Mr. Paul Dircksen reports

TIMBERLINE RELEASES SCHEDULE FOR PUBLICATION OF FINAL ENVIRONMENT IMPACT STATEMENT AT BUTTE HIGHLANDS GOLD PROJECT IN MONTANA

Timberline Resources Corp. has received from the Montana Department of Environmental Quality an estimated schedule for the completion and publication of the final environmental impact statement at the Butte Highlands gold project, a proposed underground gold mine in development south of Butte, Mont.

This schedule demonstrates significant progress toward the completion of the FEIS, which is the most critical step toward the issuance of the final hard rock operating permit for the project. Kristi Ponozzo, Montana environmental policy co-ordinator for the MDEQ, provided the letter, which stated that the most recent information provided to the MDEQ on Oct. 8, 2014, by Butte Highlands JV LLC, the joint venture operator of the Butte Highlands gold project, allows the MDEQ to complete the FEIS.

The MDEQ estimates in its schedule that it will publish the FEIS on Monday, Dec. 22, 2014. The MDEQ has provided the company with the specific steps of the continuing MDEQ process and their related completion dates.

                         MDEQ SCHEDULE ESTIMATION

Activity                                   Start date Completion date

Contractor developed mitigation                                             
response table                          Oct. 10, 2014   Oct. 16, 2014
MDEQ reviews mitigation response table  Oct. 16, 2014   Oct. 20, 2014
Contractor revises responses to                                             
comments on draft EIS based on                                             
mitigation response table               Oct. 20, 2014    Nov. 4, 2014
MDEQ reviews revised responses to                                           
comments on draft EIS                    Nov. 4, 2014   Nov. 11, 2014
Contractor prepares FEIS revisions       Nov. 4, 2014   Nov. 21, 2014
MDEQ completes final review of FEIS     Nov. 21, 2014    Dec. 5, 2014
FEIS prepared for release and                                               
published                                Dec. 5, 2014   Dec. 22, 2014

Following the publication of the FEIS, the next step will be publication of the record of decision by the MDEQ. By law, the MDEQ may publish the ROD no earlier than 15 days after the FEIS is published. Therefore, the ROD is expected to be published in early January, 2015. The issuance of the final HROP is expected to follow the publication of the ROD upon calculation and remittance of the required bond to the MDEQ.

Publication of the FEIS will also advance the haul road permitting. BHJV has been informed by the United States Forest Service that it intends to release the final environmental assessment on the plan of operations for material haulage after the FEIS is published. As such, BHJV anticipates that the final EA will be completed in the first quarter of 2015.

Timberline's president and chief executive officer, Paul Dircksen, commented: "It is gratifying to see the lengthy permitting process at Butte Highlands leading to an attainable schedule provided by the MDEQ for publication of the Final EIS, and the foreseeable completion of the associated ROD and Final HROP. We will continue to press for the timely completion of the required permits, bonding, road construction and enhancements, and final project development to allow this project to commence production."

Timberline owns a 50-per-cent carried-to-production interest in BHJV, which owns the Butte Highlands gold project, located approximately 15 miles south of Butte, Mon., where mining is expected to commence following the issuance of the final hard rock operating permit and the USFS approval of a road use plan of operations for material haulage. The project is located within a favourable geologic domain that has hosted several world-class, multimillion-ounce gold deposits including Butte, Golden Sunlight, Montana Tunnels and Virginia City.

Timberline's joint venture partner has and is expected to continue to finance all mine development costs through to commercial production with Timberline's share of those costs to be repaid from proceeds of future mine production. The Butte Highlands gold project is an example of Timberline's strategy to participate in gold production through creative management and financial structures. The company expects to benefit from production without assuming the development risk and without dilutive equity financing or burdensome debt financing that would have been required if the company had financed the development.

We seek Safe Harbor.