GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

October 15, 2008 19:17 ET

Company Update

TORONTO, ONTARIO--(Marketwire - Oct. 15, 2008) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") reports that the Administrators appointed by its Australian subsidiaries have been granted a 45 business day extension to the period for holding the second creditors' meeting by the Australian courts. The extension was required so that parties interested in proposing a Deed of Company Arrangement ("DOCA") have sufficient time to conduct their due diligence and, if interested, structure a DOCA proposal. The Administrators have engaged Prime Corporate Finance, an Australian-based advisory firm specializing in mining transactions of similar size and scope, to facilitate the preparation of an information memorandum, an online data room and management of the expressions of interest received. As of October 10, 2008, 28 expressions of interest in various businesses and assets have been received and due diligence investigations will commence shortly. The second creditors' meeting is now scheduled take place to place prior to December 23, 2008.

Due to the extended timeframe required, the Company has decided not to appeal the decision of the Toronto Stock Exchange to delist the common shares of the Company on October 29, 2008 but will instead apply to have its common shares listed for trading on the NEX Exchange - an exchange of the TSX Venture Exchange designed for companies undergoing recapitalizations and restructurings - with the aim of starting trading on October 29, 2008.

To better manage costs during the Company's restructuring, the Company has taken a number of measures including terminating the Company's Long Term Incentive Policy, closing its office in Toronto and, if and when the Company's shares are listed on the NEX, reducing the number of directors to 4. The Company will manage its affairs from its office in Perth, Australia.

About GBS Gold International Inc.

GBS Gold has 2.7 million ounces of Indicated Resources and 1.7 million ounces of Inferred Resources within 125 km radius of its 2.5Mtpa Union Reefs processing plant located in the Northern Territory of Australia including the Cosmo Deeps project. The Company trades on the Toronto Stock Exchange under the symbol "GBS". The value of GBS shares is uncertain pending the outcome of the administration process and the recapitalization of the Company.

For more information about GBS Gold International Inc., please visit our website at www.gbsgold.com or email us at gbs@gbsgold.ca.

For further information regarding the Australian subsidiaries, the conduct of the Australian business or to discuss the administration process, the Administrators may be contacted at the following:



Administrator:
--------------
Mr. Andrew Saker
Partner, Ferrier Hodgson
Joint and Several Administrator
Level 26, 108 St George's Terrace
Perth, Western Australia, 6000, AUSTRALIA
Tel: +61 (0)8 9214 1444
Fax: +61 (0)8 9214 1400
Website: www.ferrierhodgson.com
Email: fhperth@perth.fh.com.au


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.

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

Contact Information

  • GBS Gold International Inc.
    Gil Playford
    Chairman and CEO
    (931) 358-2170
    Email: gbs@gbsgold.ca
    Website: www.gbsgold.com
    or
    GBS Australia Pty Ltd (administrator appointed)
    Peter Kerr
    Chief Financial Officer
    +61 (0)8 9492 2500