Underworld puts some solid numbers behind White Gold

Underworld Resources (UW-V) put some solid numbers behind all the speculation that has grown around its White Gold property in the Yukon.

The company announced its first resource estimate on two of the vast property’s deposits: Golden Saddle and Arc.

At Golden Saddles, where Underworld envisages doing both open pit and underground mining, the resource estimate was split accordingly.

Open pit resources were calculated using a 0.5 grams gold per tonne cutoff grade while underground resources used a 2 grams gold per tonne cutoff.

The proposed open pit area currently has 9.6 million tonnes at a substantial average grade of 3.19 grams gold for 990,840 oz in the indicated category and another 4.1 million tonnes grading 2.3 grams gold for 301,820 oz.

The underground portion is currently considerably smaller with just 132,000 tonnes grading 3.23 grams gold for 13,730 oz. of gold in the indicated category and another 918,000 tonnes grading 3.38 grams gold for 99,590 oz. of gold.

The estimate gives Golden Saddles a total indicated resource of 1.004 million oz. and an additional 407,413 oz. of inferred resources.

As for Arc, Underworld only released an inferred resource which came in at 4.3 million tonnes grading 1.21 grams gold for 170,470 oz. All of that resource occurs in an outlined open pit.

Underworld used 81 drill holes from Golden Saddles — drilled using 50 metres by 50 metres collar spacing — to establish the resource.

The company says the zone is still open along strike to the northeast, and down dip to the northwest with the strength of alteration and mineralization increasing to the northeast.

The most northeasterly and deepest holes completed to-date intersected 4.86 grams gold over 23.38 meters and 5.07 grams gold over 25.38 meters.

Mineralization at the zone is hosted within metamorphosed felsic intrusive units, as well as felsic and mafic meta-volcanic rocks, and is associated with quartz veins, stockworks, and breccia zones, and pyrite disseminations.

The ore forms in northeast striking and moderately northwest dipping tabular bodies of gold mineralization.

Metallurgical testing to date indicates that a 92% or better gold recovery can be expected with a conventional plant at the zone.

As for the resource estimate at Arc, Underworld says it was based on 15 holes using 100 metres by 100 metres collar spacing.

Gold mineralization there is hosted within metamorphosed sedimentary rocks in a broad zone ranging from to 10 to 30 metres in thickness and dipping 34 degrees 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 metres and extends 230 metres down dip. Underworld says the deposit is still open along strike and down dip.

With its first resource estimate now in, Underworld will focus its drills on expanding the two deposits, as well as testing several new regional targets within the White Gold District.

Since first releasing the resource estimate on Jan. 19 Underworld shares have fallen 3% and were trading for $1.69 in Toronto on Jan. 26.