Timberline Extends Talapoosa Option Agreement

COEUR D'ALENE, IDAHO--(Marketwired - Oct. 20, 2016) - Timberline Resources Corporation (OTCQB:TLRS)(TSX VENTURE:TBR) ("Timberline" or the "Company") is pleased to announce that the Company has successfully restructured the terms of its option agreement (the "Option Agreement") with Gunpoint Exploration Ltd. (TSX VENTURE:GUN) ("Gunpoint") to acquire 100% of the Talapoosa gold project in Nevada (the "Talapoosa Option").

The Company's primary objective in restructuring the Option Agreement was achieved by extending the option exercise period from September 12, 2017 to March 31, 2019 (the "Option Exercise Closing Date"). The requirement to pay Gunpoint US$10 million by September 12, 2017 has now been modified and extended to March 31, 2019, thereby allowing near-term expenditures to be focused toward advancement of the Talapoosa gold project.

The following summarizes the amended terms of the Option Agreement:

• Payment of US$1 million and one million common shares of the Company by March 31, 2017;

• Payment of US$2 million and one million common shares of the Company by March 31, 2018;

• A final payment of US$8 million and 1.5 million common shares of the Company on March 31, 2019;

• Timberline agrees to undertake cumulative project expenditures of a minimum of US$7.5 million by December 31, 2018;

• Elimination of Timberline's US$3 million purchase option of the 1% net smelter return royalty ("NSR") retained by Gunpoint upon Timberline's acquisition of Talapoosa; and,

• The contingent payment based on escalating gold prices in the Option Agreement has been revised such that if gold prices average greater than or equal to US$1,600 over any 90 day period ("Trigger Event") within a 5-year period commencing on the Option Exercise Closing Date, Timberline will pay Gunpoint an additional payment of US$10 million of which a minimum of US$5 million will be payable within six months of the Trigger Event, and the remaining US$5 million payable within twelve months of the Trigger Event, with both payments payable with 50% in cash and 50% in shares at Timberline's discretion.

Timberline's President and Chief Executive Officer, Steven Osterberg, commented, "We are very pleased to have extended the Talapoosa purchase option exercise date, which will allow for the completion of additional drilling, metallurgical testing, engineering, and permitting. It is anticipated that these required project expenditures will provide for more rapid advancement toward development as an open-pit, heap leach operation. Given Talapoosa's advanced stage and favorable jurisdiction, we are excited to move forward with this gold project that already has over 1.3 million ounces of gold defined and clear growth potential by way of further drilling. We appreciate the flexibility and willingness of Gunpoint's Board of Directors to provide this extension, and we look forward to working with them as they continue as a very significant and supportive Timberline shareholder."