Annual exploration report EL 24018 Hayes Creek East year ending 9 August 2008

Abstract

EL 24018 is situated within the Pine Creek Orogen, about 140 km SE of Darwin, NT. It was granted on 10 August 2004 and expires on 9 August 2010. The tenement comprises seven sub-blocks that cover approximately 2,331 hectares (23.37km2). The EL is registered in the names of Territory Goldfields NL and Buffalo Creek Mines NL in equal shares. During 2005-2006, GBS Gold Australia Pty Ltd successfully made a takeover of Northern Gold NL and has purchased Harmony Gold (through subsidiary Buffalo Creek Mines) 50% share of the Burnside Project as of 1st April 2006. The tenement largely covers a tract of the McMinns Bluff Granite that has been unconformably overlain by Mesoproterozoic Tolmer Group sandstone, conglomeratic sandstone and subordinate dolomite. The granite body is porphyritic pink, green and is exposed on the flanks of the valley of the Margaret River headwaters that in this region flow east to west. The more resistant Tolmer Group has formed an arcuate escarpment that faces north on the south side of the valley. Table-tops of Cretaceous sandstone overlie the granite to the east. To the north, rocks of the South Alligator and Finniss River groups are also present. An important feature is the presence of Hayes Creek Fault which transacts the area from NE to SW. During the reporting period, a peripheral review of the project area was undertaken which identified significant potential of EL 24018, particularly for gold, base metals and uranium. GBS Gold Australia intends to diversify its port folio including base metals. Drilling result form Pine Creek Orogen provides significant encouragement for company's intention to be base metals explorer and miner. To pursue further, GBS Gold Australia has entered into JV agreement with the Thundalarra Exploration Limited to explore uranium. GBS Gold regards EL 24018 a strategic asset which can assist the company to diversify its portfolio. Current technical review identified multi-commodity potential of the project which GBS Gold intends to explore vigorously in the coming years.