Annual exploration report combined technical report for EL's 22966, 22967, 22968, 22970, 23605, E24127 and 24262 for the period ending 1 May 2007 Moline Group

Abstract

The Moline tenement group (EL's 22966, 22967, 22968, 22970, 23605, 24127, 24262 and MLN1059) is located about 200 km SE of Darwin along the Kakadu Highway with a distance of about 45 km from Pine Creek. MLN 1059 contains the Hercules and Moline pits, along with smaller satellite pits, and is surrounded by the Moline tenement group. GBS Gold Australia subsidiary Terra Gold Mining Ltd has an option agreement with Michael Teelow to explore and prospect for minerals within the tenements. The exploration tenements are situated within the central region of the Pine Creek Orogen, which is characterised by open to tight, upright N to NW-trending folds of lower Proterozoic meta-sedimentary and volcanic rocks. NW-trending overturned anticlines of the Mt Bonnie Formation sediments dominate the central tenements, with some exposures of refolded Gerowie Tuff further to the northwest. Folded Burrell Creek Formation sediments are the dominant lithology further north and south on EL's 24127, 24262, 22966. During the reporting period, a reconnaissance visit was undertaken to plan for the following year's exploration program. During 2006-07, an in-depth review of the project area was undertaken to identify the mineral potential of the area. A soil/rock chip sampling program was initiated over the project area and so far, 136 geochemical samples have been collected, however, these have not been analysed yet. In addition two diamond holes were drilled on EL 23605 for a total depth of 321 metres. During drilling, 370 samples were retrieved which were analysed for Au, AS, Ag, Cu, Pb Zn. GBS Gold Australia considers Moline group of tenements an important target for gold mineralisation and has proposed a dedicated exploration program which will include extensive soil sampling, drilling, assaying and procurement of IKONOS imagery to assist in exploration.