Annual exploration report EL 24409 for the period ending 5 May 2009 Brocks South West, Burnside Project

Abstract

EL 24409 is one of the significant tenements amongst GBS Gold Australia's portfolio which is located SW of Brocks Creek project. It is approximately 150km SE of Darwin NT. EL 24409 was granted on 6 May 2005 and expires on 5 May 2011, covering 22.1 km2. It was granted to Buffalo Creek Mines Pty Ltd (50%) and Territory Goldfields NL (50%), which were part of the Burnside JV. During 2005, GBS successfully made a takeover bid for the JV through Northern Gold NL. Most of the tenement overlies the Burrell Creek Formation of the Finniss River Group. The southern 2 blocks are mapped as Mt Bonnie Formation sediments of the South Alligator Group. These rock units crop out sparsely in the tenement. The area has been explored by a number of companies which led to the identification of a number of anomalous gold zones. Exploration activity during the reporting period ended on 5 May 2009 was confined to a peripheral review of the tenement. A close proximity of this tenement to Zapopan (Brocks Creek) gold mine, favourable geological setting and geophysical signature require that potential of this tenement should be tested with dedicated exploration program. Particular area of interest is magnetically recessive eye-shaped structure bounded by magnetically highs (ridges). This type of feature is associated with gold mineralisation at Fountain Head and Glencoe deposits. These areas are marked by significant Au anomalies as shown by the previous exploration programs. In addition, project area also has potential for uranium and base metal mineralisation. In 2009-10 reporting year, project area will be explored for gold, uranium and base metals mineralisation. For this purpose, area identified during this review will undergo soil/rock chip sampling along with geological mapping. If encouraging results received, some RAB/RC drilling may also take place.