Annual exploration report for EL 9608 'Mount Bonnie South', for the period ending 24 May 2006

Abstract

EL 9608 is located 145 km SE of Darwin, NT and 18 km SE of Brocks Creek. Northern Gold NL applied for EL9608 (3 blocks) on 10th July 1996. Northern Gold's main focus was searching for extensions to mineralisation at Mt Bonnie to increase the resource base for development. The licence was finally granted on 25th May 2004, when Northern Gold were in JV with Harmony subsidiary Buffalo Mines Pty Ltd (Burnside JV). GBS recognise EL 9608 as being highly prospective with; a) similar host lithologies to Cosmo/Chinese b) several favourable structures crosscutting through the tenement c) recognition of NW-trending soil anomalies from previous work that have not been followed up with further work d) similarities to adjacent Golden Dyke mineralisation e) possible extensions of Mt Bonnie mineralisation. During 2005, GBS made a successful takeover of Northern Gold NL, with the takeover becoming final in November 2005. In April 2006, GBS acquired Harmony's 50% share in the Burnside JV, and now control 100% of the Burnside Project. During this time, work on EL9608 has been limited to a data review, recognition of mineralisation potential, and planning of drilling. An EOMP (SE Burnside MMP) has been compiled, and drilling on EL9608 is planned immediately following Departmental approvals.