Underworld Resources Inc.

Underworld Resources Inc.

January 19, 2010 09:00 ET

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

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 19, 2010) - Underworld Resources Inc. (TSX VENTURE:UW) is pleased to announce 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 g/t 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 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, P. Eng, of SRK Consulting a "qualified person" as defined by NI 43-101.

Indicated and inferred resources were categorized as open pit or underground utilizing 10 m by 10 m by 10 m blocks at 0.5 g/t Au and 2.0 g/t Au cut–off grades, respectively, and utilizing a Whittle shell model. Resources were estimated from a total mineral inventory of 1,480,870 ounces averaging 2.71 g/t Au at the Golden Saddle Deposit, and 170,470 ounces averaging 1.21 g/t Au at the Arc Deposit. It should be cautioned that the mineral inventory estimates should not be misconstrued as mineral resources.

The Grade Tonnage Report using an Ordinary Kriging Estimate is as follows*.

Area Type Classification Tonnes
Gold (g/t) Contained Gold

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

*Reported at a cut-off of 0.5 g/t Au for open pit and 2.0 g/t Au 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 m by 50 m collar spacing were used to establish the resource. Wireframes were constructed to enclose mineralized zones with composited assays greater than 0.5 g/t Au. The wireframes are therefore grade shells guided by the geology and modeled on vertical sections with closed polygons. Composited lengths of 3 m and 10 m 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 modeled intersecting the 110 zone down-dip, while the other zones are presumed to intersect the 110 zone at some depth below the current model extents. An overall deposit 580 m in strike length and up to 560 m in down-dip length has been defined.

The Golden Saddle Deposit remains open to expansion along strike to the northeast, and down dip 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 g/t Au over 23.38 meters and WD09-103 which intersected 5.07 g/t Au over 25.38 meters. For a complete list of drill hole intercepts and location maps, please visit www.underworldresources.com.

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 NE striking and moderately NW dipping (±50o) tabular bodies of gold mineralization. Comprehensive metallurgical testing indicates that a 92% or better gold recovery can be expected with a conventional plant at Golden Saddle, with 6% to 9% of contained gold reporting to a gravity concentrator prior to cyanidation (previously reported in UW NR # 1, Jan. 5, 2010). 

At Arc, a total of 15 holes at approximately 100 m by 100 m 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 m in thickness and dipping 34o 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 m and extends 230 m down dip, and is still open along strike and down dip.

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 ("SRK") was engaged by Underworld in September 2009 to evaluate the mineral resources for the White Gold Project discovered and identified by drill programmes 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, P.Eng. (APEGBC#16985) a "qualified person" as defined by NI 43-101.

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 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, 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.


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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