GBS Reports Record Second Quarter Gold Production
TORONTO, ONTARIO–(Marketwire – July 15, 2008) – GBS Gold International Inc. (TSX:GBS) (“GBS Gold” or the “Company”) is pleased to report record gold production during the second quarter from its Union Reefs Operations Centre in Australia’s Northern Territory (C$ represents Canadian dollars, A$ represents Australian dollars and US$ represents United States dollars):
__________________ ————————————————- ——- ________________________ June______March__ December__September________June ________________________ 2008______ 2008______ 2007______ 2007________2007 ______________________Quarter____Quarter____Quarter____Quarter__ Quarter(i) ——————————————————————– ——- Ore tonnes milled____ 622,100____433,100____316,300____317,400____ 450,200 Gold head grade (grams/tonne)________1.9 g/t____2.0 g/t____2.6 g/t____2.7 g/t____ 2.1 g/t Metallurgical
recovery________________93.1%______96.2%______95.8%______93.8%______ 94.4% Gold produced______ 35,259 oz__26,236 oz__25,590 oz__25,444 oz__ 29,058 oz Gold sold__________ 32,641 oz__27,244 oz__26,021 oz__23,787 oz__ 25,764 oz ——————————————————————– ——- (i) Commercial production commenced on April 1, 2007.
Gold production increased by 34% to 35,259 ounces for the June 2008 quarter from the milling of 622,100 tonnes of ore at an average head grade of 1.9 g/t and processing recovery of 93.1%. The higher throughput represents a 44% increase from the previous quarter reflecting improved utilization of the Union Reefs plant following commissioning of the second milling circuit. During the quarter, ore was sourced from the Brocks Creek underground mine, the Fountain Head and Chinese “big pit” area open pits, and from historic low- grade stockpiles.
Development work is progressing well at the Tom’s Gully mine site with the underground decline having been extended into the main Block 2 part of the orebody, and ore being stockpiled on surface for processing. Commissioning activities within the Tom’s Gully plant have commenced, with final “wet” commissioning expected towards the end of this month. Production will commence shortly thereafter, and is expected to increase over the balance of 2008. GBS Gold remains on track to meet its 2008 production guidance of 130,000 ounces.
During the June quarter, the Company sold 32,641 ounces of gold into the spot market for an average price of A$951/ounce (US$897/ ounce). Cash holdings currently total approximately C$20 million.
GBS Gold plans to release its second quarter financial results and MD&A on August 12, 2008.
Mr. Gil Playford, Chairman of GBS Gold, commented: “The significant increase in gold production in the second quarter reflects the operating strategy implemented earlier in the year to improve utilization of the existing capacity of the Union Reefs plant in order to maximize operating cashflows. We are targeting further capacity utilization increases and the results achieved to date are attributable to the excellent efforts of our staff and contractor personnel.”
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 3,500km(2) 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 Company’s mineral resources comprise indicated resources of 26.8 million tonnes at 3.1g/t for 2.7 million ounces of contained gold and inferred resources of 21.5 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.
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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