Timberline Announces Positive Metallurgical Test Results From Its Talapoosa Gold Project

COEUR D'ALENE, IDAHO--(Marketwired - Jan. 31, 2017) - Timberline Resources Corporation (OTCQB:TLRS)(TSX VENTURE:TBR) ("Timberline" or the "Company") announced today positive preliminary results from on-going metallurgical testing being performed on mineralized material at its Talapoosa gold project in Lyon County, Nevada. The testing is designed to confirm the predicted gold and silver recoveries and assess leaching efficiency in the processing of the mineralized material as identified in the Company's Preliminary Economic Assessment ("PEA") issued in May 2015. In addition, the testing supports the work of previous operators and will guide planning for additional testing planned in advance of engineering design.

The positive Talapoosa PEA that was completed and released on April 27, 2015 by WSP Canada envisioned the project as an open-pit, gold-silver, heap-leach operation ("Preliminary Economic Assessment on the Talapoosa Project, Nevada, effective April 27, 2015). PEA results included:

• Estimated average annual production of 55,000 oz of gold and 679,000 oz of silver for 11 years
• LOM all-in sustaining costs of $599/oz gold (net of silver by-product at $16/oz silver price)
• After-tax NPV_5% of $136 million and 39% IRR at $1,150/oz gold price and $16/oz silver price
• Low initial capital requirement of $51 million.

Timberline's President and CEO Steven Osterberg commented, "The metallurgical testing was designed to confirm, and potentially enhance, gold and silver recoveries estimated in the PEA, which result in very attractive project economics. The testing also provides data to support processes that de-risk the operating plan and confirm the potential to increase recoveries by alternate processing methods."

Permeability Testing

Metallurgical testing is on-going on four drill core composite samples duplicating those collected and tested in 2012 by Gunpoint Exploration ("Gunpoint") from the Bear Creek Hanging Wall ("BCHW") and Bear Creek Footwall ("BCFW") zones. The BCHW and BCFW zones of mineralized material represent the majority of the Talapoosa gold and silver deposit. Each composite sample was crushed by high pressure grinding roll ("HPGR") to -1.7mm (-10 mesh), and separated by screening into a fine fraction (-75um or -200 mesh) and a coarse fraction (+75um or +200 mesh).