Underworld Resources Inc.
TSX VENTURE : UW

Underworld Resources Inc.

October 16, 2008 09:00 ET

Underworld Resources Announces $2.53 Million Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 16, 2008) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Underworld Resources Inc. (the "Company") (TSX VENTURE:UW) is pleased to announce that it has negotiated a private placement with Canaccord Capital Corporation (the "Agent") of up to 4,600,000 flow-through common shares (the "Flow-Through Common Shares") at a price of $0.55 per Flow-Through Common Share for gross proceeds of up to C$2,530,000 (the "Offering"). The Company has also granted the Agent an over allotment option to solicit an additional 1,000,000 Flow-Through Common Shares for gross proceeds of $550,000 exercisable 48 hours prior to closing.

As consideration to the Agent, the Company has agreed to pay a commission of 6% of the total proceeds raised upon closing and issue Agent's warrants ("Agent's Warrants") equal to 6% of the Flow-Through Common Shares issued pursuant to this Offering. Each Agent's Warrant will be exercisable to acquire one common share at $0.55 expiring 24 months after the closing date. In addition, the Agent will be paid a corporate finance fee.

The Company intends to use the net proceeds for exploration of its mineral properties. Expenditures from the Flow-Through Common Shares will constitute Canadian exploration expenses (as defined in the Income Tax Act) and renounced for the 2008 taxation year.

Underworld Resources is a well-structured junior exploration company targeting base and precious metals in the Americas and New Zealand.

ON BEHALF OF THE BOARD OF DIRECTORS

Michael Williams, Chairman & Director

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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