Underworld Gets Strong Results At Golden Saddle

VANCOUVER–Long gold intercepts keep rolling in from Underworld Resources’ (UW-V, UNDWF-O) White Gold property in the Yukon, expanding the main mineralized zone along strike and at depth while also proving up potential in several satellite areas.

Underworld recently completed its 25,670-metre 2009 drill program at White Gold, which was designed to expand the known extent of mineralization in all directions at the main zone, Golden Saddle, and at the nearby Arc zone. The program also probed four previously undrilled areas within its large land package.

Efforts at the Golden Saddle have produced three important results. First, the mineralized zone at Golden Saddle is considerably thicker than indicated in last year’s discovery drilling — recent drilling has returned several mineralized intercepts longer than 100 metres. The thickest intercept pulled at Golden Saddle last year was just over 50 metres.

Second, Underworld kept stepping its drills farther along strike to the northeast and the drills continued to hit gold, extending the strike length by at least 250 metres. Drill holes collared downdip also hit gold, stretching the downdip extent by about the same amount.

And third, in the eastern portion of the zone, Underworld is hitting gold hosted in mafic metavolcanics, in contrast to the felsic metaintrusives that host the mineralization elsewhere in the zone. The presence of gold in mafic metavolcanics means areas both east and west of the Golden Saddle now hold potential for gold mineralization. What’s more, the mafic metavolcanics seem to produce thicker mineralized intercepts.

The latest set of results from White Gold backs up all three of these developments. Stepout holes along strike to the northeast and at depth returned long, mineralized intercepts and holes punched into the eastern portion of the deposit produced mineralization hosted in mafic metavolcanics.

Holes 99 and 101, drilled from the same pad, are the most northeasterly holes reported to date. Hole 99 cut 98 metres grading 1.73 grams gold per tonne from 260 metres down-hole and hole 101 returned 93.9 metres averaging 2.1 grams gold from 281 metres. Hole 94, collared roughly 150 metres south, returned 104.6 metres grading 1.01 grams gold from 155 metres depth. And hole 91, an infill hole collared 100 metres southeast of hole 94, cut 91.3 metres grading 3.68 grams gold from 70 metres depth.

Other strong results of late from Golden Saddle include 49.5 metres grading 3.49 grams gold, 112 metres of 1.94 grams gold, 75 metres of 2.68 grams gold, and 10 metres of 8.93 grams gold.

Intrusive-related gold mineralization at Golden Saddle is associated with quartz veins, stockwork and breccia zones, and pyrite veinlettes and disseminations. The main mineralized zone strikes to the northeast, with a gentle to moderate dip to the northwest.

At the Arc zone, which is located about 1 km south of Golden Saddle, recent results include 20 metres grading 1.14 grams gold from 89 metres depth in hole 81 and 6 metres of 8.26 grams gold from 58 metres in hole 84.

One of the satellite areas that Underworld probed this season was Donahue, which sits 3 km southeast of Golden Saddle. Of three holes drilled at Donahue, only one hit gold, but it was a high-grade hit: 21.5 grams gold over 0.7 metre. At South Donahue, which is another 1.5 km southeast, drilling returned multiple quartz vein intersections but none carried significant gold values. Results are pending for two other new areas.

Underworld recently completed its first round of metallurgical test work on rock from White Gold. A set of 23 Golden Saddle samples, taken from six drill holes and averaging 6.6 grams gold, were analyzed via bottle-roll cyanide leach testing and returned an average gold recovery rate of 85.5%. Unoxidized and partially oxidized material returned higher recoveries, averaging 87.7%. Surface oxidation at Golden Saddle extends to between 10 and 40 metres depth. The majority of mineralization encountered to date at Golden Saddle is unoxidized.

Samples from the Arc zone did not respond as well to the bottle-roll cyanide leach test, producing a 51.2% recovery rate. Graphite-poor samples, though, produced an 81.7% recovery, while graphite-rich samples pulled recoveries down to just 4.6%. There are various metallurgical processes available to remove graphite prior to gold recovery.

Underworld is now working through an optimized metallurgical testing program; results are expected before the end of the year.

Underworld has also significantly expanded its land position at White Gold through acquisition and additional staking. In total, the company now holds title to or has title pending on almost 3,000 quartz mining claims covering 589 sq. km, which is twice the size of its initial land package.

Over the last year, Underworld’s share price has risen from a low of 13¢ to a high of $2.64 and the company has taken advantage of the increase, raising almost $23 million in private placements. Kinross Gold (K-T, KGC-N) has taken part in several Underworld placements and now holds 11.1% of the company’s 45 million outstanding shares.

On news of its latest drill results, Underworld shares fell 11¢ to close at $1.60.