Annual exploration report ERL 130 Esmeralda Union Reefs Project year ending 16 December 2007

Abstract

ERL (Exploration Retention Licence) 130 is situated 210 km SE of Darwin, NT, and 8km north east of Pine Creek. GBS Gold Australia Pty Ltd acquired the tenement in April 2006 as part of a take over and acquisition of the companies that ran the Burnside Joint Venture. Within the tenement, previous exploration by Cyprus Gold Corporation and Acacia Resources had outlined two significant adjacent and sub parallel gold resources (A and B), known as Esmeralda deposit which is located some 4km south of the Union Reefs mill. AngloGold estimated that the deposit at 0.7g/t cut off, contains a combined inferred resource of 1.26Mt @ 1.62g/t Au. (66,000oz). Within the project area geology is dominated by clastic rocks of the Mt Bonnie Formation that is the uppermost formation of the South Alligator Group, and the Burrell Creek Formation which is the lowest unit of the Finniss River Group. They have been intruded by the Palaeoproterozoic granites such as Allamber Springs towards east and Tabletop Granite towards west. During the year ending 16 November 2007, work within ERL130 included a technical review in order to assess the potential of the project area. Esmeralda gold deposit located within ERL 130 has significant resource which can supplement ore feed stock at Union Reefs Gold processing facility. Considering its location in a close proximity to the Union Reefs plants, GBS Gold realises it significance for gold production in the long run. However, at present company's attention is focused in developing Cosmo Deeps and Maud Creek projects with a budget of over $30 million. Gold deposit such as Esmeralda will play a major role in the long term operations of the company but it has to be ranked for development. During the reporting period exploration activities included report preparation, reconnaissance visit, technical review, administrative duties and planning for upcoming field season.