Annual report on MLN 1058 Toms Gully Gold Mine year ending 2 August 2008

Abstract

MLN 1058 is located approximately 90 km south east of Darwin, Northern Territory, and some five kilometers south of the Arnhem Highway. It covers about 681.8 hectares and hosts the Toms Gully Mine. MLN 1058 was granted on 8 March 1989 and will expire on 2 August 2014. In July 2007, by virtue of an agreement, GBS Gold Australia acquired Toms Gully tenement package including gold plant. The Project area is located within the northern portion of the Pine Creek Orogen. It mostly contains the Wildman Siltstone, a sequence of tightly folded strata with an unconformable contact with the Koolpin Formation, which covers south-western corner of MLN 1058. Towards south-east, Mount Bundey Granite intrudes the host sequence, imparting contact metamorphic aureole which could be several kilometers wide. After acquiring the Toms Gully Gold Mine and related assets, GBS Gold Australia embarked on re-commissioning the mine and processing plant. A feasibility study was completed in the first half of 2008 which costed over $8.0 millions; it involved a new resource model, process plant modifications and re-commissioning activities. Processing plant and mine came online on 25 August 2008 but have to place on care and maintenance again due to poor ore grade and lower then expected recovery. Meanwhile on 15 September 2008, GBS Gold Australia Pty Ltd was placed under voluntary receivership and all operations are now under care and maintenance, including Toms Gully project area. Currently, efforts are underway to restructure the company, and to find financial resource to re-commence the operations again. Until such time, the Toms Gully operation will remain under care and maintenance.