GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

June 19, 2008 09:16 ET

GBS Gold Divests Its Share Investment in MDN Inc.

TORONTO, ONTARIO--(Marketwire - June 19, 2008) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") has realized cash proceeds of C$7.6 million from the sale of its shareholding in MDN Inc. The decision to sell its financial investment is based upon GBS Gold's strategy to focus on continuing to grow production from its existing Australian operations and to divest assets which are no longer considered core to this strategy. The proceeds from the sale will be used to fund the Company's internal development projects. GBS Gold will continue to hold its investment in warrants of MDN Inc., which may be divested at a later date.

Mr. Gil Playford, Chairman of GBS Gold, commented "GBS Gold has decided to sell its shareholding in MDN Inc. as this investment is no longer part of the Company's strategy. The proceeds derived from the sale can be more effectively deployed to fund GBS Gold's internal growth projects, in particular the development of the large Cosmo Deeps gold deposit."

About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 2.5 million ounces of Indicated Resources and 1.6 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 Company's mineral resources comprise indicated resources of 22.5 million tonnes at 3.4g/t for 2.5 million ounces of contained gold and inferred resources of 20.3 million tonnes at 2.5g/t for 1.6 million ounces of contained gold as set out in its technical reports (refer below) and news release dated May 13, 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.

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.
    Ted Mayers, Executive Vice President, Business Development
    (416) 777-1508
    or
    In Perth, Australia:
    GBS Gold International Inc.
    Peter Kerr, Chief Financial Officer
    +61 8 9492 2500
    Email: gbs@gbsgold.ca
    Website: www.gbsgold.com