Annual exploration report Yam Creek Group Year ending 31 December 2005 MLN 214, 341, 343, 349, 823-832, 858-863, 940, 1112, MCN 46-47, 49-50, 624-625, 898-899, 4428, 4430, 4432, 4434

Abstract

The Yam Creek tenement report group covers the historically important Yam Creek alluvial and bedrock gold mining centre that is located approximately 150 km SSE of Darwin. Geologically it occupies a site adjacent to the regional Hayes Creek Fault system. The latter has played a part in structurally preparing sites for gold deposition within cyclic greywacke-mudstones of the Lower Proterozoic Mt Bonnie Formation. The area has been the subject of modern gold exploration since the late 1970's. Exploration, post 1988 was managed by Northern Gold NL and its subsidiaries and Acacia Resources (AngloGold) subject to option agreement. The tenement group comprising a total of 578.2 hectares is part of an extensive schedule of tenements incorporated into a joint venture with Buffalo Creek Mines P/L in April 2002. Burnside Operations P/L is the management entity for the JV. The Burnside Joint Venture was initially created with the objective of exploring, developing and mining gold deposits within the Brocks Creek region and milling the ores at the Brocks Creek treatment facility. This facility was sold to Tanami Gold NL in August 2004. At the same time, the Burnside Joint Venture purchased the Union Reefs mill, located 35km to the SE of Yam Creek, from AngloGold (Ashanti) Ltd. In September 2005 the joint venture was terminated when Buffalo Creek Mines P/L sold its equity to Northern Gold NL. The sale process, subject to satisfying conditions and approvals, is expected to be finalised in the first quarter of 2006. In turn Northern Gold was subject to takeover by GBS Gold Australia Pty Ltd which is to be the controlling entity for the Burnside assets. Since formation of the joint venture the Yam Creek and North Point area has been subjected to reverse circulation drilling programs that were designed to prove up gold resources that could supplement mill feed for a full scale mining operation in the area. The total cost of this work during 2002 was $122,014. During 2003 a geo-statistical consultant was commissioned to conduct a resource study on the North Point and Princess Louise gold deposits. This work was costed at $19,923.00. During 2004 the joint venture conducted an internal technical review of the Princess Louise and North Point gold resources, in light of the recent acquisition of the Union Reefs mill. This consulting work plus reporting amounted to $4,008.00. The tenement group was subjected to a re-modelling review in 2005 using grade control and exploration drill densities. The cost of this work with reporting totalled $6,500.00.