Annual exploration report MCN 4267 for the period ending 11 May 2009 Davies, Burnside Project

Abstract

MCN 4267 is a strategic tenement and is situated about 150 km southeast of Darwin and 500 m north of the Golden Dyke Open Pit. GBS Gold Australia acquired the tenement by friendly take over of Northern Gold NL in 2005. Here, gold mineralisation (Davies No. 1) is hosted by the Koolpin Formation and outlined by RC and diamond drilling. It has a 60 m strike length, averages 2m in width and is estimated at 49,000t at 2.58g Au/t. The deposit comprised of quartz vein system which is concordant and tabular. It is hosted by sulphidised carbonaceous shale that dips steeply west. During the reporting period, company resources remained focused in the development of projects such as Chinese South (Extension), Toms Gully and Cosmo Deeps projects with a budget of tens of million dollars. Chinese South (Extension) came on-line in April and Toms Gully commenced production in July 2008. At the same time significant progress was made in developing Maud Creek deposit with the targeted production of over 75 000 ounces of gold per year. However, on 15 September 2008, GBS Gold Australia was declared under voluntary receivership, and all exploration and mining projects were placed under 'Care and Maintenance'. Crocodile Gold Australia Pty Ltd, a subsidiary of Forbes Manhattan, has announced to acquire GBS Gold Australia's assets with the intention to commence gold production in an immediate future. Mineralisation contained within the project area is a strategic resource which will provide additional feed stock to the Union Reefs mill. There is a strong possibility that with further exploration, current resource might increase substantially. In the year 2009-10, the tenement will be ranked and, if possible a campaign of sampling and drilling will be carried out.