SPOKANE, Wash., June 1, 2005 (PRIMEZONE) -- Timberline Resources Corporation (Pink Sheets:TBLC) announced today that it has signed a mineral lease agreement with Snowshoe Mining Company for their patented claims located west of the Snowstorm Mine. Timberline has also signed a Letter of Intent (LOI) with Western Goldfields, Inc. (OTCBB:WGDF) to enter into a mineral lease agreement for their unpatented claims located east of the Snowstorm Mine. The Snowstorm is located in northern Idaho's famous Silver Valley, near the Lucky Friday Mine, in Shoshone County, Idaho.
The Snowshoe property consists of 76 acres of patented claims, located to the west and south of the Snowstorm Mine. The Snowshoe agreement calls for annual payments from Timberline beginning at $8,000 and escalating to $15,000 for the duration of the agreement, a 3% Net Smelter Return royalty, and a $10,000 annual work commitment. Two exploration adits were developed on the Snowshoe claims from 1929 to 1940, driven in a northeasterly direction and apparently targeting the Snowstorm mineralized horizon. These adits are located about 2,000 feet west of the Snowstorm workings.
The Western Goldfields property consists of approximately 300 acres of unpatented lode mining claims. The claims extend easterly from near the Snowstorm Mine area, and cover over 4,500 feet along the projected strike of the Revett Formation quartzites that contain the Snowstorm mineralized horizon. Revett quartzites similar to those found at the Snowstorm host the well-known Montana stratabound copper-silver deposits.
The Western Goldfields LOI calls for an initial payment of 50,000 shares of Timberline stock, followed by annual stock grants totaling an additional 325,000 shares if the agreement continues to April 2008. The agreement further provides for a 2% Net Smelter Return royalty and gives Western Goldfields the option to purchase up to 250,000 shares of Timberline stock at $0.65 per share through April 1, 2006.
The claims to be acquired from Western Goldfields have potential to host an extension of the high grade Snowstorm ore body, which had historic production of 800,000 tons of 4% copper and 6 ounces of silver per ton. Geologic interpretation by prior operators has suggested that the lower portion of the Snowstorm may have been offset to the east by faulting. Historical data reviewed by Timberline indicates that a systematic exploration program for the truncated lower portion of the Snowstorm ore body has never been conducted.
The Snowstorm Project is located near the Lucky Friday Mine, in northern Idaho's famous Silver Valley. Timberline is the Earn-In phase of a joint agreement exploration agreement with Hecla Mining Company (NYSE:HL) for the project area, which consists of a core of over 700 acres of patented mineral rights owned by Hecla and approximately 725 acres of unpatented claims located by Timberline. The Snowshoe and Western Goldfields properties lie within the Area of Interest of the joint venture agreement, and will be unitized into the project area, subject to approval by Hecla.
Timberline has recently completed a program of dump sampling from mined rock near ten adits and a shaft located on the joint venture property. These adits have been developed intermittently along the northwest trend of the Snowstorm mineralized zone, and cover more than 5,000 feet of projected strike length of the target horizon. Timberline is analyzing these results to help identify drill site locations.
Timberline is preparing for a drilling program scheduled to begin during the summer of 2005, subject to receipt of the required financing. The initial holes will attempt to locate and establish the continuity of the Snowstorm mineralized horizon to the west of the existing Snowstorm workings.
Timberline Resources Corporation is a Spokane-based junior mineral exploration company focused on the cost-effective acquisition, exploration, and development of promising mineral properties in the western United States. Timberline's common stock is quoted on the OTC Market under the symbol "TBLC".
Certain statements contained in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on beliefs of management as well as assumptions made by and information currently available to management. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results.