Queenstake Resources Ltd.
TSX : QRL
AMEX : QEE

Queenstake Resources Ltd.

May 31, 2005 09:01 ET

Queenstake Continues to Find High-Grade Gold Mineralization at Jerritt Canyon

DENVER, COLORADO--(CCNMatthews - May 31, 2005) - Queenstake Resources Ltd. (TSX:QRL)(AMEX:QEE) continues to intersect new high-grade gold mineralization with underground exploration at the SSX, Smith, Murray, and Steer Mines at Jerritt Canyon in northeastern Nevada. All results contained in this release are outside the measured and indicated resource estimate as at the end of December, 2004, and therefore represent incremental additions to mineralization at Jerritt Canyon. Queenstake's press release dated February 7, 2005 contains details on the December 2004 reserve and resource estimates.

Queenstake's underground exploration and resource conversion program is in progress at all four mines at Jerritt Canyon. Three contract underground core drills and one contract underground reverse circulation (RC) drill as well as two company-owned RC underground drills are involved in the program. The drilling is designed to explore for new mineral resources and to convert resources to reserves.

Dorian (Dusty) Nicol, Queenstake's President and Chief Executive Officer, said, "We continue to have success with our underground exploration program at Jerritt Canyon's operating mines. The results of the Murray drilling indicate the likelihood that Zone 7 will continue to grow as well as to increase in grade. The ore pods at Steer continue to grow steadily, as they have since we began drilling them from underground last year. Some of our highest grades in drill intercepts are from the Smith Mine. I am also pleased to announce that on May 25th we began drilling the pilot hole for the raise which will provide a secondary escape way and ventilation, allowing full-scale commercial production to begin from the Mahala portion of the Smith Mine in mid-August. Mineralization at the SSX Mine continues to expand; as development progresses toward the Steer Mine, much of the recently discovered mineralization will become accessible for mining. The connection between the SSX and Steer mines is expected to be completed by mid-August."

Murray Mine

Zone 7 at the Murray Mine was added to probable reserves at the end of 2004 with an estimated 43,400 tons at a grade of 0.266 ounces of gold per ton (opt), containing 11,500 ounces of gold. The estimated measured and indicated resource, including reserves, is 112,900 tons at 0.243 opt, containing 27,400 ounces of gold. An underground drill program of 4,940 feet of RC drilling in twenty-six holes and 3,976 feet of core drilling in fifteen holes was carried out in March and April this year. Assays have been received for all of the holes. The table below lists intercepts with an average grade greater than 0.250 opt over 10 or more feet and that are outside the measured and indicated resource envelope.



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Az Dip Total Inte-
Hole (deg- (deg- Depth From To rval Grade Drill
# rees) rees) (feet) (feet) (feet) (feet) (opt) Zone Type
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C70004 344 -14 100 80 90 10 0.268 Zone 7 UG-RC
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C70005 3 22 220 60 105 45 0.369 Zone 7 UG-RC
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and 3 22 220 160 180 20 0.274 Zone 7 UG-RC
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C70006 359 13 210 45 90 45 0.330 Zone 7 UG-RC
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and 359 13 210 110 145 35 0.381 Zone 7 UG-RC
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C70007 359 6 195 35 65 30 0.254 Zone 7 UG-RC
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C70009 356 -10 125 60 80 20 0.322 Zone 7 UG-RC
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C70010 3 23 245 65 100 35 0.409 Zone 7 UG-RC
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and 3 23 245 135 190 55 0.288 Zone 7 UG-RC
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C70011 3 17 235 60 95 35 0.277 Zone 7 UG-RC
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C70012 3 9 150 35 105 70 0.330 Zone 7 UG-RC
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C70016 2 13 300 60 85 25 0.457 Zone 7 UG-RC
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C70017 1 -12 160 60 75 15 0.320 Zone 7 UG-RC
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C70018 5 -4 200 35 50 15 0.271 Zone 7 UG-RC
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C70019 3 8 260 40 90 50 0.322 Zone 7 UG-RC
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C70021 19 39 300 115 200 85 0.390 Zone 7 UG-RC
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C70022 19 28 300 70 110 40 0.408 Zone 7 UG-RC
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C70023 19 19 300 40 50 10 0.428 Zone 7 UG-RC
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C70024 19 -2 180 40 60 20 0.261 Zone 7 UG-RC
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NC-088 322 13 230 100 110 10 0.257 Zone 7 UG-Core
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NC-091 341 9 210 115 133 18 0.376 Zone 7 UG-Core
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NC-092 342 20 180 85 105 20 0.258 Zone 7 UG-Core
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and 140 170 30 0.451 Zone 7 UG-Core
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NC-093 17 22 260 70 80 10 0.650 Zone 7 UG-Core
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and 200 250 50 0.302 Zone 7 UG-Core
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Steer Mine

At the Steer Mine, the connection between the mine and the SSX Mine is scheduled to be completed mid-August 2005. The 1,800 foot production drift connecting the two mines will provide a secondary escapeway and ventilation and will allow full-scale commercial production to begin from Steer. The underground drilling program is progressing simultaneously with development of the Steer orebody. The proven and probable reserve at the end of December 2004 was estimated at 342,100 tons at a grade of 0.279 opt (95,300 contained ounces of gold); Steer's indicated and measured resource (including the reserve) at the end of 2004 was estimated at 522,700 tons at 0.282 opt containing 147,400 ounces of gold. The additional inferred resource is estimated at 379,000 tons at 0.262 opt. Thirty-four RC drill holes totaling 8,205 feet and two core holes totaling 495 feet were drilled from March 18 through May 15, 2005. The table below lists intercepts with an average grade greater than 0.250 opt over 10 or more feet and that are outside the measured and indicated resource envelope.



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Az Dip Total
Hole (deg- (deg- Depth From To Length Grade Drill
# rees) rees) (feet) (feet) (feet) (feet) (opt) Zone Type
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S10296 97 15 275 30 95 65 0.399 Block 1 UG-RC
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S10312 142 -15 220 105 125 20 0.430 Block 1 UG-RC
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S10314 142 1 225 0 15 15 0.293 Block 1 UG-RC
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S10315 142 9 225 10 25 15 0.251 Block 1 UG-RC
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S10316 142 20 130 95 110 15 0.427 Block 1 UG-RC
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S10317 99 -1 300 0 55 55 0.257 Block 1 UG-RC
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S10318 99 4 300 15 55 40 0.304 Block 1 UG-RC
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S10319 99 10 300 25 50 25 0.445 Block 1 UG-RC
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S30036 122 -10 300 80 175 95 0.270 Block 3 UG-RC
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S30043 129 22 265 90 160 70 0.363 Block 3 UG-RC
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S30047 136 -5 280 145 260 115 0.613 Block 3 UG-RC
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S30048 136 11 300 130 175 45 0.373 Block 3 UG-RC
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SR-37 277 6 405 140 155 15 0.295 Block 1 UG-RC
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SSX Mine

At the SSX Mine, thirty-seven RC holes totaling 4,410 feet and five core holes totaling 2,593 feet were drilled from April 1 through May 17, 2005. Assays have been received for all but one of these holes. Drilling was concentrated in Zone 5 along the drift connecting the mine to Steer, and in Zone 2. The December 2004 proven and probable reserve estimate at SSX was 1,561,400 tons at 0.258 opt, containing 402,200 ounces of gold. The entire measured and indicated resource, including reserves, was estimated at 2,945,700 tons at 0.288 opt, containing 849,100 ounces of gold. There is an additional inferred resource estimated at 943,000 tons at 0.242 opt, containing 228,100 ounces of gold. Most of the non-reserve resource is located in Zone 5 which is becoming accessible for underground exploration and resource conversion drilling as development continues toward Steer. Intercepts outside the measured and indicated envelope that are greater than 0.250 opt over 10 or more feet are listed below.



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Az Dip Total
Hole (deg- (deg- Depth From To Length Grade Drill
# rees) rees) (feet) (feet) (feet) (feet) (opt) Zone Type
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S10072 180 -60 100 45 55 10 0.254 1 UG-RC
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S20134 36 -85 90 30 65 35 0.418 2 UG-RC
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Z23200 25 -60 60 5 20 15 0.382 2 UG-RC
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Z23201 25 -78 60 5 30 25 0.416 2 UG-RC
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Z23215 350 -75 90 0 10 10 0.280 2 UG-RC
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Z23227 0 -90 100 0 25 25 0.297 2 UG-RC
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Z23228 0 -90 100 30 40 10 0.302 2 UG-RC
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Z50391 235 5 180 115 130 15 0.278 5 UG-RC
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Z50399 210 -30 110 30 40 10 0.379 5 UG-RC
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SX-929 22 3 480 352 395 43 0.416 5 UG-Core
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and 22 3 480 424 440 16 0.351 5 UG-Core
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SX-931 22 -7 480 405 420 15 0.271 5 UG-Core
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Smith Mine

At the Smith Mine, seventy-one RC holes were drilled from underground, totaling 9,525 feet. Drilling was concentrated in Zone 3, following high grade structures that have been the chief source of ore in the main Smith Mine. The December 2004 proven and probable reserve was estimated at 524,100 tons at 0.316 opt (165,800 ounces of gold) within a total estimated measured and indicated resource of 1,423,800 tons at 0.288, containing 409,700 ounces of gold. Development of the Mahala orebody, a part of the Smith reserve and resource, is providing additional drill stations for exploration and resource conversion. Additional drilling is also planned for Zone 5, the B-Pit area, which is also a part of the Smith reserve and resource. Intercepts that are outside the measured and indicated envelope and greater than 0.250 opt over 10 or more feet are listed below.



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Az Dip Total
Hole (deg- (deg- Depth From To Length Grade Drill
# rees) rees) (feet) (feet) (feet) (feet) (opt) Zone Type
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C30255 106 -20 190 125 140 15 0.555 Zone 3 UG-RC
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C30259 86 -18 275 175 195 20 0.360 Zone 3 UG-RC
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C30262 106 -43 190 155 165 10 0.621 Zone 3 UG-RC
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C30263 81 -15 235 130 155 25 0.261 Zone 3 UG-RC
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C30265 219 20 155 30 60 30 0.369 Zone 3 UG-RC
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C30266 218 5 150 120 135 15 0.270 Zone 3 UG-RC
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C30267 219 -8 150 105 120 15 0.354 Zone 3 UG-RC
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C30268 212 15 175 115 135 20 0.260 Zone 3 UG-RC
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C30269 212 -5 175 20 50 30 0.748 Zone 3 UG-RC
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and 212 -5 175 120 140 20 0.289 Zone 3 UG-RC
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C30271 210 15 160 85 110 25 0.320 Zone 3 UG-RC
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C30272 210 0 130 100 115 15 0.590 Zone 3 UG-RC
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C30274 210 -35 175 100 115 15 0.926 Zone 3 UG-RC
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C30277 211 -10 160 120 135 15 0.835 Zone 3 UG-RC
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C30290 145 15 150 15 70 55 0.378 Zone 3 UG-RC
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C30293 145 -90 50 5 25 20 0.324 Zone 3 UG-RC
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C30301 223 -45 75 10 30 20 0.311 Zone 3 UG-RC
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C30319 145 30 100 0 60 60 0.258 Zone 3 UG-RC
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C30320 145 15 100 5 65 60 0.254 Zone 3 UG-RC
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C30321 145 0 100 15 30 15 0.312 Zone 3 UG-RC
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C30324 145 30 100 15 25 10 0.405 Zone 3 UG-RC
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Notes:

1. A complete set of the data from which the highlighted drill results were selected, as well as maps showing mine and prospect locations, are available on the Company's website, http://www.queenstake.com.

2. A description of the geology, sampling procedures, and the Company's laboratory Quality Assurance /Quality Control procedures are as described in the Company's National Instrument 43-101 Technical Report filed on Sedar on February 23, 2005. This report is available on the Company's website, http://www.queenstake.com.

3. Samples from underground drilling are analyzed at the Jerritt Canyon laboratory. All samples are analyzed using standard fire assay techniques.

4. The Qualified Person for the release of this exploration information is Mr. Dorian (Dusty) Nicol, Queenstake's President and Chief Executive Officer.

5. Intercepts are reported as drilled; true widths have not yet been calculated.

Queenstake Resources Ltd. is a gold mining and exploration company based in Denver, Colorado. Its principal asset is the Jerritt Canyon District in Nevada, acquired in June 2003. The Jerritt Canyon District consists of four underground mines, a 1.5 million ton per year capacity processing facility and a 100 square mile land package that represents some of the most exciting gold exploration ground in Nevada. Jerritt Canyon has produced more than 7,000,000 ounces of gold since 1981.

Forward-Looking Statements - This news release contains "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in this release, and Queenstake's future plans are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and Queenstake does not undertake any obligation to update forward-looking statements should conditions or management's estimates or opinions change.

SEC file number 0-24096


The Toronto Stock Exchange has neither reviewed nor accepts responsibility for the adequacy or accuracy of this release.

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