EXPLORATION 1999 – MEXICAN ROUNDUP — Drilling dry at Guinoloza

Preliminary drilling by 60-40 partners Queenstake Resources (QTR-T) and Alamos Minerals (AAS-V) failed to intersect significant mineralization at the Guinoloza property in Chihuahua state, Mexico.

Eight reverse-circulation holes totalling 800 metres tested geophysical and coincident surface geochemical anomalies in altered Tertiary-aged volcanic and sedimentary rocks. Both rock types are considered similar to those hosting the nearby El Sauzal gold deposit of Francisco Gold (FGX-V), where 50.6 million tonnes averaging 2.21 grams gold per tonne have been outlined.

All but one hole passed through up to 40 metres of semi-massive-to-massive silica and bottomed in weakly altered Cretaceous andesite. Anomalous values of lead, zinc, barium and arsenic were detected in most drill cuttings, especially those from the siliceous zones. Gold and silver concentrations, however, generally fell below detection limits (the highest gold value being 0.2 gram per tonne).

The partners believe the silica zones formed along the unconformable contact between the Tertiary and Cretaceous rocks and represent a distal facies of a skarn system.