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Underworld Turns its Attention to the Top of the World

When Underworld Resources was formed in 2007, it never meant to be working in Yukon. It was originally formed to carry out mineral exploration in New Zealand, Australia and South America.

Instead, it has ended up searching for gold on the other side of the planet, in Canada’s North. By the end of 2009, it will have spent approximately $14 million over three years on exploration of its promising White Gold and Black Fox gold properties in Yukon. Its results so far have created quite a stir in mining and investment circles, including a staking rush around its property located 95 kilometres south of Dawson City.

“This area originally got our attention when we saw exploration results obtained by prospector Shawn Ryan,” says Underworld President Adrian Fleming. “There were elevated gold values in soil samples from several areas and it looked better than what we had going in the southern hemisphere.”

This was enough to make Underworld shift gears and turn its attention northward, where company leadership already had significant experience. Fleming had worked previously in Nunavut and the Northwest Territories. Underworld Chairman/Director Michael Williams and Director Rob McLeod also run a sister company, Full Metal Minerals, with projects in both Alaska and Yukon.

In 2007, Underworld followed up the work Ryan had done with its own trenching and mapping program. Good gold grades were returned from the trenches. The company’s 2008 drilling programs resulted in two new discoveries in the Golden Saddle and Arc zones.
“Our drilling program has expanded both areas plus we are looking at several other targets as well,” says Fleming.

“We found gold mineralization coming right to the surface and we have good grades. We think our results are beginning to define something that might eventually be a mine, though we are not yet at the point of moving to the pre-feasibility stage.”

The Underworld camp is a busy place, with a population of about 45 workers on average. Fleming comes and goes from his home base in New Zealand and the month of August saw visits from a variety of media and larger mining companies interested in the company’s potential.

Underworld has also staked a lot of new ground. “At the beginning of 2009, our total land holdings were about 160 square kilometers of claims,” says Fleming. “With our aggressive program of staking and optioning other ground around us, our total land package has increased to 500 square kilometers.”

Underworld is not alone in its enthusiasm for staking the area. Its promising results sparked the largest staking rush Yukon has seen in years, with thousands of claims being staked in just a few short months around the Underworld property.

In the midst of all the buzz, Underworld is steadily moving ahead with its own plans. “By the middle of November, we should have our assay results back from the 2009 drilling,” says Fleming.

“We’ll compile our data and come up with a total resource estimate, both internally and through an independent firm. The next step will be to have a preliminary economic evaluation done.”

The evaluation will assess whether Underworld has enough resources to make a viable mining operation or what additional resources must be found. “That’ll tell us whether or not to begin the permitting process,” says Fleming.

“By late March, we should have a better idea of how close or how far away we are to developing a mine. In the meantime, we’ve already begun environmental baseline studies, gathering data required for any future environmental assessments. We’re also beginning to look at potential heritage and archaeological issues that could arise around our plans.”

Underworld has begun community outreach efforts, including meetings with the Tr'ondëk Hwëch'in First Nation and the community of Dawson City. The company also invited First Nation elders to tour its property.

“Not everyone readily welcomes the idea of a new hard rock mine,” says Fleming. “It’s our responsibility to explain what we’re doing and how conscientious we are about any impacts on the social and physical environment. When you’re doing exploration, you have to behave as if you’re working in your neighbour’s back yard. In that case, you wouldn’t chop down trees or dig holes without getting your neighbour’s permission first. You have to ensure your neighbour is happy about what you’re doing, before you do it.”