Annual exploration report for EL 23541 Howley East year ending 16 February 2008

Abstract

EL 23541 is located 130km SE of Darwin, NT and 5km west of Brocks Creek siding on the Darwin-Adelaide railway. The tenement is subject to the Burnside Joint Venture, managed by Burnside Operations P/L comprising Territory Goldfields NL and Buffalo Creek Mines NL. GBS Gold Australia Pty Ltd now has 100% ownership of the Burnside Joint Venture. The EL encompasses a suite of meta-sedimentary rocks that are part of the Pine Creek Orogen sequence and lies between the gold mining centres of Brocks Creek and Cosmo Howley. The joint venture has been actively exploring the Burnside region since its formation on 4 April 2002. Work to date has been focused on establishing gold resources from number of deposits and mining commenced in August 2006 from Brocks Creek, Rising Tide and Fountain Head to supply ore feed to the Union Reefs mill. During the reporting period, only a peripheral review of the previous work has been done due to emphasis on the development of Toms Gully, Cosmo Deeps and Maud Creek Projects. Continuing assessment and ranking of EL 23541 is ongoing within the GBS exploration team. The tenement is of significant importance with respect to its position within GBS's total tenement portfolio and within the sphere of its Burnside mining operations. Proposed future work would involve on-going review, field checking zones of previous anomalous geochemistry and geological significance and interpreting the geophysical aspects of the tenement and defining further drill targets. Newly acquired IKONIS satellite imagery will also be used to further enhance detailed program design and structural interpretation.