Mr. Steven Osterberg reports

TIMBERLINE INITIATES TALAPOOSA METALLURGICAL PROGRAM

Timberline Resources Corp. has initiated a metallurgical and geotechnical test program designed to assess the potential to improve heap permeability and enhance gold and silver leach efficiency for the processing of the mineralized material at the Talapoosa gold and silver deposit in Lyon county, Nevada. The program has been designed to increase the already-substantial metallurgical test results incorporated into the company's preliminary economic assessment issued in May, 2015.

Work will focus on four composite samples recently collected from the two main types of mineralized material that represent the bulk of the Talapoosa deposit. Each sample will be crushed in stages using high-pressure grinding roll (HPGR) technology. Finely crushed material will be separated from the coarse material. Removal and separate processing of the fine material are expected to increase the permeability of the coarse material that is to be placed on the heap-leach pad.

Coarse material with the fines removed will be tested in the laboratory for permeability under loads representing equivalent heap-leach pad heights up to 200 feet. The coarse particle fraction will also be subjected to agglomeration tests and column leach testing. Comparative agglomeration tests will also be performed on the material without the fines removed to evaluate differences in agglomerate strengths and binder requirements.

Bottle-roll and mechanically agitated leach tests will be performed on the fines fraction. Tests will include leaching at finer grind sizes and with the addition of a chemical agent that has often been demonstrated to improve leach kinetics, especially in mineralized systems with combined gold and silver such as Talapoosa.

Kappes Cassiday and Associates, Newfields, McClelland Laboratories, and MPDI will provide expert laboratory services and program oversight for the project. Additional metallurgical testing is anticipated to be performed in late 2016 and early 2017. Initial program results from the crushing and permeability testing are expected in mid-August, 2016.

We seek Safe Harbor.