Annual exploration report MCN 4267 for period ending 11 may 2007 Davies Burnside Project NT

Abstract

MCN 4267 is located 150 km southeast of Darwin and 500 m north of the Golden Dyke Open Pit. GBS Gold Australia acquired the tenement by friendly take over Northern Gold in 2005. A small resource of gold mineralisation (Davies No. 1) hosted by the Koolpin Formation and outlined by RC and diamond drilling. It has a 60m strike length, averages 2m in width and is estimated at 49,000t at 2.58g Au/t. The deposit comprised of quartz vein system which is concordant and tabular. It is hosted by sulphidised carbonaceous shale that dips steeply west. Structurally, the deposit is linked to an arcuate system of reverse faults that link Langleys, Golden Dyke and Davies on the western limb of the Golden Dyke Dome. These reverse faults exploited an arcuate parasitic anticline that further north is termed the Good Shepherd. Fault cross-lineaments of small displacement, striking NW and NE have been interpreted as further focusing gold mineralisation. Work in the project area has been delayed because company resources have focused on re-commissioning of the dual-mill 2.5Mtpa Union Reefs CIL gold plant in the Northern Territory, commenced production as of September 2006. The two initial open pit (Fountain Head and Rising Tide deposits) ore sources came online mid September and high grade ore was sourced from the Brocks Creek Underground Mine (Zapopan) in late September. GBS Gold Australia regards the MCN 4267 a strategic and important tenement which could provide additional resource to feed the mill in the near future.