Queenstake Resources Ltd. is an emerging gold producer managed by a team with many years experience in developing projects from early stage exploration to project development and production. Gold production began in September 2002 on its Magistral Gold Project, Sinaloa, Mexico.


 Queenstake Resources Ltd.   QRL   (TSX)

To facilitate the business combination of the Company and Santa Cruz Gold Inc. ("Santa Cruz") on June 24, 1999 the Company's shareholders passed a special resolution authorizing the continuance of the Company from the Company Act (British Columbia), R.S.B.C. 1996, as amended to Business Corporations Act (Yukon), R.S.Y. 1996, c.15, as amended.

On that same day the shareholders of Santa Cruz passed a special resolution authorizing the continuance of Santa Cruz from the Business Corporations Act (Ontario), R.S.O. 1990, c.B.16, as amended to Business Corporations Act (Yukon), R.S.Y. 1996, c.15, as amended ("YBCA").

Effective July 19, 1999 the Company merged with Santa Cruz, a gold exploration and development company (former Commission File No. 0-29088), through an amalgamation by way of statutory arrangement under the YBCA as one company with the name "Queenstake Resources Ltd.". The Queenstake common shares were exchanged on the basis of 0.4993 of one "new" Queenstake share for every one Queenstake common share held and the Santa Cruz common shares were exchanged for "new" Queenstake common share on the basis of 0.1035 of one "new" Queenstake share for each one Santa Cruz common share held.

On July 22, 1999 the merged company began trading on the TSE under the name of Queenstake Resources Ltd. symbol QRL (formerly QTR).

The Directors and Officers of the amalgamated Company are as follows:

James Mancuso: non-executive Chairman and Director
Christopher Davie: President, Chief Executive Officer and Director
Dorian (Dusty) Nicol: Vice President Exploration and Director
Gordon Gutrath: Director
Hugh Mogensen: Director
Chris Serin: Director
Grant Edey: Director
Doris Meyer: Chief Financial Officer and Corporate Secretary

Magistral Operations Underway For the past two weeks Queenstake Resources Ltd. (QRL-TSX), the operator of the Magistral Joint Venture, has been stacking ore on the leach pad at its newly completed Magistral gold mine in Sinaloa, Mexico. To date, some 20,000 tonnes of crushed ore has been placed on the pad and leaching will commence over the next few days. The gold will be recovered, from the pregnant leach solution, in the adsorption and stripping circuits, which will be started up over the coming weeks.

Production is expected to gradually increase over the following months to the anticipated annual production rate of approximately 40,000 ounces of gold per year. Mine life is expected to be 8 years and gold recovery from the ore, over its 240 day leach cycle, is expected to be 73%. The proven and probable reserve base for the Magistral mine is 6,980,000 tonnes containing 465,100 ounces at an average grade of 2.07 grams of gold per tonne. The feasibility study forecast an estimated life of mine operating cost per ounce to be US$180 but the Magistral Joint Venture expects this to be reduced due to the high-grade nature of recently discovered additional reserves (NR02-06 June 4, 2002).

Press Release 12Sep02

October 30, 2001 commenced development of its Magistral project in Sinaloa Mexico. Currently, permitting and detailed engineering activities are in hand which should lead to a production decision being made in the first quarter of 2002. In addition, the Company began a reverse circulation drill program during October. This program is designed to test for the presence of high grade ore shoots within the La Prieta structure. The 16 hole, 2,600 meter program is testing down dip extensions of the structure over a strike length of 125 meters. The La Prieta structure is the host of a substantial part of the existing resource and reserve in the Samaniego Hill area of Magistral. Assay results will be announced when all assays have been received and plotted, which is expected before the end of November. Queenstake announced on September 4th, 2001 (NR01-4) that it entered into two agreements which together provide the financing and equipment required to place Magistral into production. The current development and drilling activities are being conducted under those agreements. As previously reported, the feasibility study on Magistral, prepared by Kappes Cassiday and Associates of Reno and Pincock Allen and Holt of Denver, defined a mineable reserve of 6.15 million tonnes at a grade of 1.86 grams of gold per tonne at a gold price of US$300 per ounce. The ore would be mined from four discrete pits known as San Rafael, Samaniego Hill, Sagrado Corazon and Lupita. The average waste to ore stripping ratio in the pits would be 5.6:1. Tailings from previous operations in the Samaniego area will also be mined and retreated. Production from the currently known reserve will total 268,500 ounces of gold over seven years. Operating costs were projected in the feasibility study to be US$180 per ounce over the life of the mine. Potential exists for the discovery of additional resources both in the immediate area of the existing defined pits and in other as yet undrilled structures. The current drilling addresses the potential in the area of the Samaniego pit; the district scale exploration potential will be tested during mining operations in the upcoming years.

September 4, 2001: Queenstake reached agreement with Campbell Resources to acquire 100% interest in all of Campbell's Mexican assets including all shares of its' Mexican subsidiary Oro de Sotula, S.A. de C.V. to Queenstake Resources. This includes the Santa Gertrudis mine in northern Sonora that has been on a care and maintenance basis since 2000. Reserves (resources) are still in the ground at Santa Gertrudis awaiting a rise in  gold prices. Equipment prresently at Santa Gertrudis can be used to bring Magistral into production.

The amalgamated Company also has the following assets:

- The Magistral Project in Mexico, a thoroughly drill tested, potentially low cost gold deposit that is currently the subject of a resource study that will form part of a feasibility study

- Exploration properties in Peru, Mexico (see below), Chile, Belize and Southern Africa

- Joint venture agreements with major companies on exploration properties in Peru and
Southern Africa

Santa Cruz Gold Inc. had 5 active projects in Mexico as of year-end 1998:

Magistral Gold Project, Sinaloa: A 1,300 ha property located 28 km N of Mocorito, Sinaloa. Magistral will be the primary focus of Queenstake's activities in 1999-2001. As of 12Oct99 a bankable feasibility study has been commissioned from Kappes Cassiday and Assoc and PAH. at an estimated cost of $540,000. This study was completed by early 2000 and by September 2001 development financing was secured. . Queenstake Resources has reported reserve and economic estimates for the Magistral gold project in Mexico. Total proven and probable reserves for the San Rafael, Samaniego Hill, Sagrado Corazon, Lupita, and Tailings areas were 6,174,000 tonnes grading 1.87 g/t gold, containing 370,500 ounces at a strip ratio of 5.4. The project life was seven years, the preproduction capital cost was US$13.4 million, additional capital costs were US$5.99 million, cash costs were US$177/ounce, overall gold recovery was estimated at 71.7%, and the breakeven gold price was estimated at US$254/ounce. Midwest, a private Delaware corporation will provide $6,125,000 in financing and receive 50% of the development joint venture. Current projections are that project would generate a positive cahs flow with gold prices as low as $260/oz.

Press Release 4Sep01
Press Release 6Apr00

Engineering and permitting studies were initially started with the intention to begin initial mine construction in 3Q97 with actual production expected in Dec'97. (Because of a change of market conditions this obviously did not come to pass). Pre-feasibility study by Scotia Corp. focused on San Rafael deposit. Inferred resource reported between 560,000 and 1.35 million oz Au. Published total Proven and Probable reserves are listed at 782,800 ounces. Tests show it leaches well with recoveries over 80% at -1/4". Five large, steeply dipping shear zones 10-40m wide including Samaniego Hill, San Rafael, Sagrado Corazon-Lupita, Magistral and El Venado. Independent audit by Behre Dolbear & Co. Ltd. recently estimated that property hosts a resource of 28 M tonnes at 1.5 grams Au (0.044 opt) with San Rafael hosting 20% of total resource of 1.35 million ounces. During 1996 40,000m + of drilling on San Rafael and Samaniego Hill was completed. Proven and probable in the San Rafael deposit alone are 6M tonnes at 1.59 gpt Au (389,000 oz). Three additional zones identified through trenching: Dos Amigos, Lucy-Los Cerritos and Culebra. Recent trenching has identified new mineralized structure 300m N of Samaniego Hill in the area known as Dos Amigos. Construction initially planned for 3Q97

Completed a $6,800,000 financing with Repadre Capital Corp. to advance Magistral Gold Project.

Press Release 12Oct99
MBD January, 1999
Canadian Corporate News 2Jun97
MBD July, 1997
Literature at PDAC, Mar. 1997
LAMR Feb. Apr.,1997
MBD February, 1997
LAMR December, 1996
NMN v82 #40 12/02/96
NMN 11/11/96
LAMR Nov, Oct, Aug, Apr, May, 1996
NMN v82#28 09/09/96
MBD Aug, Jul, Jun, Apr 1996

Lluvia de Oro, Sonora. An OP/HL gold mine near Magdalena de Kino. Santa Cruz announced 4/9/99 that it has entered into an agreement to sell the Lluvia de Oro Gold Mine (to an un-named party) for a cash consideration of $120,000 and the assumption of certain liabilities. Expanded proven and probable reserves of 4.6 MM tonnes of 0.024 opt Au (120,000 oz) with an additional 4.0 MM tonnes at 0.028 opt in a resource catagory. Mining operations ceased at Lluvia de Oro on 19Jun98 due to depressed metals prices. The mine was shifted to a care and maintenance mode. A settlement with an un-paid contractor, D.H. Blattner & Sons, Inc. has been worked out. (Note this asset was acquired along with the Palmarito Priject in Sinaloa from Great Lakes Minerals Inc. via merger with Newmex)

Press Release 9Apr99
MBD January, 1999
Press Release 9Dec98
MBD October, 1997

Palmarito Au-Ag property, Sinaloa Pre-feasibility study continues and presently shows 3.4 M tonnes 141 gm Ag, 0.54 gm Au (0016 opt Au and 4.1 opt Ag) and another 6000 oz Au in 250,000 tonnes of dumps and tailings.Lyntek Inc,. doing metallurgical testwork. In-fill drilling planned in 2Q97.

LAMR January, 1997

Sindrome de Piedra, Jalisco. Signed an agreement to earn 100% of an OP/HL exploration target hosted in a shear zone.

MBD October, 1997

Quitovac, Sonora: Land package consists of 600 ha. on 12 titled concessions. Two Phase RC program planned to prove in-situ resource previously estimated by Penoles to be 7.5 M tonnes at 1.4 gpt through a 63 hole RC program of 6,700m conducted 1988-1990. Phase one 20-hole program completed with excellent results with several holes showing grades up to multiple grams over 20m or more at depths less than 100m. Highlights are 35m of 6.5 gpt and 27m of 5.1 gpt. on the easternmost section. Inferred geologic resource of 300,000 oz. Past production estimated at 150,000 oz. Plans are to advance through pre-feasibility in 1997 and open mine in 1998.

Literature at PDAC, Mar. 1997
NMN 03/10/97
News release 25Feb97
Corporate Brochure

El Escobal, Sinaloa: A former underground Au producer located 19 km NNE of Culiacan which last operated in the mid-1960's on 5 levels to depths of 150m. Santa Cruz has drilled 28 angle holes collared of a 50m by 25m spaced grid. Many have intersected greater than 10m over 1 gram Au at various depths between 79-159 downhole. Hole 26 intersected 2 grams Au over 46m and Hole 25 intersected 3.5 grams over 32m. Second phase of drilling has been approved.

LAMR Nov, Aug, 1996
NMN 11/11/96
NMN v82#28 09/09/96
MBD Nov, Sep, Aug, Jul, Jun, Apr 1996

Queenstake Resources Ltd. past projects in Mexico as of year-end 1998:

Owns 60% interest in Cia. Minera Vulcan S.A. de C.V. a Mexican corporation which is a 60/40 participating JV between Queenstake Resources and Alamos Minerals. Queenstake is the operator. Owns 100% of International Resources Inc. (IRI). Minera Vulcan is aggressively evaluating its' mineral property portfolio of numerous concessions which total 20,347 hectares held in Mexico including:

Guinoloza Au-Ag Property (formerly called Yecorato 51), SW Chihuahua, just west of Batopilas. A 1,850 ha concession surrounded by Francisco Gold's large land holdings which include the the recent discovery at El Sauzal where Francisco Gold reports an estimated resource of 3.59 million ounces of gold at 2.21 grams per tonne with a mineable reserve of 2.26 million ounces of gold at 2.98 grams per tonne. Did mapping and geophysics in the 1997-1998 time frame. Drilled with negative results in 4Q98-1Q99. An initial 8 hole Phase I 800m RC program tested silicified zones in lower volcanics. Holes were from 36 to 260m deep. Anomalous Ba, Pb, Zn and As in surface rocks and coincident IP and chargeability anomalies were tested. Both Au and Ag were below detection in ost samples. Highest gold values were 200 ppb.

Press Release 24Feb99
GCN #25 5Feb97

Guinoloza Update: November 17, 1998: A four-hole, 1000-meter RC drilling program on the Guinoloza property (formerly called the Yecorato 51) in Chihuahua, Mexico is commencing. (This turned into the 8-hole 800m program see above) Guinoloza is surrounded by concessions held by Francisco Gold, the discoverers of the El Sauzal gold deposit located two kilometers east of the Guinoloza property boundary. The anomaly was identified in 1994 using remote sensing satellite imagery and was staked by Minera Vulcan. Mapping at Guinoloza has identified an altered rock package in the center of the claim block, which is interpreted to be the same rock package found at the El Sauzal deposit. A volcanic-sedimentary sequence of andesites, dacites and limestones is altered by strong silicification along north-south and east-west fracture zones. The altered rocks are geochemically enriched in Ba, As and Pb, with a weaker Au signature. The target is beneath the currently mapped surface exposures within open pit mineable depth. An IP geophysical survey conducted last year identified high resistive zones within a more conductive halo. The resistivity anomaly is coincident with silica altered rocks. Similar anomalous resistive zones have been recognized over the El Sauzal ore body. A road completed this summer by Francisco Gold crosses the northern portion of the Guinoloza property and access roads have been constructed to the drill sites. Holes will be drilled to plus 200-meter depths to test altered and geochemically anomalous rocks as well as the geophysical anomaly. Surface rights over the Guinoloza concession for exploration as well as subsequent development and mining operation have been acquired from the local Ejido community.

November 5, 1997: Recently completed geophysical survey covering the Central Gold Target on the Guinoloza property has identified several drill targets consisting of a strong geophysical anomaly coincident with a previously reported gold mineralization target. Several discrete resistive zones within broader defined conductive halos are similar to the gold bearing geophysical targets drilled by Francisco Gold at El Sauzal. The geophysical anomaly continues from the northeast edge of the property onto the El Sauzal claim on line with southwesterly trending gold mineralization at El Sauzal's West Lip zone. Two, previously unknown, gold workings located on the northeast and southwest ends of the anomaly confirm this as the primary mineralized trend. Both IP and Resistivity surveys were conducted over the Central Gold Target during September. The geophysical program was designed to test a wedge shaped section of the high-silicified ridge running through the center of the property composed of lamprophyres, marine limestones and agglomerates with andesite and/or limestone clasts. An area of the ridge containing fault controlled silicified breccias with a strong, discrete arsenic and gold rock chip geochemical anomaly has been identified as the Central Gold Target. The mineralized hydrothermal breccias are primarily located along an intersecting set of north and northeast boundary faults which extend northeast through the West Lip gold zone at El Sauzal. These northeast faults are thought to be deep-seated mineralizing features because of the presence of lamprophyre style intrusions and altered and mineralized fragments of lamprophyres and limestone in the explosive hydrothermal breccias located along them. The central block of marine limestones, and andesite and limestone agglomerates is highly reactive and would be an ideal host for high-grade gold mineralization.

The northern two lines defined a strong discrete resistive zone set within a larger conductive halo open to the northeast, towards El Sauzal. It is interpreted as a central silicified zone surrounded and underlain by sulfides. Several other similar zones were defined to the southeast of this central silicified zone. At the end of the geophysical program a small gold working was discovered on trend and south of the southern geophysical anomaly on the Yecorato 51 claim. The strength and contrast of the geophysical anomalies and the coincident nature of the geophysical, geochemical, and geological features have defined several high quality drilling targets at Yecorato 51.

GCN #223 20Nov98
GCN #185 25Sep98
Press Release 5Nov97
GCN #169 3Sep97 (W/maps and figures)
GCN #216 10Nov97

Jabali Project NW Sonora near La Choya where 1000m dd occured in June, '96. Mineralization described as quartz lenses in low-angle shear zones.

Baboyahui Cu property in southern Sonora where drilling was also to have occurred in '96.Described as structurally controlled Cu-porphyry style mineralization associated with altered granitic mass including an andesitic breccia pipe where grades of 0.2-1.0% Cu have been found over surface of 200 by 700m.

La Mesa Colorado Cu-Au property, which from the figure looks like it is E of Los Mochis, maybe up into Durango.

Gavilanes, Durango which lies WNW of Cambior's Metates deposit. last August Queenstake said they are going to drill this 2,300 ha. prospect. (That was before the Au price went into the tank!)

GCN #164 26Aug97
GCN #131 8Jul96
CMH 1996-1997