Annual report on EL 24150 AuQuest Project for period ending 24 January 2009

Abstract

EL 24150 is an important tenement amongst GBS Gold Australia's portfolio and is situated about 80 km east of Darwin and 28 km northwest of the Toms Gully Gold Mine. The EL is part of tenement package which the company acquired form the Renison Consolidated Mines Limited in 2007. It was granted on 25 January 2005 for a period of 6 years. The tenement comprises 22 blocks and covers 47.7 km2. EL 24150 is located within the Pine Creek Orogen, which has been interpreted as an intra-cratonic basin lying on an Archaean basement, and containing a 14 km thick sequence of Palaeoproterozoic sediments, accompanied by lesser volcanics, granitic plutons and dolerite intrusions. Predominant rocks exposed in the project area belong to the Wildman Siltstone, Koolpin Formation and Burrell Creek Formation. In places sills of the Zamu Dolerite may also be present. Much of the bed rock geology is obscured by thick black soil cover. During the reporting period, geological, geochemical and geophysical assessment of the project area was undertaken. Reporting period activities commenced with a literature survey in order to identify radiometric anomalies from the historical data. A few short reconnaissance visits of the project area were also undertaken. Close-spaced geophysical survey (magnetic and radiometric) was flown over the project area and data were processed and interpreted. Presence of northwest trending deep-seated fault structure points toward possible conduit/source for mineralising fluid. In addition, a few uranium anomalies were also identified with the help of newly obtained radiometric data. Proposed exploration program for the reporting period ending on 24 January 2010 will include soil/rock chip sampling and detail mapping of selected areas. In addition, processing and interpretation of EM data flown in late 2008 will be undertaken. If encouraging results received, it will lead to drilling. During the reporting period, geological, geochemical and geophysical assessment of the project area was undertaken. Reporting period activities commenced with a literature survey in order to identify radiometric anomalies from the historical data. A few short reconnaissance visits of the project area were also undertaken. Close-spaced geophysical survey (magnetic and radiometric) was flown over the project area and data were processed and interpreted. TMI image of the project area reveals a deep seated structure which runs form north-west to south-east, where it transects the Mt Bundy Granite. Toms Gully gold deposit is located on the edge of this structure where it intersects the granite body. It is highly likely that this deep seated structure could be a fault which might have acted as fluid conduit, emanating from the Mt Bundy Granite. It may also be noted that in EL 24150, another magnetic feature is present which intersects the prominent deep seated structure (fault) at a steep angle at the north-western edge of the tenement. This feature has been interpreted as a doleritic dyke which is significant for hosting gold mineralisation within the Pine Creek Orogen. It is recommended that entire strike length of confluence of deep seated structure (fault) and doleritic dyke should be tested by soil/rock chip sampling, followed by drilling. These anomalies are located within the Koolpin Formation and have been ear-marked for field checking in 2009. In addition, an airborne EM survey was flown over the project area in conjunction with Geoscience Australia in October/November 2008 at 333m line spacing. However, data have not been received so far and it is expected that processed data will be received in March or April 2009.