TIMBERLINE RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Audited) (USD $)	12 Months Ended
	Sep. 30, 2011		Sep. 30, 2010
Adjustments to reconcile net loss to net cash used by continuing operations:
Depreciation and amortization	$ 1,691,381		$ 1,504,057
Loss (gain) on disposal of equipment	(2,806)		215,873
Stock based compensation	901,246		1,468,074
Accretion of asset retirement obligation	(5,253)		9,378
Amortization of deferred financing cost with related party	27,273		6,818
Deferred income taxes	(852,122)		(408,031)
Loss on disposal of assets held for sale	10,455
Impairment of property and equipment			132,993
Impairment of mineral rights			35,000
Other non cash compensation			33,845
Inventory writedown			289,942
Changes in assets and liabilities:
Accounts receivable	(1,108,640)		514,593
Materials and supplies inventory	(282,871)		(668,524)
Prepaid expenses and other current assets, deposits and other assets	(111,719)		144,937
Accounts payable	(664,920)		1,282,716
Accrued expenses	(122,102)		(262,853)
Accrued payroll, benefits and taxes	116,395		(47,691)
Deferred revenue	33,970		45,000
Accrued interest on convertible note payable to related party			(436,249)
Net cash used by operating activities	(2,699,223)		(1,890,950)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(926,006)		(1,025,856)
Change in restricted cash	(58,384)		(283,007)
Proceeds from sale of equipment	35,816		26,805
Purchase of mineral rights	(186,000)		(67,000)
Proceeds from sale of assets held for sale	156,500
Contribution to investment in joint venture	(21,450)
Net cash acquired in acquisition		[1]	4,421,033	[1]
Note receivable from related party			(100,000)
Repayment of note receivable from related party			100,000
Net cash provided (used) by investing activities	(999,524)		3,071,975
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of stock, net of stock offering costs	4,568,987
Proceeds from exercise of options	49,050		442,941
Payments on long term debt	(485,660)		(223,441)
Payments on capital leases	(282,355)		(431,769)
Payments on customer advances	(150,000)		(600,000)
Proceeds from issuances of stock and warrants, net of stock offering costs			2,807,162
Proceeds from exercise of warrants			542,972
Deferred financing costs paid to related party			(50,000)
Net cash provided by financing activities	3,700,022		2,487,865
Net increase (decrease) in cash and cash equivalents	1,275		3,668,890
CASH AND CASH EQUIVALENTS INCLUDED IN CURRENT ASSETS HELD FOR SALE	(2,812,053)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	4,638,674		969,784
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 1,827,896		$ 4,638,674

[1] of Staccato Gold Resources Ltd.