Annual exploration report on EL 23178 AuQuest Project Area year ending 7 March 2009

Abstract

EL 23178 is the most westerly tenement among the Toms Gully Group and is located some 70 kilometers south-east of Darwin. It was granted on 8th March 2005 to Renison Consolidate Mines. The tenement consists of 59 graticular blocks (184.6km2). On 25 July 2007, by virtue of an agreement, GBS Gold Australia Pty Ltd acquired all mining and exploration assets, located in the Toms Gully Region. The south western portion of EL 23178 contains the oldest sediments of the Mount Partridge Group that is unconformably overlain by the South Alligator Group, which covers small portions in the northern and southern parts of the tenement area. Much of the project area is comprised of Burrell Creek Formation, which conformably overlies the South Alligator Group. A high resolution geophysical (magnetic and radiometric) cover of EL 23178 was obtained which helped to undertake an in-depth technical review of the project area. It identified a moderate potential for gold and uranium potential in the area. EL 23178 is characterised by the presence of deep-seated structures that are the result of crustal disturbance in the Northern Australia. Radiometric image of the project area also shows significant anomalies which may be associated with uranium mineralisation. Most of the project area is covered by moderate to thick alluvial cover which hampers access to the bed rock geology. It is recommended that a campaign of Air Core/RC drilling campaign should be undertaken to test the anomalous areas. Soil and rock chip sampling program should target the areas which have been subjected to crustal disturbances. If encouraging results received then a campaign of deeper drilling should be undertaken to test the full potential of EL 23178.