Annual report on exploration licence EL 22206 AuQuest Project period ending 21 October 2007

Abstract

EL 22206 is situated about 90 km south-east of Darwin on the western side of the mineral lease 1058 which contains Toms Gully Gold mine. The tenement was granted on 22 October 2003 and expires on 21 October 2009. It comprises 2 graticular blocks that comprises 6.5 km2. On 25 July 2007, GBS Gold Australia Pty Ltd acquired all tenements and Toms Gully gold mine held by Renison Consolidated Mines NL, including EL 22206. This tenement package is in the process of being registered in the name of GBS Gold Australia. During this transferring period, GBS Gold Australia also has the obligation of statutory reporting on these tenements. EL 22206 is located within the Pine Creek Orogen, which has been interpreted as an intracratonic basin lying on an Archaean basement, and containing a 14 km thick sequence of Palaeoproterozoic sediments, accompanied by lesser volcanics, granite plutons and dolerite intrusions. The sequence was deformed and metamorphosed during the Top End Orogeny (~1870 - 1780 Ma. Cullen Batholith and satellite plutons intruded the Palaeoproterozoic meta-sedimentary sequence dated at 1850 - 1780 Ma). Work during the period ended 21 October 2007 on tenement included literature search, reconnaissance visit, administration and report writing. This was due to the acquisition of the tenement package by GBS Gold Australia Pty Ltd. Renison Consolidated Mines NL has informed that during the reporting period no on-ground exploration activity too place. A review of the tenement is underway to assess the full potential of the project area. The proposed work programme for the tenement would include a review of historical data compiled by Renison Consolidated to identify if any areas of anomalism had previously been detected by other explorers in the region, ground-truthing by GBS Gold staff, and a technical review of the exploration potential of the area. Further to the southwest outside the licence, a highly anomalous Lag sample occurs where this magnetic lineament intersects the northwest trending Noonamah - Corroboree magnetic low basement lineament. This trend will be further investigated over the coming dry season. There is also possibility of Aircore/RAB drilling in order to test some of anomalous areas.