Timberline Proceeding With Acquisition Of SMD

COEUR DA'ALENE, ID - Timberline Resources Corporation reported an update on the progress of its anticipated acquisition of Small Mine Development, LLC (``SMD''). On December 5, 2007, Timberline announced the signing of a non-binding Letter of Intent to acquire SMD, one of the largest underground mine contractors in the United States. Ron Guill, the founder, owner, and general manager of SMD, joined the Timberline Board of Directors in November 2007.
Timberline Executive Chairman John Swallow stated, ``While the acquisition process has taken longer than expected, we are proceeding toward a definitive Purchase Agreement. The original terms of the deal remain essentially unchanged and our working relationship with Ron and his team is excellent. This transaction requires shareholder approval and upon receipt of shareholder approval and closing, the SMD acquisition is expected to quadruple our revenue and provide us with the critical mass to be a significant player in the North American mining services industry.
SMD is a 25 year-old privately-held company with over 300 employees and approximately $100 million in annual revenues. It has risen to a position of industry leadership through a lean, flexible management style, empowering on-site operational teams to execute important decisions with significant autonomy.