Annual exploration report for MCN 3705, MCN 3706, MCN 3707 and MLN 1103 for the period ending 30 April 2009

Abstract

The Woolwonga Group comprises 7 (sic 4) tenements which are located about 130 km SE of Darwin, NT and 16 km NE of the Brocks Creek mine. It covers the Woolwonga gold mine which is situated within the historical gold mining field. GBS Gold Australia Pty Ltd acquired the tenements in 2005 through a subsidiary Northern Gold Limited. Gold mineralisation at Woolwonga is associated with quartz-sulphide veins which fill faults and fractures set in Mt Bonnie Formation. Mineralisation and historic workings on vein outcrops occurred over the full length of the original Main Ridge, and colluvial shedding from this extended for 500m SE of the ridge and was worked extensively by Chinese workers from the late 1880's to early in the 20th century. The gold is controlled by three main structural features such as the axial zone of the Woolwonga Anticline, SE dipping fracture zones and competency contrast sites. Following extensive exploratory drilling and a feasibility study by the Dominion Mining, the company estimated a recoverable mining reserve of 2.1Mt @ 2.78g Au/t. During 1990-95 mining operation, it produced 4 tonnes of gold. Northern Gold NL acquired the tenements from Dominion following completion of the mining phase and rehabilitation of the mine site. During the reporting period a peripheral review of the tenement was undertaken which still support significant mineral potential of the project area. Project area contains an important mined out Woolwonga deposit which has produced significant quantities of gold in the past, and the area still has considerable exploration potential. Technical review of the data suggests that there is possibility of additional ore. In 2009-10 reporting year, project area will be explored for gold and base metal mineralisation. For this purpose, area identified during this review will undergo soil/rock chip sampling along with geological mapping. If encouraging results received, some RAB/RC drilling may also take place.