Annual report on EL 23173 AuQuest Project Area for the period 4 March 2008 to 3 March 2009

Abstract

EL 23173 is located about 90 km east of Darwin and is an important asset within GBS Gold Australia's port folio. It was granted to Renison Consolidated Mines Limited on 4 March 2003 for a period of six years. It comprises 6 blocks and covers 11 km2. The tenement was renewed for another two years on 8 January 2009 and now will expire on 3 March 2011. Underlying cadastre is held by B.F Coulter PPL 1163. The tenement is located in the Pine Creek Orogen, where northern part of the project area contains the oldest sediments such as the Mount Partridge Group. It is unconformably overlain by the South Alligator Group, which comprises the Koolpin Formation, Mt Bonnie Formation and Gerowie Tuff. The southern portion of the project area is comprised of the Burrell Creek Formation, which conformably overlies the South Alligator Group. Tertiary and Quaternary Soils and Gravel's unconformably overlie all the lower lying portions of the tenement areas, generally referred to as Black Soils Regions. In the reporting period ended on 3 March 2009, an in-depth technical review of the project area was undertaken in conjunction with reconnaissance visit. This led to the identification of W-shaped radiometric anomalous area. Selective drilling (9 RAB drill holes for 291 metres) of the area revealed radioactive stratigraphic horizons dominated by the carbonaceous, graphitic siltstone/shales which belong to the Koolpin Formation. 4 rock chip samples were analysed for uranium, gold, iron and base metals. Assay results also indicated elevated levels of uranium, gold and iron. Exploration activity undertaken during the reporting year has established mineral potential (uranium, gold, iron ore) of the project area. In 2009-10, data collected so far will be reviewed and additional targets will be selected, which will be drill-tested. In addition, a detail geochemical sampling program will also be undertaken.