Timberline Increases Gold Mineralization Estimate at Its Butte Highlands Gold Project

10/13/09

October 13, 2009 – Coeur d’Alene, Idaho – Timberline Resources Corporation (NYSE Amex: TLR) (“Timberline”) announced today that it has completed an updated calculation of the estimated gold mineralization at its Butte Highlands Gold Project joint venture.

Timberline has analyzed recent and historical drilling results in conjunction with an updated interpretation of the geologic model to arrive at these new mineral estimates. The mineralized envelopes generating these estimates are based on drill intercepts with greater than 0.10 ounces per ton of gold over a 10-foot interval.  The estimated mineralized material has been classified as shown below:

Paul Dircksen, Timberline’s Executive Chairman and Vice-President of Exploration, commented, “These new resource estimates increase our total anticipated mineralization at Butte Highlands to over 750,000 ounces of gold at an overall grade of 0.26 ounces per ton.  This indicates an increase of more than 40% over the historical resource calculations done by Orvana Minerals, including a 65% increase in the measured and indicated ounces.  This additional mineralization is expected to significantly increase our mine life, and there is still the possibility of increasing the mineralization and the mine life as we get into production.”

Mr. Dircksen added, “We are very confident in this analysis which was done by our Timberline team in conjunction with mine engineers at our joint venture partner, Small Mine Development.  In addition to the data used to generate these new estimates, we have just completed five additional exploration core holes on the property, and the final samples from this drilling are expected to be shipped to the assay lab this week.  We plan to provide a summary of our drill results from our 2009 drill program once we have received the assay results.”

More information and photos are available on the company’s web site at www.timberline-resources.com.

Timberline Resources Corporation is a diversified gold company comprised of three complementary business units:  a mine in production with upcoming gold production, exploration, and drilling services.  Its unique, vertically-integrated business model provides investors exposure to gold production, the “blue sky” potential of exploration, and the “picks and shovels” aspect of the mining industry.  Timberline has contract core drilling subsidiaries in the western United States and Mexico and an exploration division focused on district-scale gold projects with the potential for near-term, low-cost development.  The Company has formed a 50/50 joint venture with Highland Mining, LLC, an affiliate of Small Mine Development, LLC, at its Butte Highlands Gold Project and has begun development in 2009.  Timberline is listed on the NYSE Amex and trades under the symbol “TLR”.

Cautionary Note to U.S. Investors – All mineral resources have been estimated in accordance with the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in National Instrument 43-101, commonly referred to as NI 43-101 as required by Canadian Securities Administrators.  U.S. reporting requirements for disclosure of mineral properties are governed by the United States Securities and Exchange Commission (SEC) Industry Guide 7. Canadian and Guide 7 standards are substantially different.  The SEC permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. SEC guidelines strictly prohibit terms that are not defined in Industry Guide 7, such as “resources,” “geologic resources,” “proven,” “probable,” “measured,” “indicated,” and “inferred,” from being included in Issuer’s reports and registration statements filed with the SEC. U.S. investors should be aware that the Company has no “reserves” as defined by Guide 7 and are cautioned not to assume that any part or all of mineral resources will ever be confirmed or converted into Guide 7 compliant “reserves.” Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute Guide 7 compliant “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures.

Statements contained herein that are not based upon current or historical fact are forward-looking in nature. Such forward-looking statements reflect the Company’s expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties, including but not limited to the Company’s 50/50 joint venture with Highland Mining LLC, the development and production of the Company’s Butte Highlands project, and the Company’s expected operations in 2009. When used herein, the words “anticipate,” “believe,” “estimate,” “upcoming,” “plan,” “intend” and “expect” and similar expressions, as they relate to Timberline Resources Corporation, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause the Company’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, such factors, including risk factors, discussed in the Company’s Annual Report on Form 10-KSB for the year ended September 30, 2008.  Except as required by the Federal Securities law, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements.

Contact Information:
Randal Hardy, CEO
Phone: 208.664.4859