Annual exploration report Maud Creek Project year ending 31 December 2006 MCN's 4145-4146; MCN's 4149 - 4152, MCN's 4218 - 4225. MCN's 4343-4348, MLN 1978

Abstract

The Maud Creek Project, including the Red Queen/Chessman tenements is situated 18 km east of the town of Katherine NT and 275 km south east of Darwin The Maud Creek Group have changed handed several times over the years and finally now owned by GBS Gold Australia Pty Ltd. Maud Creek goldfield is confined to the iron-rich quartz reefs hosted by the Maud Dolerite and tuffs of the Tollis Formation. Gold is fine-grained and is associated with pyrite, chalcopyrite and secondary copper mineralisation. Wall rocks are often brecciated and cemented by iron oxides. At Gold Creek/Main Zone, mineralisation is concentrated along the faulted contact of hanging-wall mafic tuffs (probably from the Dorothy Creek Volcanic Member of the Tollis Formation) and footwall lithic sandstone/greywacke. At the Red Queen/Chessmen prospect gold occurs within mafic fragmental volcanic rocks as well as black chert and arenaceous sediments characterised by pyritic mafic fragmental rocks, possibly part of the Dorothy Creek Volcanic Member. Vein quartz and chalcedonic silica crop out as siliceous and ferruginous breccias. Arsenic and copper are both associated with gold at Red Queen. Exploration of the projected area commences in 1966 and since then a number of programs have been conducted to ascertain the nature of mineralisation and determine the resources. A number of assaying and drilling together with resource assessments campaigns have been conducted and so far, an Inferred Resource of 10,048,000t at 3.41g/t Au (cut) for 1.1016Moz contained Au have been established. More recently a patented GEOCOAT technology has been tried for the gold recovery on the refractory ore in the Maud Creek and satellite deposits such as Chessman and Red Queen. This technology simply utilises biological oxidation technology on a heap leach basis. In the year 2007, both further assessment of previous work and planned RC drilling on the Chessman prospect and the O'Sheas prospect to the east of the main Maud Creek zone will be undertaken.