Annual exploration report Golden Dyke Group MLN 794 to 795 and MCN 1456 to MCN 1463 year ending 31st December 2006

Abstract

The Golden Dyke Group comprises 10 mining tenements which are located along the western limb of the Golden Dyke Dome, a complex folded structure associated with historic gold and base metal mines, discovered and initially developed between 1872 and 1937. It is situated approximately 140km SE of Darwin, Northern Territory. The tenements have been actively explored for gold by several companies, utilising drilling, trenching, pitting, dozing and geochemical methods. In the area, gold production from open pits and shafts in the region occurred up to 1984. The Burnside Joint Venture was finalised in April 2002 between subsidiaries of Northern Gold NL and Harmony Gold Australia Ltd. This dealing amalgamated a schedule of joint tenements including the Golden Dyke group. The JV was formed to identify and treat gold resources within a 30 km radius of the jointly owned Brocks Creek Mill. This mill was sold in August 2004 to Tanami Gold NL and the mill at Union Reefs was purchased by the joint venture in the same month. All exploration activity has been under the management of Burnside Operations P/L. After the sale of the Harmony Gold Australia Ltd 50% interest in the JV to Northern Gold NL (that owns Territory Goldfields NL), the project is now 100% controlled by GBS Gold Australia Pty Limited. In previous years, work on the Golden Dyke tenement group comprised compilation of geological, historical exploration data and acquiring of SPOT images. The area is at a historically mature stage of exploration and easily accessible oxide gold resources in the area had already been extracted by open pit prior to 1985. As a consequence the group is ranked at a low-medium level with the scope to generate further gold resources in the future. During the reporting year activity at Golden Dyke Group tenement was confined to further reviewing, surveying, data compilation and assessing the tenements. During 2006, efforts were mainly focused on acquisition of the Union Reefs Mill and re-commissioning in September 2006. A review of the Golden Dyke group tenements shows the importance of the area for supplement gold resource in the future for the Union Reefs Mill feed. During 2007, the project will be subjected to a further technical review and ranking by the new owner, GBS Gold Australia P/L.