GBS Gold International Inc.

GBS Gold International Inc.

March 30, 2007 11:56 ET

GBS Gold International Inc.: $46 million Acquisition and Project Development Financing Facility Closed

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 30, 2007) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") is pleased to announce that it has today successfully closed its bought deal financing facility previously announced on March 14, 2007. The finance facility consists of 46,000 units placed by Haywood Securities Inc. ("Haywood") for total proceeds of $46 million (all amounts expressed herein are in Canadian dollars). Each unit consists of one $1,000 promissory note and 135 warrants where each warrant is exercisable for the purchase of one GBS Gold common share at $3.75 on or before September 29, 2008. The notes are for a term of two years with interest at an annual rate of 12% to be paid semi-annually. GBS Gold can prepay the finance facility, in full or in part, at any time after 12 months without penalty. The noteholders have received a pledge of security over substantially all of the assets of the Company with the exception of certain permitted security interests. Haywood received an agent's fee of 583,694 GBS Gold shares.

The proceeds of the finance facility will be used to fund the strategic acquisition of 8 million units in Northern Mining Explorations Ltd. at $1.20 per unit for a total cost of $9.6 million (refer news release dated March 14, 2007), pre-feasibility activities and development of the Cosmo Deeps and Maud Creek underground gold projects, and for general working capital purposes. The development of these two projects, coupled with positive results from recent exploration activities, enables GBS Gold to target an annualized production rate of 300,000oz of gold per year in 2009 at its Union Reefs Operations Centre in the Northern Territory of Australia. GBS Gold is implementing a strategy of staged growth towards becoming an intermediate sized gold producer.

About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 2.1Moz of Measured and Indicated Resources and 1.5Moz 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 and plans to ramp up production from free milling ores during 2007 to a targeted annualized rate of 150,000 ounces per year. The Company expects to 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 per year in 2009. Management has extensive experience in bringing mineral projects into production, operating open pit and underground gold mines and has assembled a team with valuable mining experience in the Northern Territory of Australia. 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 2,500km2 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".

On behalf of the Board of Directors

Gilbert Playford, Chairman and CEO

The securities being offered have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons without registration unless an exemption from registration is available. This news release does not constitute an offer for sale of securities in the United States.

The technical disclosure in this news release was approved by John Vinar, an employee of GBS Gold and a qualified person under National Instrument 43-101. 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 (collectively, the "Technical Reports"), and news releases filed on January 20, July 10, September 14, October 26, November 27 and December 13, 2006 and January 9, 2007, all of which may be viewed on the SEDAR website, The Company has not completed a feasibility study and there is no certainty that the 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, 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.
    Samuel Yik
    Vice President, Corporate Finance and Investor Relations
    (778) 328-9801