Queenstake Resources Ltd. - Drilling Update.

VANCOUVER, British Columbia--(BUSINESS WIRE)--May 16, 1996--QUEENSTAKE RESOURCES (TSE:QTR) James D. Mancuso, President and C.E.O. of Queenstake confirmed to those attending the Company's annual general meeting yesterday, plans to drill 5 prospects over the next few months including the Mata Mata and Chupaca projects in the Ancash region of Peru, the Abundancia project in Chile and the Jabali and Baboyahui projects in Mexico.

Mata Mata, Peru

The Mata Mata prospect is located on the north end of the mineralized trend in the Ancash region which includes Arequipa Resources' Pierina gold deposit. Mata Mata was identified through the interpretation of landsat thematic mapping technology and it is owned 100 percent by Queenstake through claims and options. Multiple manto zones, mineralized blanket-like systems related to limestone beds, have been identified dipping steeply and related to an altered granitic intrusive. Surface sampling has returned up to 8 grams per ton gold, 300 grams silver, 4 percent zinc and 9 percent lead.

A first phase diamond drill program is planned to begin in June, depending on drill availability. Three 250 metre deep holes are planned over a three week period. The target(s) will be high grade mantos and/or disseminated metal sulfides in the granitic intrusive. Chupaca, Peru

From Mata Mata, the drill rig will be moved to Chupaca, a gold prospect 2 kilometres from the Pierina gold deposit. Mapping and sampling have identified a drill target 600 metres long and up to 400 metres wide defined by clay and silica alteration in structurally prepared volcanic rocks and a geochemical gold anomaly. A series of 200 to 300 metre holes will test the anomaly. Eighty rock chip samples are included in the anomaly with values up to 2.2 grams per ton gold and averaging almost 0.5 grams per ton. Samples from dump material derived from small old prospect pits immediately south of Queenstake's property range up to 8 grams per ton gold.

The target at Chupaca appears to be structurally controlled on a northwest trend, similar to Pierina. Highest gold values have been found so far at lowest elevations, closest to a sedimentary unit underlying the altered volcanic rocks. It is expected that the best target may be at and near this interface and target thickness could be substantial since more than 200 metres separates the surface from the underlying permissive contact zone at higher elevations. The Chupaca target has the potential to host a multi million ounce gold deposit.

Abundancia, Chile

The Abundancia property is located 70 kilometres north of Copiapo in the region which includes major copper deposits such as Candelaria, El Salvador, Escondida, and Chuquicamata. Queenstake holds its interest in this property through its 40 percent ownership, with rights to increase up to 61 percent, of Oro Andino. Abundancia is a porphyry copper prospect first identified by an alteration anomaly on processed landsat thematic mapper imagery. Follow-up geology and geochemical sampling outlined by alteration, limonite evaluation, and copper and molybdenum anomalies, a leached capping in subdued outcrops adjacent to a gravel covered basin. Induced polarization geophysics identified an anomaly thought to be due to disseminated sulfides, mostly under gravel cover adjacent to the target outlined by geology and geochemistry. Three reverse circulation drill holes are planned on lines 400 metres apart. Drill depth will be 200 to 300 metres in order to penetrate a leached capping, an enriched copper zone, and into primary mineralization. Bids from drill contractors have been solicited and the drill program will start in early June.

Jabali, Mexico

The Jabali project is located 60 kilometres south of Lukeville, Arizona in Northwestern Sonora, Mexico. Mineralization at the Jabali prospect consists of a series of auriferous quartz lenses exposed in the hanging wall of a low angle shear zone. This mineralized shear zone is exposed along the bed rock alluvial contact. By analogy with the nearby La Choya mine, the target at Jabali is a series of stacked, flat lying auriferous quartz lenses, connected by high angle mineralized quartz veins. The mineralized system at Jabali is two to three times larger and produces high grade values up to four times greater than equivalent areas at La Choya. Based upon the La Choya analogy, Jabali has the potential to contain between 1 and 2 million ounces of gold.

The primary target at Jabali lies under what appears to be a shallow recent alluvial cover. The near term 1,200 metre drilling effort will be focused on determining the thickness of the buried shear zone, and testing the potential for additional mineralization related to the exposed quartz lenses. The drilling is expected to commence in June, 1996 and will take approximately one month to complete. Baboyahui, Mexico

From Jabali, the drill rig will be moved to the Baboyahui project approximately 40 kilometres east of the town of Alamos in southern Sonora, Mexico. Baboyahui is a structurally controlled porphyry copper deposit related to an east-west elongate multiphase granodiorite stock and affiliated dikes of probable Laramide age that occur along the main structure and its offshoots. Known mineralization is hosted by an andesite breccia pipe, and associated andesite flows in contact with an altered and mineralized granitic mass. Mapping and sampling has defined a copper oxide target roughly 200 metres by 700 metres. Grades in this area range from 0.2 to 1 percent copper in chip samples. Gold is locally important. Data from a series of shallow trenches indicates that the copper can be enriched by a factor of 8 within a metre of the surface.

The next stage exploration effort will be focused upon testing the grade and thickness of the mineralized andesite, the enrichment blanket potential, and the contact between the andesite and granitic mass. A neighboring gold quartz, tourmaline, molybdenum vein stockwork system will also be mapped and sampled in greater detail. The drilling is expected to take one month with results on all of the drilling programs within 30 days of its completion. -0- "James D. Mancuso" James D. Mancuso President and Chief Executive Officer

CONTACT: Queenstake Resources Ltd.

James D. Mancuso, 604/684-1218