Annual exploration report ERL 97 Western Arm year ending 18 September 2009

Abstract

During 2008-09, company resources focused on the development of Chinese South (Big Pit), Toms Gully, Cosmo Deep and Maud Creek projects with a budget of tens of millions dollars. Chinese South 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. For this purpose, construction of a specialised circuit developed by GEOCOAT technology at Union Reefs treatment facility was under consideration. This technology would have the ability to process refractory ore with up to 90% gold recovery. 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'. GBS Gold regards ERL 97 highly due to its close proximity to the Cosmo-Chinese project and having significant high grade gold resource, which can increase substantially with further exploration. During the reporting period, technical review, tenement evaluation and ranking was undertaken in order to prepare all assets for sale. Other activities undertaken include: A reconnaissance visit; technical review of the tenement; planning for up-coming field season; and report writing and tenement management activities.