Timberline Resources Encounters Significant Gold Mineralization at Lookout Mountain

Timberline Resources Corporation (TSX VENTURE:TBR) (NYSE Amex:TLR) today reported assay results for a series of drill holes, including hole number BHSE-029C, which returned 0.35 opt (12.1 g/t) of gold over 58.0 feet (17.7 metres).

This high grade intercept represents significant sulfide bearing gold mineralization within the Lookout Mountain mineral system currently being advanced as part of the greater South Eureka Property. BHSE-029C was drilled as a metallurgical in-fill hole and is complemented by other historic drill holes within the zone.

Since September, Timberline has drilled over 28,000 feet (core and RC) within the project, including 9,000 feet of RC drilling subsequent to the last drilling update. Reported assay results further define the outlined mineralization and indicate thicker intercepts of low grade material which expand the known mineralization to the south of the historic Lookout Mountain Pit. Bulk channel samples and drill core have been submitted to Kappes-Cassiday in Reno for ongoing metallurgical testing.

Paul Dircksen, Timberline's Executive Chairman and Vice-President of Exploration stated, "We continue to be very pleased with our progress at our South Eureka Property. This typical sediment-hosted gold project located in the productive Battle Mountain-Eureka Trend in Nevada contains both high-grade sulfide mineralization as well as widely-disseminated lower grade oxide gold mineralization. Drill results continue to support and expand our resource model and metallurgical data continues to support our premise that the oxide mineralization is amenable to become a run-of-mine heap leach operation. We are on schedule to produce an independent 43-101 resource estimate by March 2011. Exploration activities continue to enhance targets for further exploration and potential resource expansion."

Timberline continues to evaluate opportunities to acquire additional advanced stage properties, such as South Eureka, that meet and are consistent with the goal of adding value by further advancing exploration, and then realizing that added value for shareholders by monetizing projects for development to production.