Annual exploration report Howley Tenement Group Burnside Project NT period ending 31 December 2008

Abstract

The Cosmo-Big Pit area is the most significant project within GBS Gold Australia's port folio, which is located within the Howley group of tenements. This group of tenement is situated approximately 140km SSE of Darwin, NT. It comprises the southern section of the Howley Anticline, an economically important fold structure that hosts numerous historic gold mines and prospects. These include the important Cosmo Howley mine (Cosmo Deeps) and its satellites including the Phantom, Chinese No. 1, Chinese No. 2, Chinese South, Mottrams and Big Howley. Most have been the subject of historic underground and more recently, open pit mining. Territory Goldfields NL (a Northern Gold subsidiary) purchased the Howley group of tenements from Dominion in late 1994 and independently conducted exploration programs along the Howley Line until April 2002. On the formation of Burnside Joint Venture on 4 April 2002, all the tenements and related infrastructure in the area were merged under the management of Territory Goldfields NL and Buffalo Creek Mines, which are wholly owned subsidiaries of GBS Gold Australia. During reporting period, an extensive drilling campaign targeting gold and uranium mineralisation was undertaken. Work also concentrated on resource definition with infill drilling, assaying and density testing. During the reporting period, significant gold mineralisation was encountered during drilling in the Big Pit area which led to a new resource model. In the reporting year, 211 RC holes were drilled for 15209, targetting gold mineralisation. Geological modeling of the ore bodies in the project was under taken to better understand the mineralisation style. In addition, another drilling campaign by Thundelarra focused on delineating uranium mineralisation (7 RC drill holes for 512 meters). A radiometric survey was conducted and samples retrieved during drilling were assayed for uranium and base metals. During 2009 further infilling drilling will be carried out to supplement resource inventory. Samples retrieved during drilling programs will be analysed for gold and uranium. During the reporting year, another extensive drilling campaign was carious out to define gold resources in the Howley project area. Drilling campaign by GBS Gold Australia focused on the Chinese South and Chinese South Extended areas ('Big Pit') whereas Fleur De Lys, a uranium prospect, was also subjected to drilling campaign by JV partner (Thundelarra Exploration Pty Ltd). Drilling - Big Pit Area Chinese South area is now part of the Big Pit area which will also include all the historical and recent mines such as Big Howley, Chinese Howley, Chinese Pits 1, 2, 3 and Mottram.