Mr. Kiran Patankar reports

TIMBERLINE RESOURCES DRILLING IDENTIFIES NEW ZONE OF GOLD MINERALIZATION AT EUREKA

Timberline Resources Corp. has recognized a new higher-grade zone of gold mineralization at the company's Eureka project in Nevada. Reverse circulation (RC) drill hole BHSE-171 intersected 25 feet of 0.144 ounce of gold per ton (7.62 metres of 4.93 grams of gold per tonne (g/t)) within a longer 65-foot interval assaying 0.094 ounce per ton (19.82 m of 3.22 g/t) in the Lookout Mountain area. This hole was offset 140 feet from BHSE-152 (drilled in 2012) which first encountered the new zone but was not completed due to drilling difficulties. Additional drilling at Lookout Mountain and the previously announced drill program at the Windfall target are expected to recommence in the next two weeks.

Kiran Patankar, Timberline's president and chief executive officer, commented: "BHSE-171 is significant for several reasons. First, the mineralization identified represents a new discovery at Eureka and validates the conceptual target identified by our technical team. Given our demonstration of continuity over 140 feet, it is reasonable to believe that we have not yet seen the centre of the mineralization. With several thousand feet of untested strike extent, the Eureka project now has clear potential for a large underground bulk-minable gold deposit."

Results from BHSE-171, as well as the previously drilled BHSE-152, are presented in the associated table.

                                 DRILL RESULTS
                                                                             
                From      Length      Gold        From      Length      Gold
Drill hole    (feet)      (feet)     (opt)    (metres)    (metres)     (g/t)

BHSE-171         990          65     0.094       301.8       19.82      3.22
including      1,020          25     0.144       311.0        7.62      4.93
BHSE-152       1,025        15.0      0.14       312.4         4.6      4.73

The mineralization intersected in holes BHSE-171 and BHSE-152 is well correlated and represents a newly recognized zone of higher-grade gold mineralization at depth associated with the existing resource at Lookout Mountain. The company's current National Instrument 43-101-compliant gold resource is defined over, and open beyond, a strike length of 4,000 feet. This new gold zone occurs within the favourable Dunderberg shale near the brecciated contact with the Secret Canyon formation and may represent a higher-grade feeder system as recognized in many Carlin-type systems.

Drilling at Lookout Mountain is planned to resume in January and will initially include two additional holes to offset BHSE-171. Having now identified the mineralized zone through initial RC drilling, follow-up core drilling will sample the mineralized section to more accurately assess gold grade, stratigraphic and structural controls, and target geometry.

The program is also expected to include RC drilling at Windfall in order to test the strike extension and follow up on historic gold mineralization and the exploration target previously disclosed (Dec. 17, 2014, press release).

Timberline's current gold resource estimate at Lookout Mountain, which was prepared by Mine Development Associates (MDA) of Reno, Nev., consists what is shown in the associated table.

                      LOOKOUT MOUNTAIN GOLD RESOURCE                   
                                                                            
                                             Ounces of    Grams of          
Resource                  Short      Metric   gold per    gold per      Gold
category                   tons      tonnes  ton (opt) tonne (g/t)    ounces
                                                                            
Measured              3,043,000   2,761,000      0.035        1.20   106,000
Indicated            25,897,000  23,493,000      0.016        0.55   402,000
Measured and                                                                  
indicated            28,940,000  26,254,000      0.018        0.62   508,000
Inferred             11,709,000  10,622,000      0.012        0.41   141,000
                                                                     

The full MDA resource estimate with various cut-off grades can be seen at the company's website.

Timberline's district-scale Eureka project is strategically located within the greater Eureka mining district, just four miles from Barrick Gold's multimillion-ounce Archimedes/Ruby Hill mine. The Eureka project features three distinct zones defined by structure and geochemistry and includes past-producing open pits, along with several untested zones and underexplored exploration targets. In addition to the estimated resources, there is an exploration target totalling 185,000 to 200,000 ounces of gold at the Windfall structural trend that grades approximately 0.024 ounce per ton to 0.027 ounce per ton using a 0.010-ounce-per-ton cut-off. Detailed maps can be viewed at the company's website.

Note

A qualified person has not done sufficient work to classify the exploration target estimates as current mineral resources. The company is not treating the exploration target estimates as current mineral resources and the exploration target estimates should not be relied upon. The management estimates of the exploration target at Windfall were determined based on drill results and geologic modelling using polygonal grade shells with a 0.01-ounce-per-ton cut-off and a non-statistical average grade calculation based on a weighted average grade within each polygon. The estimate is conceptual in nature, and there has been insufficient exploration drilling to define a mineral resource that may be categorized as an indicated, measured or inferred resource. It is uncertain if further exploration will result in the target being delineated as a mineral resource as defined in NI 43-101.

Dr. Steven Osterberg, PhD, PG, Timberline's vice-president of exploration, is a qualified person as defined by National Instrument 43-101 and has reviewed and approved the technical contents of this news release. He has verified the drill results and other data disclosed in this news release, including sampling, analytical and test data. Fieldwork has been conducted under his supervision. The Timberline sampling and analysis program included an industry-standard QA/QC program. After logging and cutting or dividing the sample intervals in half, the samples were picked up by Inspectorate America Corp. and taken to its ISO-9001-certified assay lab in Sparks, Nev., for analysis. The samples were analyzed for gold using a standard 30-gram fire assay with an AA finish. Samples returning a gold value in excess of three parts per million (ppm) were reanalyzed using a 30-gram fire assay with a gravimetric finish.

The Lookout Mountain mineral resources were modelled and estimated by MDA by evaluating the drill data statistically, utilizing geologic interpretations provided by Timberline to interpret gold mineral domains on cross-sections spaced at 50-to-100-foot intervals across the extents of the Lookout Mountain mineralization, rectifying the mineral-domain interpretations on level plans spaced at 10-foot intervals, analyzing the modelled mineralization geostatistically to aid in the establishment of estimation parametres, and interpolating grades into a three-dimensional block model. Mike Gustin, CPG of MDA, is a qualified person as defined by National Instrument 43-101 and is responsible for the resource estimate.

We seek Safe Harbor.