Annual exploration report EL 23432 for period ending 8 May 2009 Hayes Creek North, Burnside Project

Abstract

EL 23432 is located about 140km SE of Darwin, Northern Territory, and 3km north of Hayes Creek roadhouse on the Stuart Highway. The tenement was granted to the Burnside Joint Venture, managed by Burnside Operations P/L comprising Territory Goldfields NL and Buffalo Creek Mines NL. These are the wholly owned subsidiaries of GBS Gold Australia Pty Ltd. Three of the six blocks were nominated for surrender before the anniversary of year two. The tenement overlies the Burrell Creek Formation of the Finniss River Group. East of the tenement is the Hayes Creek Fault, a major north east striking fracture system. The Burrell Creek Formation that forms high ground in the tenement occupies the axial zone of the fold. This is interpreted as a refolded syncline. South-east and South-west of the tenement, deformed and metamorphosed rocks of the South Alligator and Mount Partridge Groups are present, which are interbedded with the Zamu Dolerite. Review of previous geochemical and geophysical data identifies that the northern part of the tenement may have some potential for gold mineralisation. TMI image of the EL appears to be flat over most of the tenement area. However, northern part of the tenement is characterised by some magnetic ridges which could have significant structure for mineralisation. EL 23432 is of significant importance with respect to its position within GBS's total tenement portfolio and within the sphere of its Burnside mining operations. Proposed future work would involve field checking zones of previous anomalous geochemistry and geological significance and interpreting the geophysical and structural aspects of the tenement, and defining further drill targets. This will lead to RC/RAB drilling in the project area to fully assess the geochemical and geophysical targets.