Archive for January, 2010

Underworld Resources Identifies New Drill Targets

Underworld Resources Inc. has identified a 40-kilometre-long trend of gold prospects and anomalous gold in soil geochemistry at the JP Ross and Maisy May property. This trend exhibits similar geologic and geochemical characteristics to the White Gold trend, which hosts the Golden Saddle and Arc Deposits. Within the trend, Underworld has identified a Golden Saddle-style geochemical signature that is underlain by similar host rocks. The company intends to aggressively drill test this area.

Underworld recently announced the initial resource estimation for the Golden Saddle and Arc deposits. The resource at Golden Saddle includes 1,004,570 ounces at a grade of 3.2 grams per tonne Au in an indicated category, with an additional 407,413 ounces of inferred resources at an average grade of 2.5 g/t Au. At the Arc zone, the initial resource includes 170,470 ounces at an average grade of 1.2 g/t Au in the inferred category.

The JP Ross trend is road-accessible, located approximately 65 km south of Dawson City, Yukon, and 35 km north of the White Gold trend. Underworld recently completed additional claim staking, expanding this claim group to 312 square km. JP Ross includes the headwaters to multiple active, past-producing placer operations, including Henderson, Maisy May and Black Hills creeks. Production records from the Yukon Geological Survey (2009) report over 177,689 ounces of gold mined from these operations.

During 2009, Underworld collected over 6,200 soil samples on the property, primarily “ridge and spur” reconnaissance lines. Four soil grids were completed over select target areas, including the Frenzy, Marnie, Vertigo and Spellbound prospects. This work has identified a 40-kilometer-long and 12-kilometre-wide area of anomalous gold and pathfinder elements. The northwest trend at JP Ross is a parallel orientation to the 9.5-kilometre-by3.5-kilometre trend at White Gold.

The Frenzy gold-in-soil anomaly measures 2.7-by-one-kilometres and consists of 459 samples with an average grade of 18 parts per billion Au, ranging from trace to 1,142 ppb Au. The prospect is underlain by similar host rocks to the Golden Saddle deposit, with a similar geochemical signature. The Golden Saddle soil anomaly, 1.8-by-0.9-kilometre in area, consists of 348 samples which outline an “u”-shaped anomaly with an average grade of 22 ppb Au, ranging from trace to 364 ppb Au.

The ridge and spur sampling has identified numerous areas for additional grid soil sampling, including Sabotage Ridge, 1,600 metres long, which is a single ridge line gold with soil samples ranging from trace to 132 ppb Au, averaging 23 ppb. Samples for the entire property range from trace to 2,200 ppb Au, averaging five ppb.

The JP Ross and Maisy May area is underlain by a similar rock types and structures to White Gold, including metamorphosed mafic volcanic, intermediate intrusive and sedimentary rocks, as well as mid-Cretaceous to Early Tertiary plutons and volcanics. At White Gold, Golden Saddle is hosted within a metavolcanic sequence and Arc is hosted with sedimentary rocks.

Adrian Fleming, president, said: “The new soil geochemical results for JP Ross vindicate the exploration approach we have used, are similar or of larger magnitude to the footprint of the Golden Saddle deposit and confirm the potential of the White Gold district to host multiple occurrences of gold mineralization. We look forward to the results of our proposed aggressive 2010 regional drill program.”

Due to poor exposure of bedrock in White Gold, soil sampling is the primary reconnaissance exploration tool utilized by Underworld. It plans to set up an additional exploration camp at JP Ross to complete further soil sampling, trenching and diamond drilling during the 2010 field season.

SRK Consulting (Canada) Inc. was engaged by Underworld in September, 2009, to evaluate the mineral resources for White Gold discovered and identified by drill programs carried out in 2008, and 2009.

Underworld has implemented a rigorous quality control and quality assurance program at White Gold using best industry practice. Elements of the program include chain of custody of samples, insertion of standard and blank samples, and check assays. Soil and rock samples were collected by experienced, trained geologists and geological technicians, and shipped in sealed bags to Acme Laboratories in Vancouver, B.C.

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Underworld’s Initial Resource Estimate at Golden Saddle: Indicated Resources of 1,004,570 Oz. at 3.2 g/t Au and Inferred Resources of 407,413 oz at 2.5 g/t Au

Underworld Resources Inc. has released the initial resource estimation for the Golden Saddle and Arc deposits at the White gold property, Yukon. The resource at Golden Saddle includes 1,004,570 ounces at a grade of 3.2 grams per tonne gold in an indicated category, with an additional 407,413 ounces of inferred resources at an average grade of 2.5 grams per tonne gold. At the Arc zone, the initial resource includes 170,470 ounces at an average grade of 1.2 grams per tonne gold in the inferred category.

The resource estimates were undertaken by SRK Consulting (Canada) Inc. and are reported in accordance with the guidelines of the Canadian Securities Administration National Instrument 43-101. SRK carried out database verification, grade shell geometry, variography and ordinary kriging exercises. A database with a total of 13,260 samples from 96 drill holes was used for the Golden Saddle and Arc areas. The indicated and inferred mineral resources were classified according to the CIM definition Standards for Mineral Resources and Mineral Reserves (December, 2005) by Marek Nowak, PEng, of SRK Consulting, a qualified person as defined by NI 43-101.

Indicated and inferred resources were categorized as open pit or underground using 10-metre-by-10-metre-by-10-metre blocks at 0.5 gram per tonne gold and 2.0 grams per tonne gold cut-off grades, respectively, and using a Whittle shell model. Resources were estimated from a total mineral inventory of 1,480,870 ounces averaging 2.71 grams per tonne gold at the Golden Saddle deposit, and 170,470 ounces averaging 1.21 grams per tonne gold at the Arc deposit. It should be cautioned that the mineral inventory estimates should not be misconstrued as mineral resources.

 

          GRADE TONNAGE REPORT USING AN ORDINARY KRIGING ESTIMATE

Area           Type         Classification  Tonnes       Gold       Contained
                                            (000s)       (g/t)       gold (oz)

Golden Saddle  Open Pit     Indicated        9,665       3.19         990,840
                            Inferred         4,104       2.33         307,820
               Underground  Indicated          132       3.23          13,730
                            Inferred           918       3.38          99,590
Arc            Open Pit     Inferred         4,369       1.21         170,470

(i)Reported at a cut-off of 0.5 gram per tonne gold for open pit and 2.0
grams per tonne gold for underground. Mineral resources are not mineral
reserves and do not have demonstrated economic viability. All numbers have
been rounded to reflect the relative accuracy of the estimates.

 

At Golden Saddle, drill holes completed on approximately 50-metre-by-50-metre collar spacing were used to establish the resource. Wireframes were constructed to enclose mineralized zones with composited assays greater than 0.5 gram per tonne gold. The wireframes are therefore grade shells guided by the geology and modelled on vertical sections with closed polygons. Composited lengths of three metres and 10 metres were used to further guide the width of the wireframe mineralized zones, with the understanding that parts of the resource would be considered for open-pit mining as well as underground mining. The mineralization was split into four distinct zones for Golden Saddle. The primary mineralized zone is coded as the 110 zone. The 120, 130 and 140 zones have less continuity along strike and are slightly shallower in dip. The 120 zone is modelled intersecting the 110 zone downdip, while the other zones are presumed to intersect the 110 zone at some depth below the current model extents. An overall deposit 580 metres in strike length and up to 560 metres in downdip length has been defined.

The Golden Saddle deposit remains open to expansion along strike to the northeast and downdip to the northwest. Strength of alteration and mineralization increases in intensity to the northeast. The most northeasterly and deepest holes completed to date include holes WD09-101, which intersected 4.86 grams per tonne gold over 23.38 metres and WD09-103 which intersected 5.07 grams per tonne gold over 25.38 metres. For a complete list of drill hole intercepts and location maps, please see Underworld’s website.

At Golden Saddle, gold mineralization is preferentially hosted within metamorphosed felsic intrusive units, as well as felsic and mafic metavolcanic rocks, and is associated with quartz veins, stockworks and breccia zones, as well as pyrite disseminations that form northeast-striking and moderately northwest-dipping (plus/minus-50-degree) tabular bodies of gold mineralization. Comprehensive metallurgical testing indicates that a 92-per-cent-or-better gold recovery can be expected with a conventional plant at Golden Saddle, with 6 per cent to 9 per cent of contained gold reporting to a gravity concentrator prior to cyanidation.

At Arc, a total of 15 holes at approximately 100-metre-by-100-metre collar spacing and a single wireframe were used to establish the resource. Gold mineralization is preferentially hosted within metamorphosed sedimentary rocks in a broad zone ranging from to 10 to 30 metres in thickness and dipping 34 degrees to the north-northeast. Mineralization is associated with pyrite and arsenopyrite within silicified breccia and shear zones. The zone extends from the surface, has a strike length of 600 metres and extends 230 metres downdip, and is still open along strike and downdip.

Underworld is currently planning an aggressive drill program for 2010 to further expand the Golden Saddle and Arc deposits, and to drill test several new regional targets at the company’s extensive land position in the White gold district.

Quality assurance

SRK Consulting (Canada) Inc. was engaged by Underworld in September, 2009, to evaluate the mineral resources for the White gold project discovered and identified by drill program carried out in 2008 and 2009.

These mineral resource estimates represent the first resource evaluation on the White gold project. The resource evaluation incorporates all drilling completed by Underworld to date. In the opinion of SRK, the block model resource estimates reported herein are a reasonable representation of the global gold mineral resources found in the Golden Saddle and Arc zones at the current level of sampling. Mineral resources for the White gold project are reported in accordance with the guidelines of the Canadian Securities Administrators National Instrument 43-101, and have been estimated in conformity with generally accepted CIM Estimation and Mineral Resource and Mineral Reserve Best Practices guidelines. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves. The resource estimate was completed by Marek Nowak, PEng (APEGBC No. 16985), a qualified person as defined by NI 43-101.

Underworld has implemented a rigorous quality assurance/quality control program at the White gold property using best industry practice. Elements of the program include chain of custody of samples, insertion of standard and blank samples, and check assays. Drill core is sawn in half and shipped in sealed bags to ALS Chemex Laboratories in Vancouver, B.C. Check assays are being undertaken by Acme Laboratories, Vancouver. Optimized metallurgical testing is being undertaken by Inspectorate PRA laboratories, Vancouver, under the guidance of JDS Energy & Mining Inc.

The company’s exploration program is being directed by Adrian Fleming, MAIG, RPGeo, MgoldsIMM, president of Underworld Resources and a qualified person as defined by NI 43-101. Mr. Fleming prepared and approves of the content of this release.

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Underworld Returns Excellent Gold Recoveries at White Gold Property

Underworld’s Optimized Metallurgical Testwork Returns Excellent Gold Recoveries at White Gold Property.

Underworld Resources Inc. has released the results of a comprehensive metallurgical testing program on samples from the Golden Saddle and Arc deposits, at the 100-per-cent-owned White Gold property, Yukon.

Recovery ranged from 78 per cent to 97 per cent at the Golden Saddle zone and the comprehensive metallurgical testing indicate that 92 per cent or better gold recovery can be expected with a conventional plant at Golden Saddle.

Five 72-hr bottle-roll cyanidation tests were carried out on the samples which assessed gold recoveries based on variable grind sizes and cyanidation intensity. CIL cyanidation boosted gold recoveries up to 98%. Gravity recovery tests showed that from 6% to 9% of contained gold could report to a gravity concentrator prior to cyanidation. Near-surface oxidized material returned 94% gold recovery. Surface oxidation due to weathering at Golden Saddle ranges from 10 to 40 meters, averaging about 20 meters below surface. Local partial oxidation occurs near post-mineralization fault zones. The majority of mineralization encountered to-date at Golden Saddle is unoxidized.

Test work included several conventional processing options including: gravity gold recovery, bottle-roll cyanidation, carbon in leach (CIL) cyanidation and flotation. The impact of grind size on cyanidation tests was also investigated. Test work for the Golden Saddle Deposit was completed on core samples exhibiting different mineralization styles, including: oxide, sulfide, mixed oxide-sulfide material, as well as a low grade composite sample. Testing was also completed on a composite sample from the Arc deposit, located one kilometer south of Golden Saddle.

At the Arc zone, a 72-hr bottle roll and CIL cyanidation tests on a composite sample suggest gold recoveries ranging from 28% to 37%, however, floatation tests boost gold recoveries to 86%. Cyanidation at the Arc zone is impacted by graphite, which is not present at the Golden Saddle Zone.
The metallurgical test work was completed by Inspectorate PRA Labs of Vancouver, B.C. Bottle roll cyanide leach tests were performed for a target grind size of 80% passing 105 microns in 1 g/L NaCN.

The contrasting mineralogy and gold recoveries at Golden Saddle and Arc are due to varying host rock lithologies. Golden Saddle occurs within metavolcanic and metaintrusive rocks, with gold mineralization associated with pyrite veining, silicification, quartz breccias and stockworks, whereas the Arc Deposit is hosted by metasedimentary rocks, and is typified by hydrothermal breccias and silicification.

Underworld is currently working on an NI-43-101 compliant initial resource estimate for the White Gold Property, results of which are expected within the next month.

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