Annual exploration report MLN 766 and MLN 1060 Bridge Creek Group year ending 1 December 2008

Abstract

The Bridge Creek Project (MLN 766 and MLN 1060) is an integral part of GBS Gold Australia's port folio. It is located approximately 125 km SSE of Darwin and 35 km southeast of Adelaide River. The project is managed by the Burnside Operations P/L (Burnside), a subsidiary of GBS Gold Australia Pty Ltd. A joint venture agreement was formalised between Territory Goldfields NL (Northern Gold NL subsidiary) and Buffalo Creek Mines Pty Ltd (Harmony Gold Australia Ltd subsidiary) in April 2002. The JV merged certain mining assets within a 30km radius of the Brocks Creek mill and included the Bridge Creek tenements. Now the Burnside Operations P/L is wholly owned subsidiary of GBS Gold Australia. The tenements cover a sector of the Howley Anticline, approximately 12 km along strike north from the Cosmopolitan Howley Gold Mine. Gold mineralisation is hosted by the Koolpin Formation, Gerowie Tuff and partly by the Zamu Dolerite. Northern Gold NL explored the area with RC drilling, diamond drilling, resource modelling and metallurgical test work on the Bridge Creek primary resource that lies within the tenements. So far, a marginal resource of 584,000 t @ 1.81 g/t Au has been delineated. During the reporting period a limited exploration activity was carried out due to company focus on the development of Chinese South, Toms Gully, Maud Creek and Cosmo Deeps projects. Exploration activities included reconnaissance visits, data review, report preparation and tenement administration. The Bridge Creek project has been assigned a low-medium priority and with GBS Gold Australia's is being declared for voluntarily receivership, the project has further slipped down the ranking. However, there is a possibility that under the present circumstances where gold is holding well as compared to other commodities, an investor will come on-board and operations of the company will re-commence again. An exploration program for year 2009 will include re-evaluation of the project area.