QEE Queenstake Resources Ltd

DENVER, Jan. 25 /PRNewswire-FirstCall/ -- Queenstake Resources Ltd. (AMEX:QEE)(TSE:QRL) continued to intercept high grade gold mineralization in its recent near-mine drilling, extending the Mahala deposit at the Smith Mine in and around an access ramp for underground mining. In addition, encouraging drilling results at the drift connecting the SSX and Steer mines has expanded the mineralization in this new prospective area. Drilling results from the SSX-Steer connection included one drill hole intercepting 65 feet of 0.677 ounce of gold per ton (opt) or 19.8 meters of 23 grams per tonne (gpt). Underground drilling in other zones of the recently connected SSX and Steer mines identified additional mineralization. Underground reverse circulation(1) and core(1) drilling was part of the near-mine exploration program(2) conducted at the Smith, SSX and Steer mines from September 2005 through early January 2006. Commenting on the exploration results, President and Chief Executive Officer Dorian L. (Dusty) Nicol said, "The positive results from the Mahala deposit at the Smith Mine have expanded the mineralization, especially around the access ramp at Mahala, potentially allowing easier recovery of the mineralization. Pending incorporation of these results into a new mine model, the results reinforce the potential to extend the mine life at Smith beyond 2008. Turning to the SSX-Steer connection, this is exciting new ground for further drilling this year and we have ordered a second drill for the SSX-Steer complex to enable us to accelerate this program." All results highlighted in this news release are outside of the year-end 2004 resource boundary and represent extensions of mineralization, which could add to reserves and resources(3). The results will be incorporated in new mine models that will be used in the estimation of reserves and resources for year-end 2005. The Mahala results were from 76 reverse circulation and core holes totaling 17,005 feet or 5,183 meters completed. The Mahala deposit, part of the Smith Mine, commenced commercial production in August 2005. At the 6630 Ramp at Mahala, three reverse circulation holes had intercepts of 55 feet of 0.354 opt (16.8 meters of 12 gpt), 35 feet of 0.264 opt (10.7 meters of 9 gpt) and 10 feet of 0.351 opt (3.1 meters of 12 gpt), respectively. The prospective target in Zone 2 at the Smith Mine is in mineralization associated with two parallel dikes. This target remains open to the west. Follow up drilling to expand the mineralization at Mahala and along Zone 2 to the west is underway in 2006. The following table shows drill intercepts at the Smith Mine of 10 feet or more at a grade of 0.25 opt or higher (>3 meters of approximately 9 gpt or better). The dike trends and Mahala ramps are shown in Map 1 in the Appendix. Table 1: Smith Mine-Mahala Deposit Results Highlights(4, 5) Hole # From To Length Grade Drill (feet) (feet) (feet) (opt) Type Zone 4 - Mahala 6630 Ramp C40173 45 90 45 0.279 RC C40168 0 25 25 0.301 RC and 50 105 55 0.354 C40169 5 40 35 0.264 RC C40165 40 60 20 0.292 RC C40175 20 45 25 0.292 RC C40184 0 15 15 0.292 RC C40218 240 250 10 0.351 RC Zone 4 - 6760 C40221 0 20 20 0.290 RC C40228 110 130 20 0.298 RC C40230 10 30 20 0.342 RC C40234 95 105 10 0.526 RC C40249 105 125 20 0.265 RC C40279 170 180 10 0.320 RC C40283 70 85 15 0.430 RC R4 and R11 Dike Trends LX-619 0 15 15 0.311 Core LX-620 0 20 20 0.325 Core LX-623 155 185 30 0.537 Core At the SSX-Steer complex, 242 reverse circulation and core holes totaling 24,420 feet or 7,443 meters were completed. Three reverse circulation holes in Zone 5 of the SSX-Steer drift connection encountered high-grade mineralized intervals of 65 feet of 0.677 opt (19.8 meters of 23) as mentioned on page one, 45 feet of 0.368 opt (13.7 meters of 13 gpt) and 10 feet of 0.559 opt (3.1 meters of 19 gpt), respectively. Other highlighted results from SSX and Steer are shown in Map 2 in the Appendix. All of these areas will be followed up with further drilling in 2006. The following table shows drill intercepts from the SSX and Steer mines of 10 feet or more at a grade of 0.25 opt or higher (>3.1 meters of 9 gpt or better). Table 2: SSX-Steer Complex Results Highlights(4, 5) SSX-Steer Hole # From To Length Grade Drill (feet) (feet) (feet) (opt) Type Zone 1 (SSX) Z13277 20 110 90 0.349 RC and 115 180 65 0.598 and 195 205 10 0.332 Z13287 210 235 25 0.864 RC Z13288 50 70 20 0.443 RC Z13289 35 55 20 0.360 RC Z13290 50 65 15 0.419 RC Zone 2 (SSX) Z23305 0 25 25 0.412 RC Z23313 30 40 10 0.352 RC Z23314 0 35 35 0.272 RC Z23323 0 15 15 0.288 RC and 55 70 15 0.698 Z23342 0 15 15 0.607 RC Z23343 0 10 10 0.318 RC Z23346 0 45 45 0.307 RC with 35 45 10 0.508 Z23350 0 30 30 0.476 RC with 10 20 20 0.616 Z23356 0 15 15 0.259 RC Zone 4 (SSX) Z41062 10 35 25 0.273 RC Z41066 30 40 10 0.248 RC Z41069 20 40 20 0.511 RC Z41070 10 45 35 0.457 RC Z41073 5 20 15 0.275 RC Z41083 35 80 45 0.586 RC Z41085 0 15 15 0.532 RC Z41086 0 30 30 0.462 RC Z41089 0 75 75 0.286 RC Z41093 0 15 15 0.253 RC Z41094 0 30 30 0.234 RC and 55 65 10 0.475 Z41097 0 30 30 0.285 RC Z41103 35 55 20 0.323 RC Z41115 20 50 30 0.252 RC Z41122 85 95 10 0.318 RC Z41125 25 45 20 0.425 RC Z41131 5 25 20 0.356 RC Z41132 10 45 35 0.438 RC Z41139 0 20 20 0.305 RC Z41148 100 110 10 0.432 RC Z41153 90 100 10 0.417 RC and 120 130 10 0.587 Z41163 0 15 15 0.292 RC Zone 5 (SSX-Steer connection) Z50544 110 130 20 0.291 RC Z50550 105 115 10 0.559 RC and 125 170 45 0.232 Z50561 0 20 20 0.255 RC Z50563 0 10 10 0.252 RC Z50564 0 45 45 0.368 RC Z50565 0 10 10 0.318 RC Z50567 35 45 10 0.375 RC Z50592 70 95 25 0.399 RC Z50593 70 135 65 0.677 RC Z50601 125 135 10 0.439 RC Z50612 250 270 20 0.339 RC Z50618 50 65 15 0.950 RC Z50622 60 70 10 0.389 RC and 185 205 20 0.866 SX-980 433 455 22 0.639 Core Zone 6 (SSX) Z60343 10 25 15 0.295 RC Z60344 0 35 35 0.259 RC Zone 7 (Steer) X70006 50 60 10 0.302 RC X70015 25 50 25 0.345 RC X70016 18.5 6.5 25 0.392 RC X70033 10 25 15 0.389 RC X70034 0 10 10 0.495 RC Queenstake Resources Ltd. is a gold mining and exploration company based in Denver, Colorado. Its principal asset is the wholly owned Jerritt Canyon mining district in Nevada. Jerritt Canyon has produced over seven million ounces of gold since 1981. Current production at the property is from underground mines. The Jerritt Canyon district comprises over 100 square miles of geologically prospective ground and represents one of the largest contiguous exploration properties in Nevada. Notes: (1) Underground drilling uses either core or reverse circulation (RC) methods for near-mine exploration programs at Jerritt Canyon. Reverse circulation drilling has demonstrated accuracy in ore control definition drilling and for resource conversion at Jerritt Canyon's mines. However, reverse circulation drilling can result in a lower degree of confidence and less geologic information than core drilling. (2) A complete data set, from which the drill results highlighted in this news release were derived, is available as an Appendix to this news release under the Investor Information/News section on the Company's website, http://www.queenstake.com/. (3) "Resources" or "resource" used in this news release are as defined in National Instrument 43-101 of the Canadian Securities Administrators and are not terms recognized or defined by the U.S. Securities and Exchange Commission (SEC). Mineral resources are not reserves and do not have demonstrated economic viability. For further information, please refer to the risk factors and definitions of reserves and resources in the Company's filings on SEDAR and with the SEC on the Company's website, http://www.queenstake.com/. The Qualified Person for the technical information contained in this news release is Mr. Dorian L. (Dusty) Nicol, President and Chief Executive Officer of Queenstake. (4) Results presented in this news release were analyzed using standard fire assay techniques at the Company's Jerritt Canyon laboratory. Intercepts are reported as drilled and are not necessarily "true widths," which have not yet been calculated. (5) A description of the geology, sampling procedures and the Company's laboratory Quality Assurance/Quality Control procedures are described in the Company's National Instrument 43-101 Technical Report filed on Sedar on February 23, 2005. This report is available under Investor Information/Financial Information/Sedar Filings at http://www.queenstake.com/. For further information call: Wendy Yang, 303-297-1557 ext. 105 800-276-6070 Email - Web - http://www.queenstake.com/ Cautionary Statement -- This news release contains "Forward-Looking Statements" within the meaning of applicable Canadian securities regulations and Section 21E of the United States Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in this release, and Queenstake's future plans are forward-looking statements that involve various risks and uncertainties. Such forward-looking statements include, without limitation, (i) estimates and projections of reserves and resources, (ii) estimates and opinions regarding geologic and mineralization interpretation and (iii) estimates of exploration investment and scope of exploration programs. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements, in particular the estimates do not include input cost increases that could occur in the future. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and Queenstake does not undertake any obligation to update forward-looking statements should conditions or management's estimates or opinions change. Forward-looking statements are subject to risks, uncertainties and other factors, including gold and other commodity price volatility, political and operational risks, which are described in the Company's 2004 Annual Information Form filed on SEDAR and 2004 Annual Report on Form 40-F on file with the Securities and Exchange Commission as well as the Company's other regulatory filings. APPENDIX Map 1: Smith Mine - Mahala Deposit (Photo: http://www.newscom.com/cgi-bin/prnh/20060125/LAW011-a) Map 2: Steer-SSX Complex (Photo: http://www.newscom.com/cgi-bin/prnh/20060125/LAW011-b) http://www.newscom.com/cgi-bin/prnh/20060125/LAW011-a http://www.newscom.com/cgi-bin/prnh/20060125/LAW011-b http://photoarchive.ap.org/ DATASOURCE: Queenstake Resources Ltd. CONTACT: Wendy Yang of Queenstake Resources Ltd., +1-303-297-1557, ext. 105, or +1-800-276-6070, Web site: http://www.queenstake.com/

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