Annual exploration report EL 23536 for period ending 28 July 2009 Mount Osborne

Abstract

EL 23536 is one of the significant tenements within GBS Gold Australia's port folio. It is located immediately south of the Burnside Project area and covers several mineral claims and part of MLN 1139. EL 23536 was granted on 29 July 2003 and expires on 28 July 2011. It was granted in equal shares to Buffalo Creek Mines Pty Ltd (50%) and Territory Goldfields NL (50%), which were part of the Burnside JV. The tenement overlies a sequence of Palaeoproterozoic meta-sediments ranging from South Alligator Group to Finniss River Group. Much of the area is covered by pre-existing titles (e.g ML 1139) which cover the South Alligator Group sediments, and the area covered by EL 23536 is mainly of the Burrell Creek Formation sediments of the Finniss River Group. In the northern part of the tenement, rocks of the Gerowie Tuff and Mount Bonnie Formation are also present. The sequence has been intruded by the Burnside Granite, a fractionated and oxidised body that is known to have been associated with gold mineralisation in the Pine Creek Orogen. During the reporting period data review showed potential of uranium mineralisation in the project area which led to identification of Lady Josephine prospect. A campaign of drilling, down-hole geophysical survey and assaying was undertaken. In September-October 2008, 7 RC holes were drilled for 349 metres. A total of 136 drill hole samples were retrieved and assayed for U, Cu, Pb(2), Zn, Bi, Co, Ni, As, Ag, Th and V. RC drilling intersected a sequence of interbedded siltstones and litharenites (probably tuffaceous greywackes) assigned to the Burrell Creek Formation. Moderate to strongly anomalous uranium (up to 160 ppm over 1m) was intersected in holes 08PCRC014 and 08PCRC017. Mineralisation appears to be related to hematitic joints and fractures above the base of partial oxidation. In un-oxidised rock joints were weakly chloritic and rarely pyritic. During 2009-10, exploration will continue to target the project area for uranium, gold and base metals. This will involve data interpretation, detail mapping of selected areas and additional drilling. A special emphasis will be placed on Lady Josephine prospect for extension of further uranium mineralisation.