Annual exploration report Yam Creek/North Point Group year ending 31 December 2008

Abstract

The Yam Creek Group of tenements is located approximately 150km SSE of Darwin. It covers North Point, Princess Louise, Iron Blow and historical Yam Creek alluvial gold mining areas. The historic Yam Creek alluvial gold field was discovered in 1872. Gold mineralisation at North point and Princess Louise deposits occurs as quartz vein systems, hosted by structurally prepared sites within cyclic greywacke-mudstones of the Palaeoproterozoic Mount Bonnie Formation. Episodic gold production has been reported from underground as well processing of alluvial/elluvials cover material. The area has been the subject of modern gold exploration since the late 1970's. Exploration, post 1988 was managed by Northern Gold NL and its subsidiaries and Acacia Resources (AngloGold) subject to option agreement. Since the formation of the joint venture (Burnside Operations Pty Ltd) the North Point and Princess Louise areas have been subjected to RC drilling programs that were designed to prove up gold resources that could supplement mill feed for a full scale mining operation in the area. During the reporting period, data generated in 2007 campaign was evaluated and resources were estimated at North Point and Princess, which justified stand-alone mining operation in the project area. In addition, Iron Blow deposit was subjected a diamond drilling campaign. It included 6 diamond drill holes for a total of 1516.4 meters. 854 samples were retrieved and assayed for Au, Ag, As, Zn, Cu and Pb. All drill holes intersected significant areas of base metals and gold mineralisation. On 15 September 2008, GBS Gold Australia was declared under voluntarily administration, bringing all mining and exploration programs to halt. Currently, plans are afoot to re-structure the company and find a new investor, which may lead to full operational capacity. This will result in undertaking of exploration programs in 2009-10. A program of drilling and sampling is proposed to expand the resource inventory base or search for new areas of mineralisation within the Yam Creek Group of tenements.