Annual exploration report EL 24051 Margaret River year ending 9 August 2009

Abstract

EL 24051 is one of the significant tenements among GBS Gold Australia's port folio and is located about 140 km SE of Darwin, and 22 km NE of Brocks Creek Mine Office, Northern Territory. The tenement was applied for on 9 October 2003 and was granted on 10 August 2004. The EL is registered in the names of Territory Goldfields NL and Buffalo Creek Mines NL in equal shares. GBS Gold Australia secured the tenement holders by a friendly takeover in 2005. Lithologies of the Finniss River Group (Burrell Creek Formation) form the major component of the project area, which are folded and faulted on north-west axial trend in parallel with the Pine Creek Shear Zone, a ductile high strain regional feature that is some 3 km wide. The Shear Zone occupies the south western sector of the exploration licence. Minor rocks of the Mount Bonnie Formation and Gerowie Tuff are also present. Prospectivity of the area is indicated by at least four gold prospects located within the project area. TMI image of the project area shows that prospective geological setting to host gold mineralisation is the characteristic feature of the project area. During the reporting period, project area was reviewed for the presence of uranium. EL 24051 is located towards NE of the Thunderball uranium prospect, and is probably intersected by the extension of Hays Creek Fault, which appears to have control over uranium mineralisation. Therefore, further exploration can delineate some area of additional mineralisation. GBS Gold Australia was declared under voluntary receivership in September 2008 and all assets including EL 24051 were placed under care and maintenance. Under the instructions of several Administrators (Ferrier Hodgson), all assets were prepared for sale including EL 24051. This required tenement ranking, evaluation and a peripheral review of the project. In the next reporting year, a program of geological mapping, geochemical sampling and possible Aircore/RAB drilling will be undertaken to fully assess the mineral potential of the area. In addition, Historical geophysical data will be re-processed and interpreted.