Timberline Has Positive Assessment For Talapousa Project

COEUR D'ALENE, ID - Timberline Resources Corporation reported the results of a positive Preliminary Economic Assessment (PEA) carried out on the Company's recently optioned Talapoosa project located in western Nevada. Timberline holds a 30-month option to purchase 100% of Talapoosa.

The PEA confirms Talapoosa's robust economic potential as an open pit, heap leach gold operation using contract mining at a processing rate of 3.8 million tons per annum (Mtpa). Specifically, using the base case price assumption of $1,150/oz gold and $16/oz silver, Talapoosa has an estimated $209 million after-tax net cash flow, $136 million after-tax net present value (NPV) at a 5% discount rate, an attractive 39% after-tax internal rate of return (IRR), and a low initial capital cost of $51 million.

The PEA was prepared by WSP Canada Inc. with technical contributions from Mineral Property Development, Inc. (MPDI), McClelland Laboratories, Inc., Enviroscientists Inc. and DOWL, using the current mineral resource estimate for Talapoosa, which was also prepared by WSP with an effective date of March 24, 2015.

Kiran Patankar, Timberline's President and Chief Executive Officer, commented, "We are extremely pleased to have achieved this important milestone just a short month after having acquired the Talapoosa option. Our technical team capitalized on a well-defined mineral resource that had undergone extensive historic engineering and permitting work to deliver a high quality PEA ahead of schedule. This illustrates the clear advantages of working with a technical group that is actively involved with comparable Nevada gold development projects and had prior experience with Talapoosa.

"The PEA presents a development scenario that demonstrates strong economics using conservative metals price assumptions and, importantly, fits within the scope of the previously permitted operation. As a partially permitted project in a low-risk, pro-mining jurisdiction with estimated average annual gold production of 55,000 oz, all-in sustaining cash costs of $599/oz of gold (net of silver), initial capital costs of $51 million, and potentially significant opportunities for future optimization and resource expansion, we believe Talapoosa is in the top quartile of North American gold development projects. Based on these encouraging results, we plan to further optimize Talapoosa through the completion of a Pre-Feasibility Study, which we expect to complete in Q1 2016."

The PEA is preliminary in nature and the economic analysis it presents is based, in part, on Inferred Resources that are considered too speculative geologically to have mining and economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Estimates of Inferred Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. There is no certainty that the economic forecasts contained within the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

The proposed project is a 10,460 ton/day (3.8 Mtpa) heap leach facility fed by a single open pit mine, resulting in a projected 11-year mine life with total metal production of 593,000 oz of gold and 7,365,000 oz of silver. Initial capital costs are estimated at $51 million including a $2 million reclamation bond, $8 million in owner's costs, and a $6 million contingency cost. This includes mine development, heap leach pad and Merrill Crowe processing plant construction, waste rock management, and all site infrastructure required for the start of mining operations. Projected life-of-mine (LOM) average cash operating costs are $543/oz of gold (net of silver byproduct at the base case $16/oz silver price). All-in sustaining costs are $599/oz of gold (net of silver). Total all-in costs, including all capital expenditures, are $682/oz of gold (net of silver), which is among the lowest per-ounce costs when compared with other gold development projects.