Annual exploration report Howley Ridge Tenement Group year ending 31 March 2007 MCN's 377-380, 852-857, 1035, 3099-3115, 3117

Abstract

The Howley Ridge mineral claims are located 130 km SSE of Darwin, NT and 8 km NW of the Cosmopolitan Howley Mine of the Pine Creek Orogen. The tenements occupy a segment of the axis of the Howley Anticline. In 2005, GBS made a successful takeover of Northern Gold, and entered an agreement to purchase Harmony's 50% share of the Burnside JV, giving GBS 100% of the project. The resource at Howley Ridge requires further modeling and economic study to determine whether it can contribute ore feed to the GBS gold deposits. During 2006-2007 work completed over the Howley Ridge MCNs consisted of; Planning for the upcoming field season; Administrative Duties; Report Preparation; and Data Integration and validation for the Data Shed database. Work in the region has been deferred because company resources have been concentrated on the recommencement of mining in the district by GBS Gold. Commissioning of the of the dual-mill 2.5Mtpa Union Reefs CIL gold plant in the Northern Territory commenced 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. Exploration in the Howley region will be an integral part of GBS Gold plan to continue to replenish supply to the mill. The region is considered important for review to take into account the favourable gold price.