Annual exploration report MLN 766 and MLN 1060 Bridge Creek Group year ending 1 December 2006

Abstract

The Bridge Creek Project (MLN 766 and MLN 1060) is approximately located 125 km SSE of Darwin and 35 km southeast of Adelaide River. The project is managed by the Burnside Operations P/L (Burnside), a subsidiary of GBS Gold Australia Pty Ltd. A joint venture agreement was formalised between Territory Goldfields NL (Northern Gold NL subsidiary) and Buffalo Creek Mines Pty Ltd (Harmony Gold Australia Ltd subsidiary) in April 2002. The JV merged certain mining assets within a 30km radius of the Brocks Creek mill and included the Bridge Creek tenements. The tenements cover a sector of the Howley Anticline, approximately 12 km along strike north from the Cosmopolitan Howley Gold Mine. Gold mineralisation is hosted by the Koolpin Formation, Gerowie Tuff and partly by the Zamu Dolerite. Intensive gold exploration including reverse circulation drilling, diamond drilling, resource modelling and metallurgical test work had been previously carried out on the Bridge Creek primary resource that lies within the tenements. So far, a marginal resource of 584,000 t at 1.81 g/t Au has been delineated. Due to current company focus to developed projects such as Cosmo Deeps, Maud Creek and Princess Louise, Bridge Creek project is on a low priority. However, GBS Gold regards MLN 766 and MLN 1060 strategic assets which could provide supplementary ore to feed the mill located at Union Reefs.