Timberline Resources (TLR): Net Income Sensitivity Analysis
Timberline Resource Corp’s Butte Highlands gold project is fully funded to production (Q4 2010). Butte Highlands is estimated to produce 50,000 – 75,000 ounces of gold annually at an estimated cost of $400 to $500 per ounce. At an average expected grade of 0.27 ounces of gold per ton, and a projected production rate of 750 tons per day, the Butte Highlands Gold Project is expected to have a mine life of over ten years. With Gold reaching all time highs almost daily, Timberline’s anticipated first year Net Income is following a similar trajectory. With the stock at $1.25, there is plenty of room for upside here.
| Gold Price | Net Income | FD EPS |
| 900 | $14,000,000 | $0.29 |
| 1000 | $17,150,000 | $0.36 |
| 1100 | $20,300,000 | $0.43 |
| 1200 | $23,450,000 | $0.50 |
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Hey Ian, Ive been buying tlr between 1.00-1.20. Would you be adding at these levels or do you think gold is due for a pullback giving the recent runup? thx.
Tyson:
I believe that it is a good buy. Most gold producers trade at 10-15x operating cash flow, so unless gold drops like rock back to $600-700/oz you should make good money off those buys . Just like with any asset class, corrections are normal and healthy. I am bullish on gold but am also aware that $100-200 pull backs will occur.
IC