Annual exploration report for SEL 10341 Pioneer Union Reefs Project year ending 29 September 2007

Abstract

Substitute Exploration Licence (SEL) 10341 is located 165 km SE of Darwin, Northern Territory. The tenement is held by Buffalo Creek Mines Pty Ltd (50%) and Territory Gold fields Pty Ltd which are the subsidiaries of GBS Gold Australia Pty Ltd. Currently, it covers 64.02 km2. The substitute exploration licence 10341 covers mainly the Burrell Creek Formation with dominant lithologies of greywacke, siltstone and mudstone. Towards north-west, minor rocks of the Mount Bonnie Formation (South Alligator Group) are also exposed. These lithologies have been intruded and thermally metamorphosed by the Tabletop, Allamber Springs and McKinlay Granites. There are a number of gold deposits/prospects around the SEL 10341 and within the project area, which are covered by Elizabeth group of tenements. There is a close association of these deposits with the lithologies of the Finnish River Group and South Alligator Group, intruded by the Palaeoproterozoic granites in the surrounding area. During the reporting period, a technical review of the Pioneer Project (SEL 10341) was undertaken which identified its significance with respect to its mineral potential and close proximity to the Union Reefs duel CIL gold plant, which was recommissioned in September 2006. As a result of the technical review, a number of target zones have been identified which will be subject to field testing in the next year. Exploration activities during the reporting period include technical review, ground-truthing, data validation, tenement administration and report writing. In the next reporting year, anticipated exploration activity will mainly concentrate within the nine blocks of SEL10341, where targets areas will be subject to geological mapping, and soil sampling, supplemented by auger and air core drill sampling. Based on the outcome of this program, a follow up RC and possible diamond drilling target will be outlined.