Annual exploration report for MCN 3705, MCN 3706, MCN 3707 and MLN 1103 for the period ending 30 April 2006, Woolwonga Group, Burnside Project

Abstract

The Woolwonga tenement group cover the Woolwonga mine, 130 km SE of Darwin, NT and 16 km NE of the Brocks Creek mine office. The mine is located on the 310 degree striking axial zone of the Woolwonga Anticline, formed within Lower Proterozoic clastic sediments and dolerite sills of the Mt Bonnie Formation. The axial zone is cut by mineralised 335 degree striking fracture sets. Combining this with the effects of axial planar foliation and hinge zone detachment structures, interacting with competency contrast planes between silt-mudstone and greywacke, a complex of stockwork style quartz-sulphide vein network and saddle reef style bodies has developed. Following exploration programs from 1985, the Dominion Mining Ltd mined from the Woolwonga open pit. Following extensive exploratory drilling and a feasibility study, the company estimated a recoverable mining reserve of 2.1Mt @ 2.78g Au/t. Northern Gold NL acquired the tenements from Dominion following completion of the mining phase and rehabilitation of the mine site. In 2002 Northern Gold NL subsidiary, Territory Goldfields NL entered into a joint venture agreement with Buffalo Creek Mines P/L, whereby the Woolwonga tenement group, along with a wider schedule of jointly held mining assets, was to be jointly managed under Burnside Operations P/L. In 2005, GBS Gold launched a successful takeover of Northern Gold NL, and also entered into an agreement to purchase the 50% share of the Burnside JV that was held by a subsidiary company of Harmony Gold. GBS Gold now hold 100% of the Burnside project. Several programmes of drilling have been carried out in the past 2 years on the tenements. RC drilling targetted the Empire prospect, SE of the main pit complex in 2003/04. In 2004/05, RAB drilling tested the strike extension of the Woolwonga Anticline axis. No drilling was carried out in the past year due to drilling higher priority targets on other leases, but GBS plan to carry out more drilling within the next year.