Annual exploration report Rhodes Tenement Group MLN 414 to 418 year ending 31 December 2008

Abstract

Rhodes Group of tenements comprises MLNs 414-418, which contains Rhodes gold prospect, located 115km SE of Darwin and 3km NE of Mt Paqualin. Mineral Leases Northern 414 to 418 inclusive were granted to Peko Wallsend on the 8 February 1978. W.R. Grace Australia Ltd held an option over the tenements dating from an agreement of 8 July 1985 with Peko Wallsend. In 2002, Buffalo Creek Mines Pty Ltd and Territory Goldfield Pty Ltd (Burnside Operations Pty Ltd) acquired the tenements which became wholly owned subsidiaries of GBS Gold Australia Pty Ltd in 2005. The Rhodes gold prospect is considered a strategic gold resource of low to medium grade that has been drilled by previous explorers. Northern Gold estimated a non-JORC global resource of 700,000t @ 1.80g/t Au. After the tenements were incorporated into the Burnside JV in April 2002, Rhodes was ranked as a potential source of low grade mill feed due its close proximity to the Burnside Project area. During 2008, company resources remained focused in bringing on-line projects such as Toms Gully, Cosmo Deeps and Maud Creek. As a result, Rhodes project has been placed on low ranking and its exploration and development has been delayed. During the reporting period, only a peripheral review was undertaken along with reconnaissance visits, tenement administration, data integration and report writing. Currently, GBS Gold Australia is under voluntary receivership, but plans are afoot to re-structure the company which may lead to full operational capacity. This may lead to exploration activity in the project area. It will include ground-truthing, preliminary sampling and RC drilling if warranted.