Timberline Drills Additional High-Grade Gold Intercepts at Butte Highlands

COEUR D'ALENE, IDAHO--(Marketwire - July 11, 2011) - Timberline Resources Corporation (TSX VENTURE:TBR)(NYSE Amex:TLR) ("Timberline" or the "Company") today announced additional results from underground drilling at the Butte Highlands Gold Project in southwestern Montana.

Results reported today are from holes BHUG11-034 through BHUG11-039 and BHUG11-068 in Timberline's recently-completed 86-hole, 49,500-foot (15,000-metre) underground diamond drill program which was designed for detailed delineation of the mineralization and for production planning purposes. Timberline has a 50-percent carried-to-production ownership interest in the project, which is currently in the development/permitting stage and is scheduled to commence gold production in early 2012.

Twelve intervals of gold grades greater than 0.10 ounce per ton (opt) (3.4 grams per tonne (g/t)) gold were identified within the seven holes reported today. Highlights include:

• Hole # BHUG11-035: 19.9 feet (6.1 metres) grading 0.37 opt (12.7 g/t) gold;
• Hole # BHUG11-038: 1.3 feet (0.4 metres) grading 0.87 opt (29.8 g/t) gold;
• Hole # BHUG11-039: 14.7 feet (4.5 metres) grading 0.31 opt (10.6 g/t) gold, including
  • 10.5 feet (3.2 metres) grading 0.41 opt (14.0 g/t) gold, and
  • 3.5 feet (1.1 metres) grading 0.75 opt (25.7 g/t) gold.

Paul Dircksen, Timberline's President and CEO, said, "We are pleased that we continue to see good drill intercepts that correlate well with projections from previous drilling. In fact, several holes indicate good mineralization around historic stopes where high-grade ore was mined at the Highland Mine in the 1930's and early 1940's. The results of this drill program will drive the planning for the 10,000 ton bulk sample that we intend to mine later this year, as authorized under the existing Butte Highlands Joint Venture exploration permit."

Mr. Dircksen added, "We also continue to make steady progress toward permitting the Butte Highlands underground mining operation. Our JV partner has submitted the final hydrology study report requested by the Montana Department of Environmental Quality, and we anticipate receiving the hard rock operating permit before the end of 2011."

The holes reported today were drilled in the Only Chance Block, the Highlands Block, and the Gold Excel Block from Drill Stations DS-2, DS-4, and a drift. Additional drill results for holes within these blocks are pending. The following table summarizes all drill intervals greater than 0.10 opt (3.4 g/t) gold.

Current drill results include:

Drill Hole		From (feet)	Length (feet)	Gold (opt)*	From (metres)	Length (metres)	Gold (g/t)*
BHUG11-034		238.1	2.1	0.10	72.6	0.6	3.5
BHUG11-035		200.8	48.7	0.20	61.2	14.8	6.8
	Including	206.6	19.9	0.37	63.0	6.1	12.7
BHUG11-036		260.3	3.5	0.33	79.3	1.1	11.3
BHUG11-036		275.7	10.4	0.25	84.0	3.2	8.6
	Including	282.1	4.0	0.31	86.0	1.2	10.8
BHUG11-036		465.6	1.0	0.13	141.9	0.3	4.6
BHUG11-037		336.2	1.8	0.34	102.5	0.5	11.8
BHUG11-038		224.6	14.4	0.19	68.5	4.4	6.5
	Including	224.6	9.4	0.25	68.5	2.9	8.6
	Including	225.5	1.3	0.87	68.7	0.4	29.8
BHUG11-038		492.3	1.2	0.15	150.1	0.4	5.1
BHUG11-039		225.3	14.7	0.31	68.7	4.5	10.6
	Including	225.3	10.5	0.41	68.7	3.2	14.0
	Including	225.3	3.5	0.75	68.7	1.1	25.7
BHUG11-039		603.0	5.9	0.31	183.8	1.8	10.6
	Including	605.3	3.6	0.48	184.5	1.1	16.4
BHUG11-068		484.0	1.2	0.34	147.5	0.4	11.6
BHUG11-068		744.4	3.6	0.26	226.9	1.1	8.9

* Troy ounces per ton (opt) and grams per tonne (g/t)

Note: All lengths are estimated to be true widths.

Sample intervals from fifteen additional holes from the drilling at Butte Highlands are in the lab pending assays. Results are expected shortly and will be reported by the Company as they are received. For previously-reported results from the underground drill program at Butte Highlands, please see Timberline's press releases on their web site.

Timberline holds a 50-percent interest in the Butte Highlands Joint Venture which is targeted to commence gold production in early 2012. Timberline's JV partner, Highland Mining, LLC is funding all project development costs, with Timberline's 50-percent share of costs to be paid out of proceeds from future mine production. A feasibility study has not been completed at Butte Highlands, and there is no certainty the proposed operation will be economically viable. Photos and videos of development progress at Butte Highlands, along with other additional project information, can be seen at Timberline's web site.

Butte Highlands is located within a favorable geologic domain that has hosted several multi-million ounce gold deposits including Butte, Golden Sunlight, Montana Tunnels, and Virginia City. The property was extensively drilled by Battle Mountain Gold, Placer Dome, ASARCO, and Orvana in the 1980s and 1990s.

Paul Dircksen is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the technical contents of this release. He has verified the drill results and other data disclosed in this news release, including sampling, analytical and test data. Field work has been conducted under his supervision. The Timberline sampling and analysis program included an industry standard QA/QC program. After photographing, core logging and cutting the sample intervals in half, the samples were shipped to ALS Chemex Laboratories in Elko, Nevada for preparation. The prepared pulps were then forwarded by ALS Chemex to their lab in Sparks, Nevada or their lab in Vancouver, BC Canada for analysis. The samples were analyzed for gold using a standard 30g fire assay with an AA finish. Samples returning a gold value in excess of 10 ppm were re-analyzed using a 30g fire assay with a gravimetric finish.

About Timberline Resources

Timberline Resources Corporation is exploring and developing advanced-stage gold properties in the western United States. The Company is primarily focused on the goldfields of Nevada, where it is advancing its flagship Lookout Mountain Project toward a production decision while exploring a pipeline of quality earlier-stage projects at its South Eureka Property and elsewhere. Timberline also features a 50-percent carried-to-production interest at its Butte Highlands Joint Venture where gold production is slated to commence early in 2012. Timberline management has a proven track record of discovering economic mineral deposits and developing them into profitable mines. The Company also holds Timberline Drilling, a wholly-owned subsidiary that provides diamond drilling services and cash flow from underground and surface contract drilling operations.

Timberline is listed on the NYSE Amex where it trades under the symbol "TLR" and on the TSX Venture Exchange where it trades under the symbol "TBR".

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. These statements include but are not limited to statements regarding the timing or results of the Company's drill program at Butte Highlands, the timing of assay results from such drilling program being released, the Company's 50/50 joint venture with Highland Mining LLC, the development and production of the Company's Butte Highlands project and South Eureka project, the targeted production date for the Butte Highlands project, targeted dates for the South Eureka technical report and PEA, results of the Company's drilling subsidiaries, possible growth of the Company and the Company's expected operations. 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-K for the year ended September 30, 2010. Except as required by Federal Securities law, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements.