Queensland Mining Corporation (ASX:QMN) Announce Maiden Resource Estimate For Mt Freda Gold Project

Sydney, Mar 8, 2011 AEST (ABN Newswire) - Queensland Mining Corporation (ASX:QMN) is pleased to announce that it has completed an initial resource estimate for its Mt Freda Project, which is situated 35 kilometres SE of Cloncurry, in North Queensland. The Mt Freda Project is held under mining lease ML 2741 and surrounding mining lease ML 2752.

A total (JORC compliant) inferred resource of 1.6 Mt at 1.7 g/t Au and 290 ppm Co (at a cut-off grade of 0.5 gram per tonne) has been estimated containing some 89,000 ounces of gold and 1 million pounds of cobalt.

The mineralisation at Mt Freda is concentrated in a west-northwest trending fault gouge extending over a length of about 400 metres, and which dips steeply to the south. Drilling has defined the mineralisation to a depth of about 240 metres below surface, or about 180 metres below the floor of the existing open pit.

Further drilling may extend the size and grade of this initial resource estimate.

Future Program

QMC plans further drilling and project assessments with the aims of:

(1) upgrading the resource classification in the portion of the resource which may be amenable to open pit and/or underground mining;

(2) drilling has been planned to:

- more closely defining the eastern and western limits of mineralisation;

- infilling gaps in the mineralisation model below the existing pit;

- potential depth extensions of the higher grade zones;

(3) defining the metallurgical parameters for gold recovery; and

(4) determining the value and recovery routes for potential by-products, particularly cobalt which has been recorded in QMC's drill programs.

"We are reviewing various process options to determine the most appropriate development scenario for this project, particularly when you consider that at a 1g/t gold cut-off Mt Freda has 76,000 ounces of gold at a grade of 2.3 g/t" said Howard Renshaw, MD of QMC.

"Mt Freda has the potential to allow QMC to join the ranks of gold producers. Our deepest drill hole is only to 260 metres, so clearly there is a lot of potential to find additional mineralisation at depth." he added.

Diversified Mineral Resources NL developed an open pit up to 60 metres deep. This pit provided about 100,000 tonnes of feed to a site-based carbon-in-pulp treatment plant.

Historic and QMC Drilling Programmes

The drilling database has been derived from eight campaigns. The first campaign was conducted by leaseholder Albert O'Keefe in 1985, and comprised only of shallow rotary air blast (RAB) holes. The subsequent reverse circulation (RC) campaign was completed in 1986. Diversified Mineral Resources NL (DMR) conducted RC and diamond drilling in 1987/88, prior to developing an open pit up to 60 metres deep. This pit provided about 100,000 tonnes of feed to a site-based carbon-in-pulp treatment plant.

The fifth campaign was conducted by Amalg Resources NL (Amalg) in 1995. QMC undertook the three most recent campaigns in 2008, 2009 and 2010 respectively.

Resource Estimation Methodologies

The estimate at 0.5 g/t Au cut-off grade is designed to provide a basis for determining open pit viability at a reasonably high throughput rate, which will be appropriate should Mt Freda be developed in conjunction with other nearby sources of mill feed. Other, higher cut-off grades may be appropriate if a stand-alone operation is envisaged. The deeper segment of this resource may not fall within open pit mining limits if conservative parameters are applied to the design, but may be recoverable by underground mining at a higher cut-off grade.

The resource is classified as inferred because of survey and data validation issues related to the earlier drill programs.

The current geological model suggests that the gold mineralisation at Mt Freda is controlled by a WNW-ESE oriented dilational jog. The host structure has a significant down dip extension, which was evident in the Company's diamond drilling campaign in 2009. The weathering profile has developed all the way into the deepest mineralised intersection resulting in the deep supergene enrichment. The Company is currently designing several deep diamond holes, targeting the deep sulphide gold potential in Mt Freda, to test for further economic mineralisation at depth in this dilational jog.

Information on Mineral Resource Estimation

QMC's drillhole collar locations were surveyed using a differential GPS at sub-metre accuracy. Amalg and QMC conducted downhole surveys of their respective drillholes.

Geology logs were not available for the O'Keeffe and DMR drillholes. A top cut of 30 g/t Au was applied to assigned grades.

The mineral resource models were undertaken by block modelling within a wireframe snapped to the drillholes. The wireframe was generated using a nominal 0.1 g/t Au threshold.

Block grades were estimated using ordinary kriging after assessing variography.

A nominal in-situ bulk density of 2.4 dry tonnes per cubic metre has been applied, based on testwork undertaken by Amalg. This value is yet to be substantiated by QMC testwork on a wider range of samples.

Commodity price (4 March 2011)

Co: US$38,500 per tonne or US$17.50 per pound (LME)

Au: US$1,427 per ounce (NYMEX) or US$46 per gram

(1 USD -1 AUD)

For the complete Queensland Mining Corporation Limited announcement including figures and tables, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/627102.pdf

Contact

Howard V. Renshaw Managing Director Queensland Mining Corporation Tel: +61-2-9251-6730 Email: admin@qmcl.com.au http://www.qmcl.com.au