Exhibit 10.22

STOCK SETTLEMENT AND RELEASE AGREEMENT

THIS STOCK SETTLEMENT AND RELEASE AGREEMENT (this “Agreement”) is made as of
this 14th day of July, 2009, by and between Timberline Resources Corporation
(“Timberline”), a Delaware corporation, and Jefferies & Company, Inc.
(“Jefferies”).

RECITALS

WHEREAS, Jefferies provided Timberline financial advisory services in connection
with a possible transaction or series of transactions involving Timberline and a
target company, and was engaged by Timberline as a placement agent, arranger, or
initial purchaser for the potential financing for such a transaction or
transactions (the “Services”), pursuant to the terms of two agreements:  an
engagement agreement dated November 1, 2007 (the “Advisory Engagement
Agreement”); and an engagement agreement dated April 4, 2008 (the “Placement
Agent Engagement Agreement”), (together the “Engagement Agreements”) each by and
between Timberline and Jefferies; and

WHEREAS, pursuant to the Engagement Agreements, Timberline was to pay Jefferies
a fee of $500,000 for a Fairness Opinion, a cash fee and warrants in the event
that securities were placed, and expenses including legal fees incurred by
Jefferies pursuant to the provision of the Services (collectively, the “Fees”);
and

WHEREAS, Jefferies has issued an invoice to Timberline, Invoice number 7291
dated Oct. 29, 2008, reference number AEE87, in the total amount of $923,956.74
for the Fees (the “Services Invoice”), shown in Exhibit B; and

WHEREAS, neither a transaction nor a financing envisioned in the Engagement
Agreements was consummated; and

WHEREAS, Timberline and Jefferies now desire that the Fees and the Services
Invoice be satisfied by issuance of shares of common stock of Timberline, par
value $0.001 (“Common Shares”) and payment of cash.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the promises and covenants
contained herein, the sufficiency of which is hereby acknowledged, all parties
hereto agree as follows:

A.

ISSUANCE OF SHARES

1.

The Shares and Cash.  Subject to the satisfaction of the terms and conditions
set forth in this Agreement, Timberline agrees to issue 950,000 Common Shares
(the “Exchange Shares”) and pay $50,000.00 cash (the “Exchange Cash”) to
Jefferies in exchange for Jefferies’ release of Timberline’s payment in cash of
the Fees reflected on the Services Invoice, and

1

--------------------------------------------------------------------------------

Jefferies agrees to accept such Exchange Shares and Exchange Cash from
Timberline as satisfaction, in full, of the Services Invoice.       

2.

Issuance of Shares.  Timberline shall deliver the stock certificate(s)
representing the Shares, registered with Timberline’s Transfer Agent and
delivered as set forth on Exhibit A attached hereto, free and clear from any
restrictions on transfer, except those restrictions on transfer described in
Section (B)(7) hereof, upon the later of: (i) three (3) business days following
the execution of this Agreement by both parties or (ii) three (3) business days
following the approval of the issuance of the Exchange Shares by the NYSE Amex
(“NYSE Amex”).

3.

Payment of Cash.  Timberline shall wire the Exchange Cash to Jefferies no later
than the third business day following the execution of this Agreement by both
parties.  Jefferies’ wiring instructions are as follows:

Bank of New York

ABA: 021000018

Account Number: 8900007001

Tax ID: 952622900

Reference: Timberline

B.

REPRESENTATIONS AND WARRANTIES OF JEFFERIES

Jefferies represents, warrants and covenants (and acknowledges that Timberline
is relying on such representations, warranties and covenants) that, as of the
date of this Agreement:

1.

Jefferies understands that, at the time Jefferies receives the Exchange Shares,
(i) the Exchange Shares will not be registered under the U.S. Securities Act of
1933, as amended (the “U.S. Securities Act”) or any applicable state securities
laws and may not be offered or sold absent such registration or an available
exemption from such registration requirements and (ii) the Exchange Shares will
not be approved or disapproved by the United States Securities and Exchange
Commission (the “SEC”) or any state securities agency.  Jefferies understands
and agrees that the Exchange Shares are being issued to Jefferies in reliance
upon the exemption provided under Rule 506 of Regulation D and/or section 4(2)
under the U.S. Securities Act;

2.

Jefferies is not an underwriter and Jefferies will acquire the Exchange Shares
solely for investment purposes for its own account and not with a view to, or
for, resale in connection with any distribution of securities within the meaning
of the U.S. Securities Act; and the Exchange Shares will not be obtained with a
view to or for the resale, distribution, subdivision or fractionalization
thereof; and the undersigned has no contract, undertaking, understanding,
agreement, or arrangement, formal or informal, with any person to sell,
transfer, or pledge to any person the Exchange Shares; and it understands that
the legal consequences of the foregoing representations and warranties to mean
that it must bear the economic risk of the investment for an indefinite period
of time because the Exchange Shares, at the time of receipt, will not be
registered under the U.S. Securities Act, and, therefore, may be resold only if
registered under the U.S. Securities Act or if an exemption from such
registration requirement is available;

2

--------------------------------------------------------------------------------

3.

Jefferies is an “accredited investor” that satisfies one or more of the criteria
set forth in Rule 501(a) of Regulation D of the U.S. Securities Act;

4.

Jefferies understands that, except as provided in Section E hereof, Timberline
is under no obligation to register the Exchange Shares or to cause or permit the
Exchange Shares to be transferred in the absence of any such registration or
exemption;

6.

Jefferies has not purchased the Exchange Shares as a result of any form of
general solicitation or general advertising (as such terms are used in Rule 502
(c) under Regulation D of the U.S. Securities Act);

7.

Jefferies acknowledges that the Exchange Shares will be “restricted securities,”
as such term is defined under Rule 144 of the U.S. Securities Act, and may not
be offered, sold, transferred, pledged, or hypothecated to any person in the
absence of registration under the U.S. Securities Act or an opinion of counsel
that registration is not required.  Without limiting the generality or
application of any other covenants, representations, warranties and
acknowledgements of Jefferies respecting resale of the Exchange Shares,
Jefferies will not offer, sell or otherwise transfer any of such Exchange Shares
directly or indirectly, unless in accordance with the following legend, which
Jefferies acknowledges the certificates representing the Exchange Shares
delivered pursuant to this Agreement shall bear (until such time as the Exchange
Shares have been registered under the U.S. Securities Act or an opinion of
counsel is received that such legend is no longer required):

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”).  THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
TIMBERLINE, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE
REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144,
RULE 144A OR REGULATION S THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS
AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS,
PRIOR TO SUCH SALE, FURNISHED TO TIMBERLINE AN OPINION OF COUNSEL, OR OTHER
EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO TIMBERLINE.  HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT.”

3

--------------------------------------------------------------------------------

If Rule 144 under the U.S. Securities Act is applicable, then the undersigned
may make sales of the Exchange Shares only under the terms and conditions
prescribed by Rule 144 of the U.S. Securities Act or other exemptions therefrom
(unless the Exchange Shares have been registered).  Timberline shall use
commercially reasonable efforts to cause its legal counsel to deliver an opinion
or such other documentation as may reasonably be required to effect sales of the
Exchange Shares under Rule 144;

8.

Jefferies consents to Timberline making a notation on its records or giving
instruction to the registrar and transfer agent of Timberline in order to
implement the restrictions on transfer set forth and described herein;

9.

Jefferies is a corporation and in good standing under the laws of its
jurisdiction of incorporation; and

10.

Jefferies acknowledges that Timberline has received notification from the NYSE
Amex that Timberline does not currently meet the continued listing requirements
of the NYSE Amex and that the common shares of Timberline could be de-listed
from NYSE Amex, regardless of Timberline’s commercially reasonable efforts to
maintain such listing;

11.

this Agreement has been duly executed and delivered by Jefferies and constitutes
a legal, valid and binding obligation of Jefferies enforceable against Jefferies
in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting the rights of creditors generally and except as limited by the
application of equitable principles when equitable remedies are sought, and by
the fact that rights to indemnity, contribution and waiver, and the ability to
sever unenforceable terms, may be limited by applicable law.

C.

REPRESENTATIONS AND WARRANTIES OF TIMBERLINE

Timberline represents, warrants and covenants (and acknowledges that Jefferies
is relying on such representations, warranties and covenants) that, as of the
date of this Agreement:

1.

Timberline has been duly incorporated and is validly existing as corporation in
good standing under the laws of its jurisdiction of incorporation and has the
power and authority (corporate or other) to own, lease, and operate its
properties and to conduct its business as so owned, leased or operated and
conducted on the date of this Agreement;

2.

All of the issued and outstanding shares of Timberline’s common stock have been
duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws;

3.

Timberline is duly qualified, registered and licensed to carry on business and
is in good standing in the jurisdictions in which it carries on business or owns
property where so required by the laws of that jurisdiction;

4

--------------------------------------------------------------------------------

4.

Timberline is not (i) in violation of any material term of or in material
default under its certificate of incorporation, bylaws or other organizational
document, (ii) in default (or, with the giving of notice or lapse of time, would
be in default or constitute a default) (“Default”) under any material term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Timberline is a party or by
which it or any of them may be bound, or to which any of the property or assets
of Timberline is subject (each, an “Existing Instrument”), or (iii) in violation
of any judgment, decree or order or any statute, ordinance, rule, law or
regulation applicable to Timberline, where such violation would have a material
adverse effect on Timberline.  Timberline’s execution, delivery and performance
of this Agreement, the issuance of the Exchange Shares and the payment of the
Exchange Cash (i)  will not result in any material violation of the provisions
of the charter or bylaws of Timberline, (ii) will not conflict with or
constitute a material breach of, or Default under, or result in the creation or
imposition of any security interest, mortgage, pledge, lien, charge, encumbrance
or adverse claim upon any property or assets of Timberline pursuant to, or
require the consent of any other party to any Existing Instrument or other third
party and (iii) will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to Timberline.  No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is
required for Timberline’s execution, delivery and performance of this Agreement,
issuance of the Exchange Shares and payment of the Exchange Cash, except: (i) as
required by the state securities or “blue sky” laws, (ii) approval of the
issuance of the Exchange Shares by the NYSE Amex and (iii) for such consents,
approvals, authorizations, orders, filings or registrations that have been
obtained or made and are in full force and effect;

5.

Timberline represents that there are no placement agent’s fees, financial
advisory fees, or brokers’ commissions or similar fees or payments due to any
person relating to or arising out of the issuance of the Exchange Shares under
this Agreement.  Timberline shall pay, and hold Jefferies harmless against, any
liability, loss or expense (including, without limitation, foreseeable and
documented attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim.  Nothing herein shall be construed to hold Timberline
responsible for any placement agent’s fees, financial advisory fees, or brokers’
commissions or similar fees or payments due in relation to or arising out of
Jefferies’ subsequent re-sale or transfer of the Exchange Shares, which fees or
commissions remain the sole obligation of Jefferies;

6.

Neither Timberline nor any person acting on its behalf, has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Exchange Shares under the U.S. Securities Act or cause this offering of the
Exchange Shares to be integrated with prior offerings by Timberline for purposes
of the U.S. Securities Act.  Neither Timberline nor any person acting on its
behalf, will take any action or steps referred to in the preceding sentence that
would require registration of the offer, issuance or sale of any of the Exchange
Shares under the U.S. Securities Act or cause the offering of the Exchange
Shares to be integrated with other offerings other than as required by this
Agreement;

7.

There are no legal or governmental actions, suits or proceedings pending or, to
the best of Timberline’s knowledge, threatened (i) against or affecting
Timberline, (ii) which has as

5

--------------------------------------------------------------------------------

the subject thereof any officer or director of, or property owned or leased by,
Timberline or (iii) relating to environmental or discrimination matters, where
in any such case (A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to Timberline or such officer or
director, (B) any such action, suit or proceeding, if so determined adversely,
would adversely affect the consummation of the transactions contemplated by this
Agreement and (C) any such action, suit or proceeding is or would be material in
the context of the sale of Exchange Shares.  

8.

Timberline has all necessary power and authority to issue and deliver the
Exchange Shares; the Exchange Shares have been duly authorized, and, when duly
issued and delivered to Jefferies pursuant to the terms of this Agreement, the
Exchange Shares will be duly-issued, fully-paid and non-assessable securities of
Timberline.  None of the Exchange Shares will be issued in violation of any
preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of Timberline;

9.

this Agreement has been duly authorized by all necessary corporate action on the
part of Timberline, and Timberline has full corporate power and authority to
undertake its obligations under this Agreement and execute this Agreement;

10.

this Agreement has been duly authorized, executed and delivered by Timberline
and constitutes a valid and legally binding obligation of Timberline enforceable
against it in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting the rights of creditors generally and except as limited
by the application of equitable principles when equitable remedies are sought,
and by the fact that rights to indemnity, contribution and waiver, and the
ability to sever unenforceable terms, may be limited by applicable law;

11.

no order ceasing, halting or suspending trading in securities of Timberline nor
prohibiting the sale of such securities has been issued to and is outstanding
against Timberline or its directors, officers or promoters, and, to the best of
Timberline’s knowledge, no investigations or proceedings for such purposes are
pending or threatened;

12.

neither Timberline nor any person acting on its or their behalf has engaged in
or will engage in any form of “general solicitation” or “general advertising”
(as such terms are used in Rule 502 (c) under Regulation D of the U.S.
Securities Act) in the United States with respect to the Exchange Shares;

13.

the shares of Timberline’s common stock are registered pursuant to Section 12(b)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are
listed on the NYSE Amex, and Timberline has taken no action designed to, or
likely to have the effect of, terminating the registration of the shares of
common stock under the Exchange Act or delisting the shares of common stock from
the NYSE Amex, nor has Timberline received any notification that the SEC is
contemplating terminating such registration.    Timberline represents that it
has received notice of de-listing from the NYSE Amex, that the NYSE Amex has
accepted Timberline’s compliance plan pursuant to the rules of the NYSE Amex,
and that as of the date of this Agreement Timberline is in compliance with such
plan. Timberline shall cause the Exchange

6

--------------------------------------------------------------------------------

Shares to be listed on the NYSE Amex and shall use its commercially reasonable
efforts to maintain the  continued listing of its common shares on the NYSE Amex
until the earlier of twenty-four months after the execution of this Agreement or
such date on which Jefferies shall have sold all the Exchange Shares.;

14.

any documents filed with the SEC by Timberline, at the time they were or
hereafter are filed with the SEC, complied and will comply in all material
respects with the requirements of the Exchange Act;

15.

since March 31, 2009, there has been no material adverse change and no material
adverse development in the business, properties, operations, condition
(financial or otherwise), results of operations or prospects of Timberline; and
  

16.

until the earlier of twenty-four months after the execution of this Agreement or
such date on which Jefferies shall have sold all the Exchange Shares, Timberline
shall timely file all reports required to be filed with the SEC pursuant to the
Exchange Act, and Timberline shall not terminate its status as an issuer
required to file reports under the Exchange Act even if the Exchange Act or the
rules and regulations thereunder would otherwise permit such termination.

D.

RELEASE

Subject to Section G(9) below, in consideration of the issuance of the Exchange
Shares and the payment of the Exchange Cash as satisfaction, in full, of the
Services Invoice, Jefferies (including its officers, employees, agents,
representatives, assignees, and successors) hereby releases Timberline
(including its officers, employees, agents, representatives, assignees, and
successors) from any and all manner of action and causes of action, suits,
debts, dues, accounts, contracts, agreements, judgments, claims and demands
whatever, whether in law or in equity, which now exist or may subsequently arise
out of the Services Invoice or the Engagement Agreements .

E.

REGISTRATION RIGHTS

Within 30 days of the date hereof, Timberline agrees to include Jefferies or its
nominee as a selling shareholder of the Exchange Shares in a registration
statement under the U.S. Securities Act that Timberline will file with the SEC
relating to the resale under the U.S. Securities Act of the Exchange Shares, and
Timberline hereby agrees to cause such registration statement to become
effective as quickly as practicable but in any event within 120 days of such
filing and to use reasonable best efforts to ensure that such registration
statement remains effective until the earlier of twenty-four months after the
execution of this Agreement or such date on which Jefferies shall have sold all
the Exchange Shares.

F.

INDEMNITY.  

Timberline shall indemnify, defend and hold Jefferies harmless against any and
all liabilities, loss, cost or damage, together with all reasonable costs and
expenses related thereto (including reasonable legal and accounting fees and
expenses), to the extent such are determined,

7

--------------------------------------------------------------------------------

by a final, non-appealable judgment by a court or arbitral tribunal, to have
arisen from, related to, or connected with any untrue, inaccurate or breached
statement, representation, warranty or covenant of Timberline set forth in this
Agreement.  Timberline undertakes for a period of 12 months after the execution
of this Agreement to notify Jefferies within 2 business days of any change in
any representation, warranty or covenant of Timberline set forth in this
Agreement to be untrue.

Jefferies shall indemnify, defend and hold Timberline harmless against any and
all liabilities, loss, cost or damage, together with all reasonable costs and
expenses related thereto (including reasonable legal and accounting fees and
expenses), to the extent such are determined, by a final, non-appealable
judgment by a court or arbitral tribunal, to have resulted solely from
Jefferies’ gross negligence or willful misconduct under this Agreement.

G.

MISCELLANEOUS PROVISIONS

1.

Successors and Assigns.  Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties.  Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

2.

Governing Law.  This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regards to conflict of law
principles thereof.  

3.

Titles and Subtitles.  The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.

4.

Notices.  All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day; (iii)
five days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt, as follows:

If to Jefferies, to:

Jefferies & Company, Inc.

520 Madison Avenue

New York, NY  10022

Attention: General Counsel

If to Timberline, to:

Timberline Resources Corporation

101 E. Lakeside

Coeur d’Alene, ID 83814

Attention: Randal Hardy

8

--------------------------------------------------------------------------------

5.

Amendments and Waivers.  Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Timberline and Jefferies.  

6.

Severability.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

7.

Entire Agreement.  This Agreement and the documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein.

8.

Counterparts.  This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

9.

Material Breach of Agreement by Timberline.  If prior to the earlier of
twenty-four months after the execution of this Agreement or such date on which
Jefferies shall have sold all the Exchange Shares, Timberline materially
breaches any of the provisions of this Agreement, Jefferies shall promptly
notify Timberline of any such material breach of the Agreement and demand that
Timberline cure the breach.  Upon receipt of the notice of a material breach of
the Agreement and demand for cure from Jefferies, Timberline shall have 15
business days to cure the material breach to the satisfaction of Jefferies, not
to be unreasonably withheld.  If after the expiration of the 15-business-day
cure period, the material breach of the Agreement has not been cured to the
satisfaction of Jefferies, not to be unreasonably withheld, (A) all provisions
of this Agreement except Sections F, G(2), G(4), G(6), G(9) and G(10) shall
become null and void and (B) Jefferies shall be obligated to return any unsold
Exchange Shares to Timberline.  Upon surrender to Timberline of any unsold
Exchange Shares, (A) the Service Invoice will be deemed “not satisfied”, except
that the amount of Fees owed to Jefferies under the Service Invoice shall be
reduced by the Exchange Cash and the value of the aggregate proceeds received by
Jefferies from the sale of any Exchange Shares, and (B) Jefferies will no longer
be bound by the provisions of the release of section D of this Agreement.  

10.

Notice of Sales.  To aid Timberline in meeting its obligations under this
Agreement, until the earlier of twenty-four months from the date of execution of
this Agreement or until such time as Jefferies has sold all of the Exchange
Shares, Jefferies agrees to provide Timberline by the end of any month in which
any sales or transfers of the Exchange Shares occurs with a notice detailing the
number of Exchange Shares sold and the price at which such Exchange Shares are
sold and Jefferies agrees to promptly notify Timberline when all Exchange Shares
have been sold.   

[SIGNATURE PAGE FOLLOWS]

9

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

[ex1022002.gif] [ex1022002.gif]

10

--------------------------------------------------------------------------------

EXHIBIT A

Registration and Delivery Instructions

[ex1022004.gif] [ex1022004.gif]

--------------------------------------------------------------------------------

EXHIBIT B

Services Invoice

[ex1022005.jpg] [ex1022005.jpg]

2