Annual exploration report MLN 1109, MLN 883 and AN 398 to 402 Union Reefs Gold Mine, year ending 31 December 2008

Abstract

The Union Reefs Group comprises 7 tenements (MLN 1109, MLN 833, ANs 398-402) and is located about 170 km SE of Darwin, NT and 12 km north of Pine Creek. Union Reefs Gold processing plant and related infrastructure is also located within MLN 1109. The site has been the main processing facility for GBS Gold Australia Pty Ltd since its inception. There are other tenements such as MLN 833 and AN 398-402 of small size, which are also included in this project for the purpose of group reporting. Production ceased on 27 July 2003 and following a period of negotiations, MLN 1109, along with the mine infrastructure and satellite tenements, were purchased by Buffalo Creek Mines P/L and Territory Goldfields NL in August 2004. The entities formed the Burnside Joint Venture (2002) which is now wholly controlled by GBS Gold Australia Pty Ltd. Geologically, the mining centre is situated within a 300m wide NW trending structural corridor (Pine Creek Shear Zone). The corridor comprises tightly folded and sheared pelitic to arenitic sediments of the Palaeoproterozoic Burrell Creek Formation and inliers of underlying Mt Bonnie Formation. Two sub parallel lines of historic gold workings comprise the focus for the array of open pits mined in recent years. With the re-commissioning of Union Reef mill in September 2006, GBS Gold focused on the treatment of gold ore from several projects such as Brocks Creek mine, supplemented from Fountain Head, Rising Tide and Chinese South deposits. Plans were prepared to develop projects such as Maud Creek and Cosmo Howley for mining. Gold ore mined from these projects would have been treated at Union Reefs. Moreover, Union Reefs gold plant was also planned to go through expansion. That would lead to building a circuit based on GEOCOAT technology, which would facilitate refractory ore treatment form Maud Creek. However, on 15 September 2008, GBS Gold Australia came under voluntarily receiverships and all mining and processing operations were place under care and maintenance. Currently efforts are under way to restructure the company and/or find a new investor to re-commence the mining and processing operations again.