COEUR D'ALENE, IDAHO -- (MARKET WIRE) -- Dec 02, 2010 -- Timberline Resources Corporation (TSX VENTURE: TBR) (NYSE Amex: TLR) ("Timberline" or the "Company") today announced consolidated financial results for its fourth fiscal quarter and its fiscal year ended September 30, 2010. A summary of selected financial results is presented in the following table:

($US 000's, except earnings          3 Months Ending            Year Ending 
 per share and gross margin %)          September 30           September 30 
                                     2010       2009        2010       2009 
                             -----------------------  --------------------- 
Revenue from continuing                                                     
 operations                  $      6,575  $   4,419  $   20,733  $  13,242 
Loss from continuing                                                        
 operations                        (2,258)    (1,521)     (4,133)    (7,130)
Loss from discontinued                                                  
 operations                          (837)       (81)     (1,618)      (179)
Consolidated net loss              (3,095)    (1,602)     (5,751)    (7,309)
Consolidated net loss per                                                   
 share, basic and diluted           (0.06)     (0.04)      (0.13)     (0.22)
Net income (loss) from                                                      
 Timberline Drilling Inc.             308        405       1,710     (1,132)
Mineral exploration expenses        1,686        119       2,221        493 
Working capital                     2,827        169       2,827        169 
Timberline Drilling Inc. gross                                              
 margin %                              18%        22%         21%         8%

Timberline's contract drilling subsidiary, Timberline Drilling, Incorporated ("Timberline Drilling") reported revenues of $6.58 million and net income of $0.31 million for the fourth quarter. For the fiscal year ended September 30, 2010, Timberline Drilling reported revenues of $20.73 million and net income of $1.71 million. Timberline Drilling's annual performance improved dramatically over 2009, with a 57% increase in revenue and a $2.84 million improvement in net income. These results are primarily due to increased rig utilization and management's continued focus on enhancing customer service while effectively streamlining operations and managing costs.

Timberline's corporate office and exploration division reported a net loss of $2.57 million for the quarter ended September 30, 2010 and $5.84 million for the year ended September 30, 2010. Included in these amounts are exploration expenditures of $1.69 million and $2.22 million, respectively. The Company's exploration expenditures increased dramatically in 2010 primarily due to its extensive, ongoing resource definition drill program at its South Eureka Property in Nevada and further surface exploration at its Butte Highlands Joint Venture property in Montana.

As previously announced, in September the Company discontinued their drilling services operation in Mexico which was operated by their wholly-owned Mexican subsidiary, World Wide Exploration, S.A. de C.V. ("WWE"). The Company's consolidated results include a loss from discontinued operations of $0.84 million and $1.62 million for the quarter and year ended September 30, 2010.

Timberline Executive Chairman Paul Dircksen commented, "We are pleased to have achieved significant milestones this year. Our acquisition of the South Eureka Property in the Nevada's Battle Mountain - Eureka gold trend, which includes the Lookout Mountain Project, added an advanced-stage exploration project and other earlier stage exploration opportunities to our portfolio. We have commenced a significant and focused exploration campaign at South Eureka, and we expect to announce an updated gold resource and to begin a preliminary economic assessment in the first quarter of 2011. In addition, our Butte Highlands Joint Venture in Montana completed all surface facilities and advanced the underground ramp to the top of the expected mineralization, and we continue to progress with the remaining underground mine development and permitting activities. Underground definition drilling has just begun, and we remain on track for gold production to begin in Q3/Q4 2011."

Mr. Dircksen added, "Timberline Drilling continues to demonstrate solid performance with nearly $2 million in net income in FY2010 and a solid gross margin of 21%. Having extended our drilling contract with Newmont into 2014 and adding other clients with long-term mining projects, our drilling subsidiary is generating more and more value for the company. Our future looks bright as we advance our projects while continuing to evaluate other opportunities to bring additional value to our shareholders."

About Timberline Resources

Timberline is a U.S.-based exploration/development company with a focus on advanced-stage precious metals properties. The Company's management team has a solid track record of achievement in building successful companies and discovering, exploring, and developing economic mineral deposits. Currently, Timberline is executing an aggressive exploration program at its South Eureka Property, a large drill-tested and highly prospective property in Nevada's Battle Mountain - Eureka gold trend. In addition, Timberline has two other business units. The Company has a 50% carried-to-production interest at the Butte Highlands Joint Venture which is currently in development and targeted to begin gold production in 2011, where the Company has also undertaken additional surface drilling to test the extent of the mineralized zone. Timberline also has a wholly-owned subsidiary, Timberline Drilling, which provides cash flow to the Company from its underground and surface drilling operations at operating mines and advanced development and exploration projects.