Annual exploration report EL 23540 for the period ending 16 February 2009 Saunders Creek, Burnside Project

Abstract

EL 23540 is one of the important tenements within GBS Gold Australia's portfolio, which is located east of the Yam Creek tenement group. EL 23540 was granted on 17 February 2003 and will expire on 16 February 2011. It comprises five blocks that cover approximately 16.1 km2. It forms part of the eastern boundary of tenement holdings comprising the Burnside Joint Venture and is registered in the names of Territory Goldfields NL and Buffalo Creek Mines NL in equal shares. It is unencumbered by third party tenements. The EL is dominated by the rocks of the Koolpin Formation along with Gerowie Tuff and intruded by dykes of the Zamu Dolerite. Towards east, the stratigraphic horizon is intruded by the Prices Springs Granite. Strata are tightly folded on NNW striking axes during the Barramundi Orogeny. The folds plunge shallowly to the NNW and locally in the centre of the tenement, and have undergone strike faulting perhaps as a result of axial failure. An appraisal of data during the reporting period has provided encouragement to explore the area aggressively. Geology of the area is characterised by the presence of the Koolpin Formation, Gerowie Tuff, which are folded and intruded by the Zamu Dolerite. This geological setting is considered highly prospective for gold and base metal mineralisation. This notion is further supported by the presence of strong magnetic anomalies which are again important feature for the presence of gold mineralisation. EL 23540 appears to be one of the important green field projects within GBS Gold Australia's portfolio. Proposed exploration program during the reporting period ended on 16 February 2010 include in-filling soil/rock chips samplings to determine the full potential of the area along with geological mapping. This will lead to RC drilling to check geophysical anomalies.