Note 5 - Property Option Agreement	9 Months Ended
Jun. 30, 2018
Notes
Note 5 - Property Option Agreement:	*NOTE 5 – PROPERTY AND MINERAL RIGHTS:* During the three months ended June 30, 2018, our management and Board of Directors determined that certain payments received by the Company beginning in August 2017, which had been held and not recorded or deposited pending an expected resolution of circumstances relating to two historic leases at our Eureka property, should be deposited. The payments had been received from a third party with whom we are in discussions to resolve matters that had been under negotiation since we acquired the Eureka property. The total amount of these payments received through June, 2018 was $87,424. Monthly payments in the amount of $8,326 are expected to continue to be received, recorded and deposited until the situation concerning the leases is resolved. These receipts are recorded as a reduction to property, mineral rights, and equipment. ICBM Sale On May 23, 2018, we sold a participating interest in a joint venture on the ICBM Project (“ICBM”), a mineral interest located in Humboldt and Lander counties, Nevada. The purchaser was Americas Gold Exploration, Inc. (“AGEI”) and the consideration we received for the sale was $100,000 cash, which was recorded as a decrease to mineral interests. The total consideration also included a 0.5% net smelter return royalty on the gross production of all minerals extracted from the ICBM Project properties. In connection with a concurrent definitive agreement with AGEI to acquire an additional joint venture interest, we decided to re-acquire this joint venture interest, now renamed as the Paiute property joint venture, as a component of the AGEI transaction. AGEI Definitive Agreement On May 23, 2018, we executed a definitive agreement with Americas Gold Exploration, Inc. (“AGEI”) (the “Definitive Agreement”) for the purchase of two joint venture ownership interests (the “JV Interests”) in Nevada (the “Transaction”). As of June 30, 2018, we had not yet closed on the Transaction; however we expect to close on the Transaction upon completion of a financing that provides sufficient capital to meet the obligations of the two joint venture agreements for at least six months, and the receipt of final approval for the Transaction from the TSX Venture Exchange. The JV Interests include the Elder Creek property joint venture with McEwen Mining Inc., which includes an option to acquire up to 65% of the project interest, and an approximate 73.7% interest in the Paiute property joint venture with LAC Minerals (USA) LLC, a wholly owned subsidiary of Barrick Gold Corporation. Upon closing of the Transaction, we expect to be the operator at both of these joint venture projects. The consideration for the Transaction is expected to consist of ten million shares of the Company’s common stock and five million non-transferrable share purchase warrants (the “Consideration Warrants”), with each warrant exercisable to acquire one share of the Company’s common stock for US$0.24 for a period of three years. In addition, we will deliver to AGEI, subject to any required regulatory approval, an additional 5,000,000 common stock purchase warrants with the same terms and in the same form as the Consideration Warrants if and when the earlier of the following occurs: (i) Timberline enters into an arrangement with a funding partner for the advancement of the Elder Creek Joint Venture, or (ii) Timberline has met the 2018 work commitment of $500,000. On June 18, 2018, we entered into an amendment to the Definitive Agreement wherein we agreed, upon closing of the Transaction, to reimburse AGEI for the initial payment of $100,000 due under the Elder Creek JV agreement. Upon executing the Definitive Agreement, it was our intention to pay this initial payment, but because the TSX Venture Exchange had not provided final approval for the Transaction when the initial payment was due, AGEI paid the initial payment, and we will reimburse AGEI for the $100,000 payment upon TSX-V approval and closing of the Transaction. On June 29, 2018, we paid the property holding costs for the Elder Creek property which were due to be paid to McEwen Mining on or before June 30, 2018. Given that the Transaction had not closed as of June 30, 2018, the property holding cost payment of $95,759 was recorded as other current assets at June 30, 2018. Talapoosa Option Agreement (Terminated) On March 12, 2015 (the “Effective Date”), we entered into a property option agreement (“Agreement”) with Gunpoint Exploration Ltd. (“Gunpoint”), which closed on March 31, 2015 and was amended on October 19, 2016 (“Amended Agreement”). Pursuant to the Agreement, Gunpoint granted us an exclusive and irrevocable option (“Option”) to purchase a 100% interest in Gunpoint’s Talapoosa project (the “Project”) in western Nevada. Pursuant to the Amended Agreement, during the Amended Option Period, we were required to pay $2 million and issue one million common shares of the Company by March 31, 2018. We did not make the payment of $2 million nor issue the one million common shares of the Company by March 31, 2018, and, therefore, the Amended Agreement was terminated per its terms on March 31, 2018. As a result, on March 31, 2018, we wrote off our entire investment of $3,231,700.

Note 5 - Property Option Agreement

9 Months Ended

Jun. 30, 2018

NOTE 5 – PROPERTY AND MINERAL RIGHTS:

During the three months ended June 30, 2018, our management and Board of Directors determined that certain payments received by the Company beginning in August 2017, which had been held and not recorded or deposited pending an expected resolution of circumstances relating to two historic leases at our Eureka property, should be deposited. The payments had been received from a third party with whom we are in discussions to resolve matters that had been under negotiation since we acquired the Eureka property. The total amount of these payments received through June, 2018 was $87,424. Monthly payments in the amount of $8,326 are expected to continue to be received, recorded and deposited until the situation concerning the leases is resolved. These receipts are recorded as a reduction to property, mineral rights, and equipment.

ICBM Sale

On May 23, 2018, we sold a participating interest in a joint venture on the ICBM Project (“ICBM”), a mineral interest located in Humboldt and Lander counties, Nevada. The purchaser was Americas Gold Exploration, Inc. (“AGEI”) and the consideration we received for the sale was $100,000 cash, which was recorded as a decrease to mineral interests. The total consideration also included a 0.5% net smelter return royalty on the gross production of all minerals extracted from the ICBM Project properties. In connection with a concurrent definitive agreement with AGEI to acquire an additional joint venture interest, we decided to re-acquire this joint venture interest, now renamed as the Paiute property joint venture, as a component of the AGEI transaction.

AGEI Definitive Agreement

On May 23, 2018, we executed a definitive agreement with Americas Gold Exploration, Inc. (“AGEI”) (the “Definitive Agreement”) for the purchase of two joint venture ownership interests (the “JV Interests”) in Nevada (the “Transaction”). As of June 30, 2018, we had not yet closed on the Transaction; however we expect to close on the Transaction upon completion of a financing that provides sufficient capital to meet the obligations of the two joint venture agreements for at least six months, and the receipt of final approval for the Transaction from the TSX Venture Exchange. The JV Interests include the Elder Creek property joint venture with McEwen Mining Inc., which includes an option to acquire up to 65% of the project interest, and an approximate 73.7% interest in the Paiute property joint venture with LAC Minerals (USA) LLC, a wholly owned subsidiary of Barrick Gold Corporation. Upon closing of the Transaction, we expect to be the operator at both of these joint venture projects.

The consideration for the Transaction is expected to consist of ten million shares of the Company’s common stock and five million non-transferrable share purchase warrants (the “Consideration Warrants”), with each warrant exercisable to acquire one share of the Company’s common stock for US$0.24 for a period of three years. In addition, we will deliver to AGEI, subject to any required regulatory approval, an additional 5,000,000 common stock purchase warrants with the same terms and in the same form as the Consideration Warrants if and when the earlier of the following occurs: (i) Timberline enters into an arrangement with a funding partner for the advancement of the Elder Creek Joint Venture, or (ii) Timberline has met the 2018 work commitment of $500,000.

On June 18, 2018, we entered into an amendment to the Definitive Agreement wherein we agreed, upon closing of the Transaction, to reimburse AGEI for the initial payment of $100,000 due under the Elder Creek JV agreement. Upon executing the Definitive Agreement, it was our intention to pay this initial payment, but because the TSX Venture Exchange had not provided final approval for the Transaction when the initial payment was due, AGEI paid the initial payment, and we will reimburse AGEI for the $100,000 payment upon TSX-V approval and closing of the Transaction.

On June 29, 2018, we paid the property holding costs for the Elder Creek property which were due to be paid to McEwen Mining on or before June 30, 2018. Given that the Transaction had not closed as of June 30, 2018, the property holding cost payment of $95,759 was recorded as other current assets at June 30, 2018.

Talapoosa Option Agreement (Terminated)

On March 12, 2015 (the “Effective Date”), we entered into a property option agreement (“Agreement”) with Gunpoint Exploration Ltd. (“Gunpoint”), which closed on March 31, 2015 and was amended on October 19, 2016 (“Amended Agreement”). Pursuant to the Agreement, Gunpoint granted us an exclusive and irrevocable option (“Option”) to purchase a 100% interest in Gunpoint’s Talapoosa project (the “Project”) in western Nevada.

Pursuant to the Amended Agreement, during the Amended Option Period, we were required to pay $2 million and issue one million common shares of the Company by March 31, 2018. We did not make the payment of $2 million nor issue the one million common shares of the Company by March 31, 2018, and, therefore, the Amended Agreement was terminated per its terms on March 31, 2018. As a result, on March 31, 2018, we wrote off our entire investment of $3,231,700.