Annual exploration report MLN 1109, MLN 833, AN 398-402 Union Reefs Gold Min year ending 31 December 2007

Abstract

The Union Reefs Mine (URGM) and adjacent 2.5 Mt CIL gold plant are located 170 km SE of Darwin, NT and 12 km north of Pine Creek. The mining and treatment centre is enclosed by MLN 1109 that totals 3,998.0ha. There are other tenements such as MLN 833 and AN 398-402 of small size, which are also included in this project for the purpose of group reporting. The URGM was the subject of open pit mining and treatment under the ownership of Acacia Resources Ltd and more recently by AngloGold (Ashanti) Limited. During this period the Union Reefs mill on MLN1109 inclusive MLN 833 treated a total of 20,225,360t at 1.47g/t Au for the recovery of 957,523 fine oz gold. Production ceased on 27 July 2003 and following a period of negotiations, MLN 1109, along with the mine infrastructure and satellite tenements, were purchased by Buffalo Creek Mines P/L and Territory Goldfields NL in August 2004. The entities formed the Burnside Joint Venture (2002) which is now wholly controlled by GBS Gold Australia P/L. Geologically, the mining centre is situated within a 300m wide NW trending structural corridor (Pine Creek Shear Zone). The corridor comprises tightly folded and sheared pelitic to arenitic sediments of the Palaeoproterozoic Burrell Creek Formation and inliers of underlying Mt Bonnie Formation. Two sub parallel lines of historic gold workings comprise the focus for the array of open pits mined in recent years. With the re-commissioning of Union Reef mill in September 2006, GBS Gold P/L is concentrating on securing the feed stock for the mill from several projects. At present, gold ore is being mined from the Brocks Creek mine, supplemented from Fountain Head and Rising Tide deposits. Plans are underway to develop projects such as Maud Creek and Cosmo Howley for mining. Gold ore mined from these projects will be treated at Union Reefs. Moreover, Union Reefs gold plant will go through expansion in which a circuit based on GEOCOAT technology will be built to facilitate refractory ore treatment form Maud Creek. This will lead to enhance the current production of 150 000 oz gold to 250 000 oz by 2010. During the reporting period a total of 6 RC holes for 591 metres were drilled at Bungo Prospect. During drilling, a total of 615 samples were retrieved and analysed for a suite of elements. Assaying of samples yielded disappointing results with gold concentrations too low to warrant any further work. Therefore, in 2008 emphasis will shift towards other prospective areas with the tenement group.