Annual exploration report MLNs 13, 1130, MCNs 317, 523, 1054, 1055, 4072, 4074 for period ending 15 July 2008 Pine Creek Group Burnside Project NT

Abstract

Mineral tenements MLN's 13, 1130, and MCN's 317, 523, 1054, 1055, 4072, 4074 forms the Pine Creek Group which is located approximately 220 km SE of Darwin NT, and around the western side of the Pine Creek township boundary. GBS Gold Australia acquired the tenement group in 2005 by a friendly take over of Northern Gold NL (50%) and Buffalo Creek Mines Pty Ltd (50%). Historically, the tenements have been the focus of alluvial and hard rock gold mining activity since 1869. More recently, Pine Creek Goldfields mined its flagship deposit 'Enterprise' until late 1994, producing 744,000oz Au from open pit operations. In August 2004 the Burnside JV purchased the Union Reefs mill, and an exploration programme began to outline potential ores for treatment at the Union Reefs mill. Initially, it involved data acquisition, and a drilling database review, followed by RC drilling. This allowed an update of the computer models showing residual mineralisation. The Czarina primary mineralisation was subjected to metallurgical testing that suggested only 70% recovery was achievable from the transition to fresh material. In January 2005, a Total Indicated and Inferred Resource of 1,844,559t at 1.72g/t Au for 102,062oz Au was outlined at Czarina, using a 1.0g/t Au cut-off. Drilling the down-plunge mineralised component at South Enterprise in November 2004 intersected the best mineralisation below the zone of oxidation, with recovery expected to be similar to Czarina. During the reporting period, an up-dated resource estimate of the Czarina deposit was generated by Geostat Services Pty Ltd to comply with CIM Definition Standards of Mineral Resources and Reserves. Current Indicated Mineral Resource above a cut-off of 0.7 g/t Au is 731,760 tonnes, grading 2.51 g/t Au for a total of 59,120 ounces Au, with the current Inferred Mineral Resource being 84,233 tonnes grading 2.36 g/t Au for 6,404 ounces. GBS Gold Australia is preparing a Mining Management Plan and proposing to drill 31 RC holes at the Kohinoor west mineralisation and 19 holes at the central and southern part of the Kohinoor prospect, located on MLN 13 and MCN 13. While most drill holes have been planned to further test the continuity of current mineralisation, holes have also been targeted to confirm boundary constraints or stike extensions. Several deeper holes have also been planned to target strike extensions of mineralisation at depth.