Annual exploration report MLN 1109, MLN 833 and AN 398-402, for period ending 31 December 2005 Union Reefs Gold Mine

Abstract

Mining at Union Reefs was carried out under the management of Acacia Resources Ltd, who were taken over by AngloGold Ashanti Limited. In August 2004, the Burnside Joint Venture purchased the mill (design capacity 2.8Mt per annum dual mill circuits) and underlying tenements from AngloGold Ashanti. GBS Gold Australia acquired the Burnside JV by purchasing Northern Gold NL in an off-market takeover bid in September 2005. GBS plan to process ore from both the Burnside and Maud Creek resources at the Union Reefs mill. The main purpose of MLN 1109 is as a site for milling operations from nearby GBS operations. Care and maintenance will be ongoing. After modifications, the URGM plant is expected to be capable of treating free-milling and refractory ores at a rate of approximately 2.5Mtpa, comprising 1.5Mtpa of free-milling ore and 1.0Mtpa of refractory ore (GBS Gold website, Feb 2006). A decision regarding commencement of mining activities is expected during 2006. The Prospect Claim is a resource that will be assessed along with other potential underground resources by GBS in the future. It is envisaged that in the next year drilling will be carried out within the MLN, and prioritising of targets for further exploration.