Preliminary Economic Analysis for Its Butte Highlands Gold Project

COEUR D'ALENE, ID - Timberline Resources Corporation reported highlights from a preliminary in-house economic analysis of its 100-percent owned, royalty-free Butte Highlands Gold Project in southwestern Montana.
Nearly 100,000 feet of past drilling by major and junior mining companies outlined historic mineralization (pre-dating and not compliant with NI 43-101 or SEC Guide 7) exceeding 500,000 ounces of gold. The preliminary analysis assumes the successful confirmation of this historic mineralization, including its tonnage and average grade, which is the primary objective of the current drill program. Highlights of the analysis include:
* A 2-year development time, primarily to drive an exploration
   decline to access mineralization, which may also serve as a
   production ramp, and cut underground drill stations, at an
   estimated cost of $15-million to $18-million.

 * Custom milling at nearby facilities with excess capacity,
   bypassing the need to permit and construct an onsite mill and
   tailings pond.

 * A 1,000 ton-per-day operation at an average grade of 0.287 ounces
   of gold per ton, yielding annual gold production of approximately
   85,000 ounces per year over a 5-year mine-life.

 * Sensitivity analysis indicating robust economics at gold prices as
   low as $500 per ounce.
Timberline V-P of Exploration Paul Dircksen stated, ``While our in-house analysis is preliminary in nature, these results are very compelling, especially given the current market conditions.''
Timberline CEO Randal Hardy added, ``Our business model was conceived out of our belief that investor sentiment would eventually shift to favor hard assets and related businesses, such as drilling, mine development, and mining. We believe that the prevailing market instability is likely to hasten this shift and that we are well-positioned to benefit from it.''
The preliminary analysis is part of Timberline's ongoing Preliminary Scoping Study at Butte Highlands and was conducted by Small Mine Development (``SMD''), which is expected to perform all development work for the project and is familiar with district geology. As previously announced, Timberline has signed a definitive agreement to acquire SMD and recently received shareholder approval to make the acquisition.