12th Annual exploration report ERL 130 Esmeralda Year ended 16 November 2005

Abstract

The Esmeralda tenement (ERL130) is situated 170km SE of Darwin, NT, and 8km north east of Pine Creek. Burnside Operations P/L acquired the lease in August 2004 as part of the purchase of the Union Reefs mill and underlying tenement assets. The project assets had been previously owned by Acacia Resources and later AngloGold (Ashanti) Ltd, who carried out mining and milling operations at Union Reefs prior to closure in July 2003. At Esmeralda previous exploration by Cyprus Gold Corporation and Acacia Resources had outlined two significant adjacent and sub parallel gold resources (A and B) some 4km south of the Union Reefs mill. The Zone A deposit is the better of the two and AngloGold estimated that subject to ore continuity, yet to be defined by grade control density drilling and the cost of relocating the adjacent Darwin gas pipeline, 18,000oz gold may be economically mined. They estimated that the two deposits, at 0.7g/t cut off, contain a combined inferred resource of 1.26Mt @ 1.62g/t Au. (50,000oz). During the report period the Burnside Joint Venture conducted an in-depth mining/geological review of the two deposits. Together with reporting, this work was costed at $10,575.00. This study by B.Makar is appended. In September 2005 an agreement was set in motion that would see Northern Gold NL acquire 100% of the Burnside JV assets. In turn, Northern Gold was subject to a friendly takeover by GBS Gold. The outcome of this consolidation is anticipated to be more favourable for a Union Reefs mill start up in the short term. In the following year, 2006, it is expected expenditure will focus on developing sufficient gold ores from first rank deposits at Pine Creek and Burnside with a view to initiating a mill start-up. At Esmeralda the economics and feasibility of exploring and/or mining Target A, adjacent to the Darwin gas pipeline will be addressed. In the event of a favourable outcome, a program of infill drill evaluation and trenching has been recommended.