Timberline Resources Corporation (TLR) www.timberline-resources.com – the strategically diversified gold production firm focused on growth through the acquisition of advanced-stage exploration properties with near-term production potential, disclosed details of its drilling operations at the recently-acquired South Eureka property today, Tuesday, August 03.

Continuous revenue generation which benefits both the core strategy and shareholders is paramount at TLR, and the Company was pleased to announce the mobilization of a surface drill and commencement of the diamond-drilling segment at the property, which is situated in Nevada’s Battle Mountain-Eureka gold trend.

With plans to start a complementary reverse circulation (RC) drill program in the coming weeks, TLR’s activity is really heating up at this particular property, which includes the Lookout Mountain project.

Executive Chairman and VP of Exploration at TLR, Paul Dircksen, cited the Company’s exhaustive analysis during due diligence activities related to the Staccato acquisition as the primary cause for pursuing exploration to confirm the “sizeable economic deposit” which was identified therein.

Contemporary data from metallurgical testing and drilling in, conjunction with current gold-related indices, validate the model for developing a very profitable low-grade oxide, heap-leachable gold mine. Ore samples will be sent out as well for independent analysis of metallurgical characteristics.

Lookout Mountain was the primary asset in the June 2010 acquisition of Staccato Gold Resources, Ltd., and is a rather typical sediment-hosted project with proven historical production capability, and for which extant data indicates the existence of 800k+ oz Au.

A rigorous exploratory analysis of the property, focused on Lookout Mountain, will be conducted in an effort to confirm the data in this previously generated report; determine cost-benefit analysis/economic feasibility of the project; and to extend geologic mapping data for the property in order to resolve ore controls (for targeting and geologic modeling purposes).

Lookout Mountain is strategically located in the heart of production infrastructure and has a long track record for production starting in 1981 and today encompassing 533 holes (267k cumulative feet) on some 15k+ acres (4 mile band running NE-SE) of gold mineralization.

Dircksen noted that all of the outlined mineralization zones are open and would require some prep-work (in-fell and step-out drilling) for TLR to conduct a preliminary economic scoping study. Dircksen also indicated that exploration drilling on other identified targets in the property would be pursued in order to increase production.