New Drilling At Eureka Gold Project Significantly Expands Water Well Zone

COEUR D'ALENE, ID - Timberline Resources Corporation reported initial results from the 2021 drilling program at its 100%-controlled Eureka Project in Nevada. Recently resumed drilling after a ten-week hiatus due to lack of drill availability. These results are from the first five reverse circulation (RC) holes, comprising approximately 1,410 meters (4,626 feet). Timberline expects to complete at least an additional 5,200 meters (17,060 feet) of drilling before the end of December.

The first three of these RC holes (BHSE-193 - 195) were step-outs that tested the extent of the Water Well Zone (WWZ), which is immediately east of the Company's Lookout Mountain gold resource. Each of the three new drill holes in the WWZ intersected a significant thickness of gold mineralization at the base of the Dunderberg Shale, where it was expected to occur. These results have grown the WWZ appreciably, more than doubling the surface projection "footprint" of the gold mineralization.

Significant new intercepts in these holes include: 1) 10.67 meters (m) at 2.36 grams per tonne (g/t) gold from 301.8m depth in BHSE-194, including 6.01m at 2.98 g/t gold. 2) 16.76m at 1.74 g/t gold from 257.6m depth in BHSE-195, including 3.05m at 4.56 g/t gold. 3) 19.81m at 1.38 g/t gold from 248.4m depth in BHSE-193.

At present, one reverse circulation drill continues work at the WWZ and Oswego Targets. The new core drilling contractor has begun mobilizing onto the Eureka Project.

Patrick Highsmith, President and CEO, said, "These new results are significant because they confirm an expanded footprint for this new zone of mineralization that remains open in three directions. Our 3D modeling of the Lookout Resource and the nearby targets has demonstrated that we can predict the stratigraphy much better now. The WWZ was right where we expected to encounter it. Now we are focused on developing our understanding of the controls on the +3 g/t gold mineralization that is present in every hole in the Water Well Zone so far. This is just the beginning of the 2021 drill program, so we expect to add several more holes into this new and growing zone of mineralization."

Two additional holes tested other targets farther southwest. BHSE-197 was collared near the southwest corner of the historic Lookout Pit, and it intersected numerous intervals of low-grade gold mineralization and one significant interval of 7.62m at 0.82 g/t gold from 141.7m depth. BHSE-196 was an exploration hole testing a new target well away from known mineralization. Other than narrow intervals of anomalous gold, it did not intercept significant mineralization.

The WWZ is a downdip extension of the Lookout Mountain mineralization that was discovered by Timberline in 2015 (see Company news release dated February 14, 2015). Prior to this program, Timberline drilling has intercepted the zone six times, but two of the holes were at the margins or in a fault-attenuated interval. The new drill holes in the zone are consistent with previously reported mineralization in thickness and in grade, and they extend the zone approximately 220m to the north-northeast and 150m to the northwest.

The WWZ has been a focus of considerable work in 2020 and 2021 because the gold grades are higher than the Lookout Mountain Resource, including a high-grade intercept from drill hole BHSE-187 reported earlier. Seven holes passed through the entire thickness of the WWZ host horizon. In those holes, it averaged 18.9m thick with an average gold grade of 2.22 g/t. There were several intervals within those holes ranging from 3 to 7.7m thick in which the gold grade was higher than 4.5 g/t. The expanded footprint of the zone, if demonstrated to have continuity, has the potential to significantly grow the Lookout Mountain Resource.

The WWZ occupies a favorable horizon at the basal contact of the Dunderberg Shale with the Hamburg Dolomite. At this horizon, Timberline geologists have noted significant multi-staged collapse brecciation that likely accounts for the development of porosity and permeability. The mineralizing fluids exploited this horizon, evidenced by associated intense silicification, sulfidation, and carbonaceous replacement. The resulting jasperoid contains abundant fine sooty pyrite and oftentimes, the arsenic sulfide minerals orpiment and realgar. The shale and limestone above the gold mineralization often demonstrate calcite veining that passes into zones of argillic alteration. The dolomite below the contact is usually pervasively oxidized, weakly mineralized and decalcified and, in many areas, completely "sanded" by removal of all interstitial calcite. Jasperoid is present as irregular pods and masses of silicification along the contact with the Dunderberg Shale, replacing beds and forming locally cross-cutting veins and veinlets.

The heart of the Lookout Mountain resource occurs in the Dunderberg Shale near an easterly dipping fault termed the Highwall Fault. As the rock units also dip to the east, the mineralization in the WWZ is downdip of the main resource. From the cross-sectional view, the WWZ is open downdip to the east and it will likely tie into the main resource area updip to the west, but more drilling is needed. The Dunderberg host horizon is well understood and the 2021 drilling has successfully intercepted mineralization approximately where expected. However, the controls on the higher-grade gold in the WWZ are not yet understood. There are numerous faults crossing the area, forming a graben to the east that also hosts a large IP chargeability anomaly. More drilling is needed to infill the WWZ and test various targets that may host the higher-grade part of the system.

The drilled intercepts of the WWZ now span approximately 220 meters from south to north, more than double the long axis of the mineralization defined by the 2020 drilling. And the WWZ mineralization remains open to the north and south. The remainder of the 2021 drill program includes several holes testing the zone to the north, south, and west. At least two of the remaining holes in the area are planned to be drilled with core.

The gold mineralization in the WWZ is consistent with the geochemistry of Carlin-type gold deposits. It is generally highly enriched in arsenic, antimony, and thallium, but it is low in silver and only weakly enriched in zinc and lead. Mineralization is also very consistent once passing into the WWZ, rarely including gold grades of individual samples below 1.0 g/t.

Drilling Details

The current drill program will make use of both reverse circulation and diamond core drilling, but approximately 60% of the meterage will be RC drilling. Timberline has engaged a specialist drilling consultant to assist with contract negotiation, consumables, drilling muds, support equipment, and sampling procedures.