Update On The Lookout Mountain JV

COEUR D'ALENE, ID - Timberline Resources Corporation has issued a notice of default to PM & Gold Mines, Inc. (PM&G) pursuant to terms of the Lookout Mountain Joint Venture Agreement. The Agreement allows PM&G to earn an initial 51% interest in the project by funding $6 million in work expenditures over a 2-year period of which $3 million was to have been expended during the first year. PM&G has 30 days to cure the default by making an in-lieu cash payment to Timberline of approximately $2.24 million.

Steven Osterberg, President and CEO, said, "Lookout is a large Carlin-type gold system associated with a surface footprint of at 4-5 km along trend and =1 km width. The current NI 43-101 compliant gold resource of 508,000 oz Measured & Indicated and 141,000 oz Inferred remains open in all directions. We plan to expand the resource mineralization and to delineate and extend zones high-grade gold mineralization within it. With the improved capital markets, we look forward to advancing the project at the conclusion of the cure period."