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Timberline Resources Corp (2)
Symbol TBR
Shares Issued 24,006,952
Close 2017-04-03 C$ 0.58
Market Cap C$ 13,924,032
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Timberline makes $1-million (U.S.) Talapoosa payment

2017-04-03 10:06 ET - News Release

Mr. Steven Osterberg reports

TIMBERLINE COMPLETES TALAPOOSA OPTION PAYMENT

On March 31, 2017, Timberline Resources Corp. paid the $1-million (U.S.) cash payment to American Gold Capital U.S. Inc., a subsidiary of Gunpoint Exploration Ltd., in satisfaction of the cash option payment for its Talapoosa gold project in Lyon county, Nevada. The company will also issue one million shares of the company's common stock to American Gold Capital pending approval by the TSX-V. The cash and stock payments are made pursuant to the terms of the amended option agreement, which permits the company to acquire 100 per cent of the Talapoosa gold project.

The original option agreement was amended in October, 2016, to extend the option exercise period until March 31, 2019, thereby allowing exploration-related and development-related expenditures, which are expected to further develop the Talapoosa gold project by increasing the gold resource and advancing the project to the feasibility stage.

Timberline's president and chief executive officer, Steven Osterberg, commented: "We consider the completion of the initial option payment obligation to be an important and significant milestone in our efforts to further advance the Talapoosa gold project while testing the open extent of the resource and related initiatives to move to feasibility. With the strong investor demand for our previously announced non-brokered private placement (recently expanded to $2-million (U.S.)), we are excited to advance the project forward during the 2017 field season. We appreciate the continued support of Gunpoint Exploration and American Gold Capital as significant and supportive shareholders of Timberline as we continue to advance Talapoosa."

The Talapoosa resource consists of 1,012,802 ounces of gold and 13,649,358 ounces of silver in the measured and indicated resources categories, with an additional 233,532 ounces of gold and 2,172,766 ounces of silver in the inferred resource category as detailed in the attached table.

                         Tons         Au         Ag        Tonnes        Au          Ag          Au            Ag  
                                 (oz/ton)   (oz/ton)                   (g/t)       (g/t)        (oz)          (oz)

Total measured     17,170,870      0.036      0.494    15,577,070      1.23       16.95     618,468     8,489,086
Total indicated    14,093,600      0.028      0.366    12,785,400      0.96       12.55     394,334     5,160,273
Total M&I          31,264,470      0.032      0.437    28,362,470      1.11       14.97   1,012,802    13,649,358
Total inferred     11,198,000      0.021      0.194    10,158,000      0.72        6.65     233,532     2,172,766

Note: Resources are estimated using a gold cut-off of 0.013 ounce per ton 
(0.45 gram per tonne). See "Technical Report and Resource Estimate on the 
Talapoosa Project, Nevada" prepared by WSP Canada Inc., effective March 24, 
2015, and filed on SEDAR April 1, 2015.

A positive preliminary economic assessment was completed on the Talapoosa project and released on April 27, 2015, by WSP Canada, which envisioned the project as an open-pit, gold heap-leach operation (see "Preliminary Economic Assessment on the Talapoosa Project, Nevada," effective April 27, 2015). The results of the PEA, using the base-case price assumption of $1,150 (U.S.) per ounce gold and $16 (U.S.) per ounce silver, confirmed Talapoosa's economic potential, including:

  • Estimated average annual production of 55,000 ounces of gold and 679,000 ounces of silver for 11 years;
  • Life-of-mine all-in sustaining costs of $599 per ounce gold (net of silver byproduct at a silver price of $16 per ounce);
  • Estimated $209-million (U.S.) after-tax net cash flow;
  • After-tax net present value (discounted at 5 per cent) of $136-million and 39-per-cent internal rate of return at a gold price of $1,150 per ounce and a silver price of $16 per ounce;
  • Low initial capital requirement of $51-million.

Timberline's current focus will be on finalizing the continuing metallurgical studies and preparations for initial drill testing of the resource expansion target areas at Talapoosa and exploration on the adjacent Appaloosa zone (see press releases dated Dec. 7, 2016, and Jan. 31, 2017).

About Timberline Resources Corp.

Timberline Resources is focused on advancing district-scale gold exploration and development projects in Nevada, including its Talapoosa project in Lyon county, where the company has completed and disclosed a positive preliminary economic assessment. Timberline also controls the 23-square-mile Eureka project lying on the Battle Mountain-Eureka gold trend. Timberline also owns the Seven Troughs property in northern Nevada, known to be one of the state's highest-grade former producers.

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