Discovering Yukon’s Underworld (October 27, 2008)

Underworld Resources (UW-V, UNDWF-o) recently released promising results from three drill holes at its White Gold property, in the Yukon.

The best of the recently assayed holes was hole 21, from the Golden Saddle zone at the property. It returned the thickest intercept to date for Underworld with 3.1 grams gold per tonne over 50.7 metres from a depth of 96 metres.

The hole is the northernmost intercept at the property and was drilled as an 80-metre stepout northeast of a previous hole that returned 3.4 grams gold over 14.2 metres.

A second hole, WD-20, was collared in gold mineralization at surface and returned 1.87 grams gold over 27.7 metres. That hole sits 100 metres east of a previous hole that returned 4.2 grams gold over 16 metres.

At the second zone being drilled, the Arc zone, hole WD-17 returned 1.47 grams gold over 29 metres from 100 metres.

The hole is the second to hit mineralization at the zone, with the previous hole returning 1.18 grams gold over 28.5 metres from surface.

Underworld describes Golden Saddle and Arc as two separate, shallowly dipping, near-surface, gold-mineralized zones with significant strike lengths that may be amenable to open-pit mining. Both zones are open in multiple directions.

The company compares the style of mineralization — shallowly dipping breccia and quartz veins — to Teck’s (TCK. B-T, TCK-n) Pogo gold mine in Alaska.

The two zones lie in the same belt as Pogo, the Tintina gold belt, which stretches eastward out of central Alaska into the Yukon.

Underworld’s White Gold property covers roughly 47 sq. km and is about 95 km south of Dawson City. A road passed within 30 km of the site, which is accessible by commercial river barge from Dawson along the Yukon River.

Vancouver-based Underworld has already finished its first phase of drilling at White Gold — a total of 3,431 metres in 27 holes — and phase two began in August. Thus far, 2,188 metres have been drilled with assays from six other holes pending.

News of the intervals was released on a tough day for the markets and as a result, Underworld’s shares fell 8% or 5 to 55 on roughly 42,000 shares traded. The company has just over 11 million shares outstanding and its share price has moved between $1.30 and 44 over the last 52 weeks.