Mr. Patrick Highsmith reports

TIMBERLINE ANNOUNCES ACQUISITION BY MCEWEN MINING AT A SIGNIFICANT PREMIUM

Timberline Resources Corp. has entered into a definitive agreement and plan of merger with McEwen Mining Inc. McEwen has agreed to acquire all of the issued and outstanding shares of the company not already owned by McEwen by way of a merger between Timberline and a subsidiary of McEwen.

Under the merger agreement, Timberline shareholders will receive 0.01 of a share of McEwen's common stock for each Timberline share held (the exchange ratio), representing a value of 10.2 U.S. cents per Timberline share, based on the 20-day volume-weighted average price (VWAP) of McEwen shares on the New York Stock Exchange on April 15, 2024. This represents a 132-per-cent premium to the 20-day volume-weighted average price of Timberline shares on the OTCQB. McEwen currently owns 6.25 million Timberline shares, representing approximately 3.3 per cent of Timberline's common shares outstanding, and 6.25 million warrants. The exchange ratio represents an undiluted equity transaction value (on a 100-per-cent basis) of approximately $19.4-million (U.S.).

Patrick Highsmith, Timberline's president and chief executive officer, commented: "The merger with McEwen Mining, at an attractive premium to Timberline's current trading price, provides our shareholders with continued exposure to Timberline's assets as part of a more diverse growth-oriented platform. The combination should also unlock synergies between the Gold Bar mine and our Eureka project."

Benefits to Timberline shareholders:

• Premium of 162 per cent based on the last closing price and 132 per cent based on the 20-day VWAP;
• Ownership in an Americas-focused gold-silver-copper producer, with three operating mines forecast to produce 130,000 gold equivalent to 145,000 AuEq ounces in 2024 on an attributable basis, run by seasoned mining professional Robert McEwen, chairman and chief owner of McEwen:
  • McEwen also owns 47.7 per cent of McEwen Copper, which owns a 100-per-cent interest in the preliminary economic assessment (PEA)-stage Los Azules project, the world's eighth-largest undeveloped copper project, located in San Juan, Argentina.
• Participation in the potential accelerated development of the Eureka project by consolidation with McEwen's operating Gold Bar mine located in Eureka county, central Nevada;
• Increased trading liquidity and exposure to institutional investors through McEwen's NYSE and Toronto Stock Exchange listings;
• Eliminates the need for continued dilutive financings to finance Timberline's exploration and corporate expenses.

Transaction summary

The proposed transaction will be completed by the merger of a wholly owned subsidiary of McEwen with and into Timberline, with Timberline surviving as a wholly owned subsidiary of McEwen. The transaction will require the approval of a majority of the Timberline common shares outstanding and entitled to vote at a special meeting of Timberline shareholders. It is also subject to other customary closing conditions. The directors and officers of Timberline, together with two significant shareholders of Timberline, representing approximately 40 per cent of the common shares outstanding, have entered into a voting and support agreement pursuant to which they have agreed to vote their shares in favour of the transaction. It is anticipated that the transaction will close in the third quarter of 2024.

Timberline's board of directors has determined that the proposed transaction is in the best interest of the company and its shareholders, having taken into account advice from its financial adviser, and has unanimously approved the execution of the merger agreement. Timberline's board of directors recommends that its shareholders vote in favour of the transaction. Cormark Securities Inc. has provided an opinion to Timberline's board of directors that the consideration to be received from McEwen in connection with the transaction is fair, from a financial point of view, to the Timberline shareholders.

Timberline bridge facility

Concurrent with the execution of the merger agreement, McEwen and Timberline have entered into an interim financing arrangement whereby McEwen has agreed to loan Timberline up to approximately $500,000 (U.S.) to finance working capital and corporate costs of Timberline through the anticipated closing of the proposed transaction.

Advisers and counsel

Cormark Securities is acting as financial adviser to Timberline, and Davis Graham & Stubbs LLP is acting as Timberline's legal adviser.

About McEwen Mining Inc.

McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. In addition, it owns approximately 47.7 per cent of McEwen Copper, which owns the large, advanced-stage Los Azules copper project in Argentina. The company's goal is to improve the productivity and life of its assets with the objective of increasing its share price and providing a yield. Rob McEwen, executive chairman and chief owner, has a personal investment in the group of $220-million (U.S.) and takes an annual salary of $1 (U.S.).

About Timberline Resources Corp.

Timberline Resources is a Nevada-based exploration company with its flagship gold-silver property in the Eureka district. The Eureka property includes the historical Lookout Mountain and Windfall mines in a total property position of approximately 27 square miles (70 square kilometres).

Near the northern end of the Battle Mountain-Eureka trend, the company also jointly holds the Paiute project with Nevada Gold Mines. Timberline also controls the Seven Troughs project in northern Nevada, which is one of the state's highest-grade former gold producers.

In total, Timberline controls over 43 square miles (111 square kilometres) of mineral rights in Nevada. Detailed maps and technical materials for the company's projects may be viewed at the company's website.

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