Annual report on EL 10382 AuQuest Project period ending 22 October 2008

Abstract

Exploration Licence 10382 is an important tenement in the Mt Bundy area. It is located about 90 SE of Darwin in a close proximity of Arnhem Highway near the Toms Gully Gold mine. The tenement was granted to Renison Consolidated Mines NL on 23 October 2003 and will expire on 22 October 2009. The tenement comprises 49 blocks covering 124 km2 and is located west of Tom's Gully. On 25 July 2007, GBS Gold Australia Pty Ltd acquired all tenements and Toms Gully gold mine held by Renison Consolidated Mines NL, including EL 22206 in the Toms Gully area, Northern Territory. The Northern portions of the project area contain the oldest sediments of the Wildman Siltstone which belong to the Mt Partridge Group. Here, the Mount Partridge Group that is unconformably overlain by the South Alligator Group (Mt Bonnie Formation Koolpin Formation and Gerowie Tuff), and comprises most of the tenement areas. The southern portion of the Project area is comprised of the Burrell Creek Formation, which conformably overlies the South Alligator Group. Tertiary and Quaternary Soils and Gravel's unconformably overlie all the lower lying portions of the tenement areas, generally referred to as 'Black Soils Regions'. An appraisal of previous geological and geochemical data shows a number of gold prospects and anomalies indicating significant gold potential of the project area. During the reporting period, the project area was flown by a high resolution airborne magnetic and radiometric survey. Processing and interpretation of the geophysical, geochemical and geochemical identified several gold and uranium anomalies. 27 RAB holes for drilled for 881 metres and 12 rock chip samples were collected which showed anomalous uranium values. During 2008-10, soil/rock rock chip sampling along the NW trending deep-seated structure is proposed. Section of the exposed stratigraphy will be mapped in detail. For uranium mineralisation, identified radiometric anomalies will be examined in the field further and ground radiometric survey will be conducted to assess the full potential of these anomalies. Some soil/rock chip samples will be taken for assaying. All the data gathered, so far, will be evaluated. On receiving some encouraging results from exploration activities, another campaign of RAB/RC will be conducted for gold and uranium mineralisation.