Timberline Provides Initial Mine Plan and Permitting Update for the Butte Highlands Gold Project

Timberline Resources Corporation

today provided an initial mine plan and permitting update for the Butte Highlands Joint Venture Gold Project in southwestern Montana. With the receipt of final assays from last year's 50,000-foot underground drilling program, Timberline's joint venture partner and project operator, Highland Mining, of Boise, Idaho, has provided Timberline with the following guidance: -- The initial mine plan at Butte Highlands will target production of approximately 400 to 500 tons per day for the first four years of operation. The mineralized material is expected to be direct shipped to a nearby mill. -- Results from hydrology studies at Butte Highlands indicate the need to pump and discharge more water from the mineralized area than previously anticipated. The project will require an additional water discharge permit and the construction of additional water treatment facilities. Subsequently, Highland is now targeting the issuance of the Hard Rock Operating Permit in mid-2012, and the commencement of shipments to the mill later in the year. -- Highland is working with the United States Forest Service and the public to evaluate and permit a haulage route from the mine site. Highland will include its proposal as part of its final operating permit application responses to be submitted to the Montana Department of Environmental Quality. Highland is controlled by Ron Guill, a Timberline director and the Company's largest shareholder. Mr. Guill stated, "We have made considerable progress in the development and permitting of the gold mine at Butte Highlands. We are generating an initial mine plan for our first four years of production at a higher projected gold grade than was previously anticipated. However, as is very common with underground mining operations, our timelines have required modification as the project has advanced."