Annual exploration report MCN 4267 for period ending 11 May 2008 Davies Burnside Project NT

Abstract

MCN 4267 is situated 150 km southeast of Darwin and 500 m north of the Golden Dyke Open Pit. GBS Gold Australia acquired the tenement by friendly take over of Northern Gold NL in 2005. A small resource of gold mineralisation (Davies No. 1) hosted by the Koolpin Formation and outlined by RC and diamond drilling. It has a 60m strike length, averages 2m in width and is estimated at 49,000t at 2.58g Au/t. The deposit comprised of quartz vein system which is concordant and tabular. It is hosted by sulphidised carbonaceous shale that dips steeply west. During the reporting period, a peripheral review of the tenement was undertaken in which potential and strategic significance of the tenement was identified. The tenement is located in one of the most fertile parts of the Pine Creek Orogen which is known to contain gold and base metals mineralisation. Recent drilling on the near-by Iron Blow deposit has provided significant encouragement for exploring all prospects in the area. However, during the reporting period, company resources focused in the development of Toms Gully, Cosmo Deeps and Maud Creek projects with a budget of 10's of millions of dollars. Toms Gully gold mine and treatment plant came into production on 25 July 2008 whereas Cosmo Deeps and Maud Creek projects are expected to come online in 2010 and 2011 respectively. During 2007-2008 work completed over MCN 4267 consisted of reconnaissance survey, planning for the upcoming field season and report preparation. During the coming year, company plans to drill-test high priority targets such as Mt Bonnie and Golden Dyke Dome, and therefore, this project will remain on ranking exercise with low priority.