COEUR d'ALENE - Timberline Resources Corp., headquartered in Coeur d'Alene, on Monday reported revenues of $7.44 million and a net income of $1.22 million for its contract drilling subsidiary, Timberline Drilling Inc., in the second quarter, which ended March 31.

Timberline is exploring and developing advanced-staged gold properties in the western U.S. The company primarily is focused on gold fields in Nevada.

Increased drill rig utilization led to a 45 percent revenue increase from the prior year. Improved average daily production rates and higher revenues per foot drilled contributed to a 125 percent increase in net income compared with the year earlier.

Timberline's exploration division and corporate office reported a net loss of $1.93 million for the second quarter, including exploration expenditures of $790,000 and non-cash expenses of $710,000 million.

Exploration expenditures for the second quarter increased over the previous year due to the completion of an extensive exploration and drilling program at Lookout Mountain, in Nevada, the most advanced project at the company's 23-square-mile South Eureka property.

Timberline CEO Paul Dircksen said, "These results demonstrate our commitment to continuing our aggressive exploration at South Eureka, including developing the foundation to fast-track the Lookout Mountain project toward possible development."

He said Timberline has confirmed "a substantial resource at Lookout Mountain with significant room for growth as we continue to drill along strike to the north and south of the resource area."

On the contract drilling side, Timberline's second quarter marked a return to profitability after a small expected loss primarily due to holiday shutdowns in the first quarter.

Dircksen said, "We expect to continue to generate significant cash flows and net income from Timberline Drilling throughout the remainder of the fiscal year."