier reports noted improved gold
recoveries after finer crushing or with crushing alternatives, such as
high-pressure grinding rolls, and the Timberline team will continue this test
work, which is likely to include more column leach tests.
A restart of surface mining at Eureka would require a rigorous plan for
management of waste rock. This is accomplished with targeted geochemical
analyses, acid/base accounting, and longer-term humidity cell tests. Some of
this testing was conducted in the period between 2012 and 2014, but there will
be additional testing and analysis of the historical data.
In order to secure the data needed for key permits, Timberline is also planning
to commence a number of biological surveys during the year, including vegetation
and wildlife. Large areas of the project have been subjected to archeaological
and cultural surveys as part of its current Plan of Operations with the Bureau
of Land Management. Some areas in the western part of the project may see
additional cultural survey work because of their potential use in hosting mine
facilities in the future.
The path to permits also includes extensive study of ground and surface water
resources in the project area. While any early stages of mining are likely to
operate above the water table, Timberline will install a network of piezometers
to confirm water table conditions. The project will also require installation of
additional monitoring wells. Consultants have already recommended sites for
surface water monitoring and baseline sampling.
Results of Operations for the three and six months ended March 31, 2023 and 2022
Consolidated Results
Three Months Ended Six Months Ended
(US$) March 31, March 31,
2023 2022 2023 2022
Exploration expenses:
Eureka $ 44,934 $ 422,819 $ 486,971 $ 1,654,023
Other exploration properties 51,488 63,145 132,094 146,309
Total exploration expenditures 96,422 485,964 619,065 1,800,332
Non-cash expenses:
Stock option expenses 11,087 - 62,795 44,321
Depreciation, amortization and
accretion 1,715 1,548 3,430 2,956
Total non-cash expenses 12,802 1,548 66,225 47,277
Professional fees expenses 50,651 29,073 113,511 94,704
Insurance expenses 40,389 41,967 84,918 73,447
Salaries and benefits expenses 67,225 71,611 127,681 147,931
Interest and other (income) expense 13,946 9,273 25,393 23,025
Other general and administrative
expenses 103,064 58,287 229,249 135,230
Net loss $ 384,499 $ 697,723 $ 1,266,042 $ 2,321,946
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Our consolidated net loss for the three months ended March 31, 2022 was
$384,499, compared to a consolidated net loss of $697,723 for the three months
ended March 31, 2022. Total exploration expenses of $96,422 were recorded on our
statement of operations for the three months ended March 31, 2023, compared with
$485,964 for the three months ended March 31, 2022. The year-over-year decrease
in net loss is mainly due to a decrease in exploration expense, combined with
slight decreases in insurance expense and salaries expense during the three
months ended March 31, 2023.
Our consolidated net loss for the six months ended March 31, 2023 was
$1,266,042, compared to a consolidated net loss of $2,321,946 for the six months
ended March 31, 2022. Total exploration expenses of $619,065 were recorded on
our statement of operations for the six months ended March 31, 2023, compared
with $1,800,332 for the six months ended March 31, 2022. The year-over-year
decrease in net loss is due to the significant decrease in exploration expenses
and salaries expense.
Subject to adequate funding in 2023, we expect to continue to incur exploration
expenses for the advancement of our Eureka Project.
Financial Condition and Liquidity
At March 31, 2023, we had assets of $15,179,371, consisting of cash of $471,234,
property, mineral rights and equipment of $14,108,046, net of depreciation,
reclamation bonds of $528,643, and prepaid expenses, deposits and other assets
in the amount of $71,448.
On March 31, 2023, we had total liabilities of $567,856 and total assets of
$15,179,371. This compares to total liabilities of $1,157,467 and total assets
of $16,972,229 on September 30, 2022. As of March 31, 2023, our liabilities
consist of $140,610 for asset retirement obligations, $270,991 of senior
unsecured note payable - related party, and $67,639 of trade payables and
accrued liabilities and $88,617 of interest and expenses payable to related
parties. Of these liabilities, $427,246 are due within twelve months. The
liabilities compared to September 30, 2022 have changed as a result of a
decrease in trade payables and accrued liabilities offset by increases in
accrued interest - related party. The decrease in total assets was due to the
usage of cash to reduce accounts payable and to pay Company operating expenses,
offset by an increase in prepaid expenses and property, mineral rights, and
equipment.
On March 31, 2023, we had working capital of $109,736 and stockholders' equity
of $14,611,515 compared to working capital of $1,423,723 and stockholders'
equity of $15,814,762 for the year ended September 30, 2022. Working capital
experienced an unfavorable change because of the decrease in cash associated
payments of accounts payable and operating expenses, offset by increases in
accrued interest - related party.
During the six months ended March 31, 2023, we used cash from operating
activities of $1,853,183, compared to cash used of $2,386,948 for the six months
ended March 31, 2022. The use of cash from operating activities results
primarily from the net loss of $1,266,042 for the six-month period ended March
31, 2023 compared to net loss of $2,321,946 for the six months ended March 31,
2022. Changes to the net loss for the comparative periods are described above.
During the six-month period ended March 31, 2023, cash of $114,170 was used by
investment activities, compared with cash of $36,000 used by investment
activities for the six-month period ended March 31, 2022. During the six months
ended March 31, 2023, we used $114,170 for mineral rights compared to $36,000
paid for mineral rights for the six months ended March 31, 2022.
During the six-month period ended March 31, 2023, no financing activities
occurred, compared to cash of $146,499 provided during the six-month period
ended March 31, 2022.
Going Concern:
The audit opinion and notes that accompany our consolidated financial statements
for the year ended September 30, 2022 disclose a 'going concern' qualification
to our ability to continue in business. These consolidated financial statements
have been prepared on the basis that the Company is a going concern, which
contemplates the realization of our assets and the settlement of our liabilities
in the normal course of our operations. Disruptions in the credit and financial
markets over the past several years have had a material adverse impact on a
number of financial institutions and investors and have limited access to
capital and credit for many companies. In addition, commodity prices and mining
equities have seen significant volatility which increases the risk to precious
metal investors. Market disruptions and alternative investment options, among
other things, make it more difficult for us to obtain, or increase our cost of
obtaining, capital and financing for our operations. Our access to additional
capital may not be available on terms acceptable to us or at all. If we are
unable to obtain financing through equity investments, we will seek multiple
solutions including, but not limited to, asset sales, corporate transactions,
credit facilities or debenture issuances in order to continue as a going
concern.
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At March 31, 2023, we had working capital of $109,736. We had $427,246
outstanding in current liabilities and a cash balance of $471,234. As of the
date of this report on Form 10-Q, we have sufficient cash to meet our normal
operating commitments for the next 12 months, without consideration of new
exploration programs. Therefore, we do not expect to be required to engage in
financial transactions to increase our cash balance or decrease our cash
obligations in the near term. However, we are an exploration company with
exploration programs that require significant cash expenditures. A significant
drilling program, such as that we have recently executed, can result in
depletion of cash and return us to a position of insufficient cash to support
normal operations for the following 12 months. Such cash-raising efforts may
include equity financings, corporate transactions, joint venture agreements,
sales of assets, credit facilities or debenture issuances, or other strategic
transactions.
The condensed consolidated financial statements do not include any adjustments
that might be necessary should we be unable to continue as a going concern. We
believe that the going concern condition cannot be removed with confidence until
the Company has entered into a business climate where funding of its activities
is more assured. If the going concern basis were not appropriate for these
financial statements, adjustments would be necessary in the carrying value of
assets and liabilities, the reported expenses and the balance sheet
classifications used.
We plan, as funding allows, to follow up on our positive drill results on our
Eureka and Paiute Projects. Principally, we plan to execute drilling as part of
the ongoing exploration program at Eureka. Also, subject to available capital,
we may continue prudent exploration programs on our material exploration
properties and/or fund some exploratory activities on early-stage properties.
We will require additional funding and/or reductions in exploration and
administrative expenditures in future periods. Given current economic
conditions, we cannot provide assurance that necessary financing transactions
will be available on terms acceptable to us, or at all. Without additional
financing, we would have to curtail our exploration and other expenditures while
we seek alternative funding arrangements to provide sufficient capital to meet
our ongoing, non-discretionary expenditures, and maintain our primary mineral
properties. If we cannot obtain sufficient additional financing, we may be
unable to make required property payments on a timely basis and be forced to
return some or all of our leased or optioned properties to the underlying
owners.
Financing Activities
None
Subsequent Events
On April 27, 2023, the Company's Board of Directors approved a non-brokered
private placement of units of the Company's equity at a price of US$0.08
(approximately C$0.11) per unit, for gross proceeds of up to US$3,000,000. The
offering is subject to approval by the TSX Venture Exchange. Each unit will
consist of one share of common stock of the Company and one-half of one common
share purchase warrant, with each full warrant exercisable to acquire an
additional share of common stock of the Company at a price of US$0.12 per share
for three years from the date of issuance. The Company plans to use the net
proceeds of the offering primarily for exploration, resource development, and
permitting at its Eureka Project on the Battle Mountain-Eureka Trend, and for
general corporate purposes. Finders' fees and consulting fees may be payable by
the Company in relation to the offering. Certain insiders may participate in the
offering. As agreed with a related party, up to 25% of the placement would be
used to satisfy the senior unsecured note payable balance of $270,991, plus
interest accrued thereon.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that are reasonably likely to
have a current or future effect on our financial condition, revenues, results of
operations, liquidity or capital expenditures.
Critical Accounting Policies and Estimates
There have been no significant changes to the critical accounting policies and
estimates disclosed in Management's Discussion and Analysis of Financial
Condition and Results of Operation in our 2022 Form 10K.
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TIMBERLINE RESOURCES CORPORATION 