Annual exploration report Caroline group year ending 4 November 2008 MLN51 to MLN 57

Abstract

MLNs 51-57 together form the Caroline Group (reporting purpose) which is situated about 170km SE of Darwin, Northern Territory, and 8km north of Pine Creek. This group is only 4km south of the Union Reefs mill and due to their close proximity is considered significant in GBS Gold Australia's port folio. The Caroline tenements were initially the subject of a base metals search in the late 1960s. Subsequent soil and costeaning work by Aztec Resources showed gold and arsenic anomalism occurred adjacent to a zone of historic shallow base metal workings. Acacia Resources Limited explored the area in the 1990s. Exploratory RC drilling located narrow but significant gold intercepts towards the southern end of the group, adjacent to a regionally significant but barren dolerite dyke. During the reporting period a peripheral review of the Caroline Group of tenement was undertaken in addition to report preparation, reconnaissance visit and administrative duties. The review shows that these tenements are located in one of the most prospective regions in the Pine Creek Orogen. Previous geological studies and exploration programs have established the prospectivity of this area for gold and base metal mineralisation. On 15 September 2008, GBS Gold Australia and its subsidiaries came under voluntary receivership and all projects have been placed under care and maintenance. Currently, efforts are underway to restructure the company or to arrange a new financial package to restart the operations again. During this time strategic planning should continue to safe guard the valuable assets. The Caroline Group of tenements will remain under review and on availability of financial resources, a campaign of in-fill soil sampling will be carried out, and if new targets are identified that will lead to RC drilling.