GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

January 17, 2008 17:47 ET

GBS Gold Closes C$8 Million Private Placement Financing

TORONTO, ONTARIO--(Marketwire - Jan. 17, 2008) -

NOT FOR DISTRIBUTION TO US NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") reports that it has today completed its previously-announced C$8.1 million non-brokered private placement financing as planned. The private placement was announced in the Company's news release on December 20, 2007.

The proceeds of the placement will be used to fund the project capital required for the Tom's Gully gold operation. GBS Gold has started initial development activities at the Tom's Gully minesite, with targeted commencement of the underground operation in the middle of this year. Production is expected to build over two quarters to an average rate of 35,000-40,000 ounces per year.

The private placement consisted of 6 million Units at a price of C$1.35 per Unit. Each Unit consists of one common share and one-half share purchase warrant. Each whole warrant is exercisable into one common share for a period of 24 months from closing of the placement for a price of C$1.70 per warrant. The placement resulted in the issue of 6 million shares taking the total issued share capital of the Company to approximately 124.5 million shares, and the issue of 3 million warrants. All of the shares and warrants are subject to a hold period and cannot be traded for four months, except as permitted by Canadian securities legislation and the Toronto Stock Exchange.

About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 2.6Moz of Indicated Resources and 1.6Moz of Inferred Resources of gold at its Union Reefs Operations Centre located in historically productive goldfields 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 and Cosmo Deeps free-milling projects in 2008-09 and then construct a flotation plant and bio-oxidation heap leach facility using the GEOCOAT® technology at the Union Reefs plant to process refractory ores and increase gold production from all sources to a targeted annualized rate of 300,000 ounces in 2009-2010. The Union Reefs plant is adjacent to the main Stuart Highway and the transcontinental 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 and Canada. GBS Gold trades on the Toronto Stock Exchange under the symbol "GBS".

The Company's mineral resources comprise measured resources of 84,800 tonnes at 20.6g/t for 56,100 ounces of contained gold, indicated resources of 24.5 million tonnes at 3.2g/t for 2.6 million ounces of contained gold and inferred resources of 21.2 million tonnes at 2.4g/t for 1.6 million ounces of contained gold. The resource estimates are reported at a range of cut-off grades as set out in the technical report entitled "Independent Technical Review of the Burnside, Union Reefs, Pine Creek and Maud Creek Gold Projects, Northern Territory, Australia", dated effective October, 2005 and filed on January 5, 2006, an addendum technical report entitled "Addendum to the Technical Review of the Burnside Gold Project, Union Reefs Gold Project, Pine Creek Gold Project and Maud Creek Gold Project, Northern Territory, Australia - Resource Update, Maud Creek Gold Project" dated February 2006 and filed on February 8, 2006, the technical report entitled "Form 43-101 Technical Report on the Tom's Gully Project" dated and filed on January 14, 2008, and news releases filed on January 20, July 10, September 14, October 26, November 27 and December 13, 2006 and January 9, May 10 and December 18, 2007, all of which may be viewed on the SEDAR website, www.sedar.com. The Company has completed a feasibility study on the Tom's Gully Project and declared a probable mineral reserve estimate of 740,000 tonnes at 7.1g/t for 170,000 ounces of contained gold (refer the news release dated December 18, 2007). Other than the feasibility study completed on the Tom's Gully Project, the Company has not completed a feasibility study and there is no certainty that its projects 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.

The technical disclosures regarding the Tom's Gully resource estimate were approved by Paul Payne of Resource Evaluations Pty Ltd and regarding the Tom's Gully feasibility study and reserve estimate were approved by Heath Gerritsen of HG Mine Design Pty Ltd. Technical disclosures regarding GBS Gold's other properties and resources were approved by Peter Harris, a consultant to GBS Gold. Each of Messrs Payne, Gerritsen and Harris is a qualified person under National Instrument 43-101.

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.

The TSX does not accept responsibility for the adequacy or accuracy of the information contained herein.

Contact Information

  • In Toronto, Canada:
    GBS Gold International Inc.
    Marie Inkster
    Vice President, Finance
    (416) 777-1508
    or
    In Perth, Australia:
    GBS Gold International Inc.
    Peter Kerr, Chief Financial Officer
    +61 (0)8 9492 2500
    Email: gbs@gbsgold.ca
    Website: www.gbsgold.com