Annual exploration report MLN 342, MLN 346, MLN 405, MLN 459, MLN 811, MLN 1033, MLN 1039, MCN 504, MCN 505 and MCN 3161 for the period ending 31 December 2005 Mount Bonnie Group

Abstract

The Mt Bonnie Project tenements are located 145 km SE of Darwin. NT The area covers the vicinity of the Mount Bonnie Mine, south of the Yam Creek gold mining centre, Historically, exploration was focused on a linear gossanous outcrop enriched in base metals. Underground exploration and development was carried out in the early part of the 20th century. The NT Government commissioned several exploratory diamond core holes. From the mid 1970's exploration identified a polymetallic resource estimated at 480,000t @ 7.67% Zn, 1.8% Pb, 0.4% Cu, 186.0g Ag/t, and 1.5g Au/t. With the increase in gold price the deposit was re-assessed and the gold-silver enriched oxide zone was open pit mined by Henry and Walker in 1983. A reported 110,000t @ 7.0g Au/t and 286g Ag/t was mined and treated on site. Territory Goldfields NL acquired the prospect in the mid nineties and conducted several literature reviews, rankings and rehabilitation of the prospect up to the end of 2001. In April 2002 Territory Goldfields NL (parent Northern Gold NL) entered into a joint venture agreement with Buffalo Creek Mines NL (now owned by Harmony Gold (Australia) Ltd.) This agreement (Burnside Joint Venture) jointly managed certain gold mining tenements of each party and included the treatment plant at Brocks Creek. In 2005, GBS made a successful takeover of Northern Gold, and entered an agreement to purchase Harmony's 50% share of the Burnside JV, giving GBS 100% of the project. The Brocks Creek plant has been sold, and the purchase of the Union Reef treatment plant by the joint venture in August 2004 generated a technical re appraisal of all advanced stage gold resources in the Brocks Creek region. The metallurgical linking of the gold component to base metal sulphide has caused the prospect to be ranked lower than other gold deposits held by Northern Gold NL in the Burnside Region. The base metal sulphide deposits held by GBS/Burnside are being appraised. A proposal involving modeling of previous work to help identify further work that is necessary for the full evaluation of these deposits.