Underworld Resources Inc. has released final drill results from the 2009 drilling program at the White gold property, Yukon, including five drill holes from the Golden Saddle zone. Mineralization has also been discovered at the McKinnon zone, located five kilometres to the east of the Golden Saddle. 

      HIGHLIGHTS OF THE MOST RECENT ASSAYS
           FROM THE GOLDEN SADDLE ZONE

                 Weighted avg.
Hole ID               (g/t Au)    Grade length (m)

WD09-102                 1.46               158.5
WD09-103                 1.98                67.7
WD09-106                 2.97                25.5

These results include step-out holes on the north and northeastern margin of the current drill pattern which confirm continuity of mineralization down-dip to the north and along strike to the northeast. Thick intercepts of gold mineralization continue to be hosted by the felsic metaintrusive which contains much of the Golden Saddle deposit. Mineralization remains open to expansion to the north and northeast.

Hole WD09-102, which intersected 158.5 metres averaging 1.46 grams per tonne Au from 368.5 metres, also included 41.72 metres averaging 4.36 g/t Au from 385 metres. Hole WD09-102 was drilled from the same set-up as hole WD09-80, which previously returned 16.94 metres averaging 5.94 g/t Au from 358 metres and demonstrates continuity of a higher grade core zone within a thick envelope of gold mineralization.

Hole WD09-103 is the most northerly hole drilled at Golden Saddle. It returned 67.7 metres averaging 1.98 g/t Au from 357.5 metres and also included 25.38 metres averaging 4.48 g/t Au from 363.62 metres. Hole WD09-103 was a 60 m down-dip step-out from hole UW09-101. Hole WD09-101 returning 142 metres averaging 1.43 g/t Au from 267 metres, including 48.75 metres averaging 3.67 g/t Au as previously reported.

Holes WD09-104, 105 and 106 are infill holes in the centre and eastern part of Golden Saddle deposit and have returned near-surface gold intercepts. Hole WD09-104 was lost at 356.6 metres in a fault. At the end of this hole, the drill core was still mineralized. The 2009 drill program included 25,670 metres of core drilled, with 19,023 metres in 60 holes completed at the Golden Saddle deposit. The 2009 drill program was completed ahead of schedule and under budget.

Underworld anticipates completing an initial NI 43-101 resource estimate for the Golden Saddle deposit in January, 2010, using the 75 holes drilled at approximate 50 m spacing during 2008 and 2009.

Visible gold mineralization was discovered at the McKinnon prospect in July, 2009, within altered and quartz veined meta-intrusive exposed on the access road from the barge landing to the Golden Saddle deposit. The host lithologies alteration and mineralization observed at McKinnon are analogous to Golden Saddle. Follow-up trenching uncovered a quartz breccia which averaged 60.2 g/t Au and 354 g/t Ag in three samples. Additional drilling will be carried out at this prospect as well as at other targets at the White gold property during the 2010 program.

Environmental baseline data collection is continuing, metallurgical testwork is under way and community relations dialogue continues at the White gold project. JDS Energy and Mining has been retained to complete a non-NI 43-101-compliant preliminary economic assessment to quantify the viability of a mine development at Golden Saddle. Based on the results of this study, to be completed in March, 2010, Underworld will plan a comprehensive program of additional engineering and processing studies to advance the White gold project toward feasibility.

Intrusion-related gold mineralization at the Golden Saddle zone is preferentially hosted within metamorphosed felsic intrusive units, as well as felsic and mafic metavolcanic rocks. Gold mineralization is associated with quartz veins, stockwork and breccia zones, as well as pyrite veinlets and disseminations. The alteration assemblage includes pervasive albite, carbonate, sericite and silicification. The main mineralized zone at Golden Saddle strikes to the northeast, with a gentle to moderate dip to the northwest.

JP and Ross property

The company is pleased to announce that it has recently completed an agreement covering the JP and Ross claims whereby Underworld Resources may earn a 100-per-cent interest. The 703-claim package covering 142 square kilometres is located in the White gold district north of the Stewart River and accessible from Dawson City by road.

The area has an extensive history of placer gold mining but limited hard rock exploration and no drilling has been carried out there. A total of 81 rock samples were collected during the 2009 summer season. Assays returned include 1.25 g/t Au with 17.4 g/t Ag in a quartz vein with boxworks after pyrite, and 0.47 g/t Au with 4.8 g/t Ag in a quartz vein displaying several deposition events. Approximately 5,500 auger soil samples were also collected during this program, assays are still pending. The acquisition of the JP Ross property extends Underworld Resources’ landholdings in the White gold district to 731 square kilometres.

The company can earn a 100-per-cent interest in the JP Ross property from a third party Yukon resident by completing annual exploration programs totalling $1.6-million ($43,000 first year), paying $450,000 in cash ($75,000 first year) and issuing 750,000 (145,000 first year) Underworld shares. Underworld will reimburse the third party $117,000 ($250 per claim comprising the property) to cover staking costs.

Commencing on July 15, 2015 (and in the event Underworld is continuing with the option), Underworld agrees to pay a $30,000 annual advance until the commencement of commercial production with respect to the property. The annual advance royalty payments will be deducted from any royalty payments.

Following both the exercise of the option and the commencement of commercial production with respect to the property, Underworld will pay a royalty, being equal to 2.0 per cent of net smelter returns. Underworld will be entitled at any time and from time to time to purchase one-half of the royalty for $2-million.

Underworld Resources is pleased to announce results from the White Gold Property, Yukon, including 17 drill holes from the Golden Saddle Zone. At Golden Saddle, mineralization remains open to expansion along strike to the northeast and at depth.

Results include step-out holes that have expanded the Golden Saddle Deposit along strike to the northeast, and down-dip. In the eastern portion of the Deposit, thick intercepts of gold mineralization continue to be encountered by step-out holes with mineralization hosted by mafic metavolcanics in contrast to felsic metaintrusive which were encountered previously.

Drill Hole WD09-91, returned a near surface intercept of 91.28 meters averaging 3.68 g/t Au. Drill Hole WD09-94 returned 104.58 meters averaging 1.01 g/t Au, and was terminated still in mineralization Drill hole WD09-99, which intersected 98.0 meters averaging 1.73 g/t Au, and WD09-101, which intersected 93.88 meters averaging 2.10 g/t Au. Both drill holes were completed from the same set-up and are the most northeasterly holes reported to-date. Drill holes WD09-72 and WD09-80 are step out holes down dip at Golden Saddle.

An additional five holes are pending assay at Golden Saddle and three holes are pending assay on the McKinnon zone. Underworld anticipates completing an initial NI 43-101 Resource Estimate for Golden Saddle by January 2010, using completed multiple infill holes at 50 meter spacings.

Most recent drill results include:

*True Widths are estimated to be between 70% and 100% of drilled interval

The 2009 exploration program at the White Gold Project is now complete. The program included 25,670 meters of drilling, including 19,023 meters in 60 holes at the Golden Saddle Deposit.

Intrusive-related gold mineralization at the Golden Saddle Zone is preferentially hosted within metamorphosed felsic intrusive units, as well as felsic and mafic metavolcanic rocks. Gold mineralization is associated with quartz veins, stockwork and breccia zones, as well as pyrite veinlettes and disseminations. The alteration assemblage includes pervasive K-spar, carbonate, sericite and silicification. The main mineralized zone at Golden Saddle strikes to the northeast, with a gentle to moderate dip to the northwest.

The objective of the 2009 drill program at Golden Saddle and the Arc Zone was to expand the known extent of mineralization in all directions, with the intent to complete an initial NI 43-101 compliant resource estimates for both Zones. Drill spacing was nominally 50 and 100 meter centers at Golden Saddle and Arc, respectively.

Three drill holes were completed at the Donahue Zone, and five holes were completed at the South Donahue Zone. These targets are located 3km’s and 4.5km’s southeast of the Golden Saddle Zone, respectively. They occur within similar host rocks to Golden Saddle with a similar geochemical signature. At Donahue, a high-grade zone averaging 21.5 g/t Au over 0.73 meters was encountered in DN09-03. At South Donahue, multiple one to five meter thick quartz veins were intersected within an altered granitoid, however no significant values were returned.

At the Golden Saddle Zone, a total of 23 samples from six 2008 drill holes averaging 6.60 g/t Au have been analyzed by bottle roll cyanide leach methodology to determine metallurgical behaviour. Average gold recovery was 85.5%, ranging from 65.7 to 93.7%. Samples included near-surface oxidized material, partially oxidized, and unoxidized material. Unoxidized and partially oxidized mineralization returned higher recoveries, averaging 87.7%, with oxidized mineralization averaging 73.6%. Additionally, higher grade individual samples, over 10 g/t Au, typically displayed slightly lower recoveries averaging 83.7%. This is potentially due to reduced leaching with coarse gold, which could possibly be amenable to gravity separation to boost recoveries.

Underworld Resources has announced that results have been received from an additional four holes from the Golden Saddle Zone and three additional holes from the Arc Zone at the White Gold Property, Yukon. At Golden Saddle, the highest grade gold mineralization to date was encountered along strike to the northeast in hole WD09-47 (75 metre step-out). Highlights include:

• WD09-43: 106.0 meters averaging 2.29 g/t Au
• WD09-44: 56.1 meters averaging 3.91 g/t Au
• WD09-47: 31.2 meters averaging 9.20 g/t Au

 

Golden Saddle

At Golden Saddle, WD09-47 returned 9.20 g/t Au over 31.2 meters, including 29.82 g/t Au over 5.82 meters and 19.77 g/t Au over 4.0 meters. WD09-47 is located 75 meters along strike to the northeast from WD09-44 which returned 3.91 g/t Au over 56.1 meters. WD09-47 intersected a series of thick quartz veins hosting visible gold mineralization. The veins occur along the same north dipping structure as previous thick intercepts to the west, however the host rock changes from an augen gneiss to amphibolite gneiss. It is interpreted that this rock change focuses the gold mineralization into a tapered higher grade structure. The current drilling at Golden Saddle is targeting extensions to the higher grade gold mineralization down-dip and along strike to the northeast from WD09-47.

WD09-44 and 45 were drilled from the same setup, with mineralization hosted with metamorphosed intrusive rocks. WD09-44 encountered 56.1 meters averaging 3.91 g/t Au, including 32.5 meters averaging 5.58 g/t Au. WD09-45 tested 70 meters up-dip from WD09-44, intersecting 2.1 g/t Au over 13.3 meters within a less favourable host rock.

Infill hole WD09-43 returned 2.29 g/t Au over 106.0 meters, and demonstrates excellent continuity between previously reported holes WD09-31, which returned 3.4 g/t Au over 104 meters to the southwest, and WD09-38, which intersected 0.95 g/t Au over 153.0 meters to the northeast. WD09-38 includes higher grade upper and lower intervals, including over 3.1 g/t Au over 17.2 meters and 4.1 g/t Au over 16.0 meters.

Assays are pending for 10 additional drill holes at Golden Saddle including stepouts to the north, south and east.

Arc Zone

At the Arc Zone, located two kilometers southeast of Golden Saddle, assays for the final three of five holes drilled in the 2009 Phase 1 drill campaign have been received. WD09-40 and 42 are located 200 and 400 meters respectively southeast from drill hole WD08-14 which was completed in 2008. These holes encountered narrower zones of the quartzite hosted mineralization. Drill hole WD09-42 was located north of WD09-37 and 39 at the Arc to test for extension to the north and a possible link between Arc Zone and Golden Saddle. This hole was drilled where the host quartzite has been fault offset to the south.

Assay Results

GOLDEN SADDLE ZONE

*True Widths are estimated to be between 70% and 100% of drilled interval  

The mineralization at Golden Saddle is preferentially hosted within a deformed intrusive unit (augen gneiss), schists and amphibolites. Gold mineralization is associated with quartz breccias, veins and stockworks, as well as silica, sericite, K-feldspar, and ankerite alteration. Sulphide mineralization is dominated by disseminated and stockwork pyrite, with local visible gold, chalcopyrite, galena and molybdenite.

Two drills are currently working on the 6,000 meter 2009 Phase 2 program on the Property. During 2009, 35 drill holes have been completed to date on the Property. The current drilling is focused on extending the Golden Saddle and Arc Zones. Drilling is currently testing the western extension to Arc Zone, as well as other targets on the property such as Minneapolis Creek and Donahue. A third drill rig is currently being mobilized to the Property.

Drill hole location plans and cross sections from the Golden Saddle and Arc Zones are available at www.underworldresources.com.

Exploration work, including mechanical trenching, is continuing on several other targets at the White Gold Property prior to drill testing during the summer of 2009. Underworld intends to complete a NI43-101 Resource Estimate on the Arc and Golden Saddle Zones in Q4/09.