Underworld Resources Inc.

Underworld Resources Inc.

October 28, 2009 09:01 ET

Underworld Step-Out Holes Expand Golden Saddle Deposit, Including 1.46 g/t Au Over 158.5 Meters and 1.98 g/t Au Over 67.7 Meters

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 28, 2009) - Underworld Resources Inc. (TSX VENTURE:UW) is pleased to announce 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 kilometers to the east of the Golden Saddle.

Highlights of the most recent assays from the Golden Saddle Zone include:

Hole IDWeighted avg. grade
(g/t Au)
Length (m)
WD09-1021.46 g/t Au 158.5 meters
WD09-1031.98 g/t Au 67.7 meters
WD09-1062.97 g/t Au25.5 meters

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 meters averaging 1.46 g/t Au from 368.5 meters also included 41.72 meters averaging 4.36 g/t Au from 385 meters. Hole WD09-102 was drilled from the same set up as Hole WD09-80, which previously returned 16.94 meters averaging 5.94 g/t Au from 358 meters 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 meters averaging 1.98 g/t Au from 357.5 meters and also included 25.38 meters averaging 4.48 g/t Au from 363.62 meters. Hole WD09-103 was a sixty meter down-dip step out from Hole UW09-101. Hole WD09-101 returning 142 meters averaging 1.43 g/t Au from 267 meters, including 48.75 meters averaging 3.67 g/t Au as previously reported.

Holes WD09-104, 105 & 106, are infill holes in the center and eastern part of Golden Saddle deposit and have returned near-surface gold intercepts. Hole WD09-104 was lost at 356.6 meters in a fault. At the end of this hole, the drill core was still mineralized. The 2009 drill program included 25,670 meters of core drilled, with 19,023 meters 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 meter spacing during 2008 and 2009.

An updated drill plan and cross-sections can be accessed at www.underworldresources.com.

Most recent drill results include:

Hole-IDFrom (m)To (m)Length (m)Au (g/t) 
Golden Saddle    
WD09-102 368.50 527.00 158.5 1.46 
including 385.00 426.72 41.72 4.36 
WD09-103 357.50 425.20 67.70 1.98 
including 363.62 389.00 25.38 4.48 
WD09-104 323.59 355.5 31.91 1.48 
WD09-105 74.00 79.46 5.46 3.58 
WD09-106 151.50 177.00 25.50 2.97 
MK09-01 165.50 167.00 1.50 1.40 
MK09-02 60.00 61.51 1.51 1.63 
MK09-03No significant intercepts  

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

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 base line data collection is ongoing, metallurgical testwork in underway and community relations dialogue continues at the White Gold Project. JDS Energy and Mining have 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 towards 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% interest. The 703 claim package covering 142 square kilometers 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' land holdings in the White Gold District to 731 square kilometers.

The Company can earn a 100% interest in the JP Ross property from a Third-Party Yukon Resident by completing annual exploration programs totaling $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% of Net Smelter Returns. Underworld will be entitled at any time and from time to time to purchase 1/2 of the Royalty for $2,000,000.

Quality Assurance

Underworld has implemented a rigorous QA/QC 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 completed by Acme Laboratories, Vancouver.

The ongoing 2009 Exploration Program is directed by Adrian Fleming, M.A.I.G, RPGeo, M.Aus.I.M.M., 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.

Underworld Resources is a well-structured junior exploration company focused on expanding its new gold discovery in the Yukon. For further information contact Jeff Sundar, Investor Relations at 604-684-4001.


Adrian Fleming, President

Forward Looking Statement
Some of the statements contained in this press release are forward-looking statements. Forward-looking statements are not historical facts and are subject to a number of risks and uncertainties beyond the Company's control, including, but not exclusively, statements regarding potential mineralization, exploration results, completion of work program and studies, and future plans and objectives of the Company. Resource exploration, development and operations are highly speculative, characterized by a number of significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral resources but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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