Upgrade of GBS Gold’s Chinese Big Pit Resource Near the Cosmo Deeps Project
TORONTO, ONTARIO–(Marketwire – July 2, 2008) – GBS Gold International Inc. (TSX:GBS) (“GBS Gold” or the “Company”) is pleased to announce a significant expansion to the resource estimate for the Chinese “big pit” area within its Union Reefs Operations Centre in Australia’s Northern Territory:
– The resource estimate for the Chinese “big pit” area now comprises indicated resources of 7.2 million tonnes (“Mt”) at an average grade of 1.7 grams per tonne (“g/t”) for 387,000 ounces of contained gold, plus inferred resources of 2.9Mt at 1.6g/t for 151,000 ounces of contained gold.
– GBS Gold has recognized that the deposits in the Chinese “big pit” area form part of a larger continuous geological domain and mineralized system. The new consolidated resource estimate represents an increase of 234,000 ounces or 153% to the indicated resource classification and an increase of 68,000 ounces or 81% to the inferred classification.
– Open pit mining activities recently commenced within the Chinese area. The new resource model is now being optimized for mine planning purposes with GBS Gold expecting the mine designs to confirm the Chinese “big pit” area as a key open pit mining location for the next 1-2 years. The Chinese “big pit” area is located approximately 2km north of the Company’s Cosmo Deeps project (which contains indicated resources of 4.2Mt at 4.9g/t for 670,000 ounces and inferred resources of 4.5Mt at 3.9g/t for 570,000 ounces of contained gold). The Cosmo-Chinese area is planned to form a key mining centre for the future of the Company’s operations.
– Considerable exploration upside remains within the Chinese “big pit” area, near surface and at depth, and along strike to the south between the Cosmo Deeps deposit where minimal drilling has occurred.
– With the resource increase, GBS Gold’s total mineral resources now comprise indicated resources of 26.8Mt at 3.1g/t for 2.7 million ounces (“Moz”) of contained gold, plus inferred resources of 21.5Mt at 2.4g/t for 1.7Moz of contained gold.
Chinese Big Pit Area
The Chinese “big pit” area is located approximately 65km northwest of the Union Reefs plant, and about 2km northwest of the Cosmo Deeps project area. Gold mineralization is developed in the hinge zone and steeply dipping flanks of a shallow north-plunging anticline structure.
The extents of the new gold resource estimate are defined by a conceptual pit design known as the Chinese “big pit” with approximate dimensions of 3km in length and up to 450 metres in width. This conceptual pit perimeter encompasses various historic open pits known as Chinese 1, 2 and 3, Chinese South and Big Howley, which between 1985 and 1995 produced a combined total of approximately 1.8Mt at an average mined grade of 1.6g/t for 94,000 ounces of gold. The Chinese “big pit” area also incorporates GBS Gold’s previously reported Chinese South Extension and Mottrams deposits. In contrast to historic mining and previous resource evaluations where each deposit was treated separately, GBS Gold has recognized that these deposits form part of a larger continuous geological domain and mineralized system. As a result, a fully integrated resource model incorporating an extensive drillhole database has been completed.
Between March 2007 and February 2008, GBS Gold completed a total of 98 reverse circulation (RC) drillholes for a total distance drilled of approximately 9,300 metres at various points along the strike length of the resource. The results of this drilling were reported in the Company’s news releases on September 14, November 7 and December 3, 2007. This additional drilling, in conjunction with a more integrated resource modeling approach for the area, has demonstrated continuity of the mineralization over a strike length of 3km.
Updated Resource Estimate
The updated resource estimate for the Chinese “big pit” area was carried out by GBS Gold personnel and independent qualified persons based upon detailed geological and resource wireframes constraining the mineralization, with grade determination calculated using ordinary kriging and applying top-cut grades ranging from 2-40 g/t gold depending on the characteristics of the particular domain modelled. The resource estimate now comprises:
________________________________ ———————————– —— ______________________________________________ Chinese Big Pit Area ________________________________________ Resource Estimate – July 2008 ______________________________________(Reported at a 1.0g/t cut-off grade) ——————______________ ———————————– —— Resource Category__________________ Tonnes________Grade (g/t)______ Ounces ——————______________ ———————————– —— Indicated________________________7,195,000______________ 1.7______ 387,000 Inferred________________________ 2,866,000______________ 1.6______ 151,000 ——————______________ ———————————– ——
In total, the drillhole database comprises over 1,600 RC drillholes and over 92,000 assay results. Most of the strike length has been drilled on 20 metre spaced sections. A reporting cut-off grade of 1.0g/t is used as this is consistent with the current mining cut-off grade for this area. The percentage of inferred material in the total resource estimate reflects the drilling density and amount of extrapolation undertaken within the resource estimation methodology.
Change from Previous Resource Estimates
The Chinese “big pit” area resource estimate formerly incorporated only the Chinese South Extension and Mottrams deposits, which were previously modelled as discrete zones of mineralization, and comprised the following:
________________________________ ———————————– —— ______________________________________________ Chinese Big Pit Area ____________________________________________ Resource Estimate – 2007 ______________________________________(Reported at a 0.7g/t cut-off grade) ——————______________ ———————————– —— Resource Category__________________ Tonnes________Grade (g/t)______ Ounces ——————______________ ———————————– —— Indicated________________________2,942,000______________ 1.6______ 152,800 Inferred________________________ 1,658,000______________ 1.6________83,200 ——————______________ ———————————– ——
The new resource estimate represents a significant increase in contained gold content to the previous 2007 estimate of approximately 234,000 ounces in the indicated category (an increase of 153%) and approximately 68,000 ounces in the inferred category (an increase of 81%).
GBS Gold is continuing various drilling programs within the Chinese “big pit” area in order to further upgrade the existing resource and to test the southern and northern strike extensions. The Company’s objective is to expand the current open pit mining operations through the creation of a single or several large open pit mine(s) in the area. Given the positive results of the drilling programs and resource upgrades achieved to date, the zone is considered by GBS Gold to have good potential to host a large open pit or a number of pits which, in conjunction with the nearby Cosmo Deeps underground project, would enable the Cosmo-Chinese area to be a long term mining centre and ore source for the Union Reefs Operations Centre. The following diagram is an aerial plan view of the Chinese “big pit” area depicting the modelled strike length of the mineralized structures, the two initial open pits currently being mined, and the targeted areas for future drilling:
To view a map of the Cosmo-Chinese Gold Resource, please visit the following link: http://media3.marketwire.com/docs/ CosmoChinese.pdf.
Environmental permits have already been granted for the development of the initial parts of the Chinese “big pit” deposit and open pit mining operations based on separate pits for the Chinese South Extension and Mottrams deposits have already commenced. Enlarged open pit optimizations based on the new integrated resource model are envisaged. However, as the “big pit” plan is currently in a conceptual phase, there is no certainty that the deposit will be mined in its entirety as one large open pit mining operation.
The Chinese mineralized corridor is open-ended in the direction of the large Cosmo Deeps gold deposit which is located approximately 2km to the south. There is virtually no effective historic drilling in this gap. Future exploration drilling within this gap will target both near-surface and deeper mineralization which may be associated with the northern extensions of the Cosmo Deeps gold system. Conceptual geological modeling has also highlighted the possibility of continuations of the Cosmo Deeps gold system directly beneath the Chinese “big pit” area. The following diagram illustrates the integrated Cosmo-Chinese model and shows target zones that will be tested in future exploration drilling:
To view a map of the Diagrammatic Cosmo-Chinese longitudinal section, please visit the following link: http:// media3.marketwire.com/docs/CosmoChineseFigure2.pdf.
With the update to the Chinese “big pit” area resource estimate, GBS Gold’s total mineral resource base now comprises indicated resources of 26.8Mt at 3.1g/t for 2.7Moz of contained gold and inferred resources of 21.5Mt at 2.4g/t for 1.7Moz of contained gold.
About GBS Gold International Inc.
GBS Gold is an emerging gold producer with 2.7 million ounces of Indicated Resources and 1.7 million ounces of Inferred Resources of gold at its Union Reefs Operations Centre located in the Northern Territory of Australia. GBS Gold produces gold through its modern dual-mill 2.5Mtpa Union Reefs processing plant. The Company expects to commence production at its Tom’s Gully operation in 2008 and at its Cosmo Deeps operation in 2010 to increase production to an annualized rate of 250,000 ounces, and to subsequently commence production from the Maud Creek refractory gold project to further increase gold production from the Union Reefs Operations Centre to 300,000 ounces per year. The Union Reefs plant is adjacent to the main Stuart Highway and the trans-continental Adelaide-Darwin railway line, and is on the Northern Territory power grid. Within 125km trucking distance of the Union Reefs plant, GBS Gold has consolidated over 3,500km2 of prospective tenements and gold deposits and also holds gold exploration properties in Western Australia. GBS Gold trades on the Toronto Stock Exchange under the symbol “GBS”.
The technical disclosures in this news release regarding the updated resource estimate for the Chinese “big pit” area were approved by Alf Gillman (F.AusIMM, CP Geol), an employee of GBS Gold and a qualified person in accordance with National Instrument 43- 101.
The Company’s mineral resources comprise indicated resources of 26.9 million tonnes at 3.1g/t for 2.7 million ounces of contained gold and inferred resources of 21.6 million tonnes at 2.4g/t for 1.7 million ounces of contained gold as set out in its technical reports (refer below) and news releases dated May 13 and July 2, 2008. The Company has filed on May 8, 2008 a technical report entitled “GBS Gold International: Burnside, Union Reefs, Maud Creek and Moline Projects, Northern Territory, Australia” dated February 2008 and authored by Jeames McKibben and Christine Standing of Snowden Mining Industry Consultants Pty Ltd and Heath Gerritsen of HG Mine Design Pty Ltd. The Company has also filed two technical reports on its Tom’s Gully project being a technical report entitled “Form 43-101 Technical Report on the Tom’s Gully Project” authored by Paul Payne of Resource Evaluations Pty Ltd dated and filed on January 14, 2008 and a technical report entitled “Technical Report on the Mineral Reserves of the Tom’s Gully Gold Mine” authored by Heath Gerritsen of HG Mine Design Pty Ltd dated December 2007 and filed on January 31, 2008.
The Company has completed feasibility studies on its Tom’s Gully and Cosmo Deeps projects, and a life-of-mine study on its operating Brocks Creek underground mine, all of which have declared mineral reserves in accordance with the above technical reports. Where the Company has not completed a feasibility or life of mine study on a particular project, there is no certainty that such project will be economically successful. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Any potential updates to GBS Gold’s mineral resources discussed in this news release are conceptual in nature and subject to further drilling, analytical and test work and/or data verification. All estimates of updates to mineral resources are based on the drilling results and resource modeling described herein.
GBS Gold manages its drilling and assaying activities in accordance with industry standard quality assurance/quality control (QA/QC) procedures. Samples are collected by GBS Gold personnel and prepared in accordance with specified procedures at the relevant assay laboratories. The primary assay laboratory is North Australian Laboratories in Pine Creek, Northern Territory. Laboratory site reviews are undertaken. Assay QA/QC involves the use of assay standards (sourced from reputable suppliers and cross-checked through umpire laboratories), field duplicates, blanks and barren quartz flushes. A third party “umpire” laboratory is used to cross- check and validate approximately 5% of the assay results. Sample coarse rejects are retained and approximately 5% of samples are re- submitted for further assay verification. All sample pulps, half- core and rock-chip samples are retained at site.
Certain disclosures in this release, including management’s assessment of GBS Gold’s plans and projects, constitute forward- looking statements that are subject to numerous risks, uncertainties and other factors relating to GBS Gold’s operation as a mineral development company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. The following are important factors that could cause the Company’s actual results to differ materially from those expressed or implied by such forward looking statements: fluctuations in gold prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; general market conditions; the uncertainty of future profitability; and the uncertainty of access to additional capital. Full descriptions of these risks can be found in the Company’s Annual Information Form available on the SEDAR website, www.sedar.com. Readers are cautioned not to place undue reliance on forward-looking statements. GBS Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
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