GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

October 26, 2006 08:00 ET

GBS Gold International Inc.: New Drilling Results at Union Reefs-Fountain Head Deposit

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 26, 2006) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") is pleased to announce new drilling results for the Fountain Head gold deposit at its Union Reefs Operations Centre in the Northern Territory of Australia. Highlights include:

- Drilling at the Fountain Head gold deposit has intersected a significant new zone of continuous mineralization. The drilling has defined a strike length for the new zone of at least 250 metres comprising three lode zones, all of which are open along strike to the east. Drilling results returned to date include the following key intersections:



17 metres @ 4.4 g/t gold from 42 metres downhole
6 metres @ 5.0 g/t gold from 64 metres downhole
20 metres @ 3.6 g/t gold from 17 metres downhole
16 metres @ 2.4 g/t gold from 7 metres downhole
42 metres @ 2.2 g/t gold from 48 metres downhole
29 metres @ 4.8 g/t gold from 79 metres downhole
10 metres @ 3.2 g/t gold from 100 metres downhole


The newly identified zone of mineralization is expected to significantly expand the Fountain Head resource and result in substantially larger tonnages from the open pit mine.

- Mining activities have commenced at the Union Reefs Operations Centre with initial ore being sourced from the Brocks Creek underground mine and the Rising Tide open pit deposit. Site clearing activities have commenced at Fountain Head, and the combined output of these three mines is targeted to increase gold production to an annualized rate of 150,000 ounces in 2007.

- Prior to this recent drilling, the resource estimate for the Fountain Head open pit deposit was increased to comprise indicated resources of 769,000 tonnes at 1.9 grams per tonne (g/t) for 47,600 ounces of contained gold, plus inferred resources of 359,000 tonnes at 1.8g/t for 21,000 ounces of contained gold. This estimate includes the drilling results announced on July 10, 2006 but does not include the results in this announcement. Work to update the Fountain Head resource estimate with these new drilling results is being fast-tracked for release in the current quarter.

- Further drilling is continuing at Fountain Head to test the strike extents of the identified mineralization. Drilling is also planned to test similar stratigraphic units elsewhere within the local geological structure. GBS Gold is also continuing exploration at various of its other deposits, including Chinese Howley, Cosmo Deeps, Moline and Maud Creek.

- GBS Gold's total gold resource base comprises measured and indicated resources of 17.8Mt at 3.4g/t for 1.9 million ounces of contained gold, and inferred resources of 21.0Mt at 2.4g/t for 1.6 million ounces of contained gold.

Fountain Head Deposit - New Drilling Results

The Fountain Head gold deposit is located approximately 60 kilometres north of the Union Reefs processing plant. The deposit will be mined as an open pit with initial mining activities imminent.

To view the Fountain Head Deposit area map, please click the following link: http://www.ccnmatthews.com/docs/fhd1.jpg

Following successful resource definition drilling completed earlier this year at Fountain Head, GBS Gold commenced a program to test for adjacent southerly lode repeats. This program has successfully intersected a new zone of continuous mineralization defining a strike length of at least 250 metres with three significant lode zones, all of which are open along strike to the east. The following plan view shows the location of the Fountain Head gold deposit and the drillholes announced in this news release: To view please click http://www.ccnmatthews.com/docs/fhd2.jpg

The drilling results are tabulated fully in Attachment 1. True thickness is equivalent to approximately 80% of the downhole drill intervals. Following three initial drillholes which were directed to the north (FHRC series), a diamond core drillhole (FHRD057) was completed confirming the vein orientation. All subsequent drillholes (THRC series) were drilled to the south, approximately perpendicular to the vein dip. The following cross-section of the identified mineralization demonstrates the attractive width and tenor of the results: To view please click http://www.ccnmatthews.com/docs/fhd3.jpg

Further drilling is now underway to test the eastern and western strike extents of the identified mineralization. Drilling is also planned to test similar stratigraphic units elsewhere within the Fountain Head geological structure, which also have the potential to host lode repeats.

Fountain Head Deposit -- Updated Resource Estimate

Based upon infill drilling completed earlier this year (refer to the news release dated July 10, 2006), the resource estimate for the Fountain Head gold deposit has been increased to comprise indicated resources of 769,000 tonnes at 1.9g/t for 47,600 ounces of contained gold, plus inferred resources of 359,000 tonnes at 1.8g/t for 21,000 ounces of contained gold as tabulated below. This estimate does not incorporate the drilling results announced above.



-----------------------------------
Previous Resource Estimate
(Reported at a 1.0g/t cut-off grade)
----------------- -----------------------------------
Resource Category Tonnes Grade (g/t) Ounces
----------------- -----------------------------------
Indicated 172,000 3.0 16,400
Inferred 432,000 2.5 34,600
----------------- -----------------------------------

-----------------------------------
Updated Resource Estimate
(Reported at a 0.7g/t cut-off grade)
----------------- -----------------------------------
Resource Category Tonnes Grade (g/t) Ounces
----------------- -----------------------------------
Indicated 769,000 1.9 47,600
Inferred 359,000 1.8 21,000
----------------- -----------------------------------


The resource estimate has been modelled based on detailed wireframes for each of the Fountain Head mineralized lodes, with grade determination calculated using ordinary blocked kriging with top-cut grades in the range 4-40g/t depending on the particular lode modelled.

Work is now being fast-tracked to incorporate the new drilling results into the Fountain Head resource model. An updated resource statement is expected to be released in the current quarter.

Resource Updates

The Fountain Head resource increase is another of a continuing number of updates to GBS Gold's open pit resource estimates following successful resource definition drilling programs completed earlier this year. GBS Gold is continuing exploration at other deposits, including Chinese Howley, Cosmo Deeps, Moline and Maud Creek. Further resource updates for Fountain Head, Cosmo Deeps, Princess Louise, North Point, Chinese South Extension and Mottrams are expected in due course.

Total Gold Resource Base

GBS Gold's measured and indicated resources total 17.8Mt at 3.4g/t for 1.9 million ounces of contained gold, and inferred resources total 21.0Mt at 2.4g/t for 1.6 million ounces of contained gold as tabulated below. The resource estimates are reported at a range of cut-off grades as set out in the Technical Reports and subsequent news releases (refer the table source note below).



--------------------------------------------------------------------------
Deposit(s) Measured Indicated
Resources Resources
---------------------------------------------------
Tonnes Grade Ounces Tonnes Grade Ounces
(million) (g/t) ('000) (million) (g/t) ('000)
--------------------------------------------------------------------------
Free-milling deposits:
Cosmo Deeps 4.0 4.7 603
Brocks Creek U/G mine 0.1 20.6 56 0.2 16.2 94
Open Pits 4.3 1.8 246
-----------------------------------------------
0.1 20.6 56 8.4 3.5 943
Refractory deposits:
Maud Creek 9.3 3.1 935
-----------------------------------------------
TOTAL 0.1 20.6 56 17.7 3.3 1,878
--------------------------------------------------------------------------
--------------------------------------------------------------------------


--------------------------------------------------------------------------
Deposit(s) Measured & Indicated Inferred Resources
Resources
---------------------------------------------------
Tonnes Grade Ounces Tonnes Grade Ounces
(million) (g/t) ('000) (million) (g/t) ('000)
--------------------------------------------------------------------------
Free-milling deposits:
Cosmo Deeps 4.0 4.7 603 5.7 3.5 637
Brocks Creek
U/G mine 0.3 17.6 150 0.1 5.1 23
Open Pits 4.3 1.8 246 14.1 1.9 840
-----------------------------------------------
8.5 3.6 999 20.0 2.3 1,500
Refractory deposits:
Maud Creek 9.3 3.1 935 1.1 2.4 82
-----------------------------------------------
TOTAL 17.8 3.4 1,934 21.0 2.4 1,582
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Note: All totals include 100% of the Burnside Joint Venture, now
wholly-owned by GBS Gold.

Source: Technical Reports, subsequent news releases filed on SEDAR on
January 20, July 10 and September 14, 2006, and this news release.


About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 1.9Moz of Measured and 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 and plans to ramp up production from free milling ores to a targeted rate of 150,000 ounces per annum during 2007. The Company expects to construct a flotation plant and bio-oxidation heap leach facility using the GEOCOAT® process at Union Reefs to treat refractory ores and produce gold at a targeted rate of 250,000 ounces per annum from both ore types at a targeted cash cost of approximately US$300 per ounce in 2008. 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 has no hedging commitments, no existing bank debt and sufficient cash to meet its short term production objectives. GBS Gold trades on the Toronto Stock Exchange under the symbol "GBS".

Note

The drilling results and mineral resource estimates detailed in this news released were prepared by or under the supervision of Mr Peter Harris, B.Sc(Geol), M.AIG, the Chief Geologist of GBS Gold and a qualified person for the purposes of National Instrument 43-101.

GBS Gold manages its drilling and assaying activities in accordance with industry standard quality assurance/quality control (QA/QC) procedures. Samples are collected by GBS Gold personnel and prepared in accordance with specified procedures at the relevant assay laboratories. The primary assay laboratory is North Australia Laboratories in Pine Creek, Northern Territory. Laboratory site reviews are undertaken. Assay QA/QC involves the use of assay standards (sourced from reputable suppliers and cross-checked through umpire laboratories), field duplicates, blanks and barren quartz flushes. A third party "umpire" laboratory (Amdel in Perth, Western Australia) is used to cross-check and validate approximately 5% of the assay results. Sample coarse rejects are retained and approximately 5% of samples are re-submitted for further assay verification. All sample pulps, half-core and rock-chip samples are retained at site.

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. A summary of the geology, mineralization, drilling, sampling and analytical and test procedures for the mineral properties can be found in the October 2005 independent technical report entitled "Independent Technical Review of the Burnside, Union Reefs, Pine Creek and Maud Creek Gold Projects, Northern Territory, Australia" filed on January 5, 2006 and the February 2006 independent technical report entitled "Addendum to the Technical Report entitled Independent Technical Review of the Burnside, Union Reefs, Pine Creek and Maud Creek Gold Projects, Northern Territory, Australia -Resource Update, Maud Creek Gold Project" filed on February 10, 2006 (together the "Technical Reports"). The Technical Reports may be viewed on the SEDAR website at www.sedar.com.

On behalf of the Board of Directors

Gilbert Playford, Chairman and CEO

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, 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.



Fountain Head
Drilling Results

---------------------------------------------------------------------------
Grid Co-ordinates Survey Data Intersections
------------------------------------------------------------------
Azi- Int- Gr-
Hole No. Local Local RL muth Dip Depth From To er- ade
Grid Grid (deg- (deg- val (g/t
Easting Northing (m) rees) rees) (m) (m) (m) (m) Au)
---------------------------------------------------------------------------
FHRC040 9716 9858 105 1 -55 69.0 23.0 24.0 1.0 1.2
28.0 56.0 28.0 1.9
54.0 56.0 2.0 1.1
61.0 67.0 6.0 2.5
---------------------------------------------------------------------------
FHRC041 9688 9886 105 0 -52 99.0 2.0 3.0 1.0 1.1
7.0 8.0 2.0 1.0
14.0 24.0 10.0 2.2
38.0 39.0 2.0 1.7
42.0 59.0 17.0 4.4
64.0 70.0 6.0 5.0
93.0 94.0 1.0 1.7
---------------------------------------------------------------------------
FHRC050 9753 9858 105 2 -50 144.0 0.0 3.0 3.0 2.2
6.0 14.0 8.0 0.9
17.0 37.0 20.0 3.6
46.0 54.0 8.0 2.0
82.0 83.0 1.0 3.9
99.0 100.0 1.0 1.1
116.0 117.0 1.0 1.7
---------------------------------------------------------------------------
FHRD057 9752.828 9855.196 1105.231 34 -60 183.0 4.7 5.4 0.7 2.7
7.0 9.7 2.7 2.9
35.5 37.3 1.8 1.7
43.8 46.0 2.2 1.0
47.9 48.4 0.5 3.8
49.5 50.0 0.5 3.1
52.8 56.3 3.6 1.2
70.3 83.0 12.7 1.3
84.6 85.0 0.4 2.2
86.3 86.8 0.5 2.4
89.5 90.4 0.9 1.1
95.1 100.2 5.1 2.7
102.9 107.4 4.5 1.3
116.6 118.3 1.7 1.2
124.7 125.8 1.1 3.5
137.6 137.9 0.3 1.9
---------------------------------------------------------------------------
THRC001 9687.707 9934.596 109.694 180 -68 112.0 44.0 52.0 8.0 3.7
57.0 58.0 1.0 3.7
62.0 63.0 1.0 1.1
75.0 76.0 1.0 1.2
94.0 95.0 1.0 8.2
---------------------------------------------------------------------------
THRC002 9688.076 9917.483 108.133 180 -70 88.0 35.0 36.0 1.0 1.8
42.0 46.0 4.0 1.2
49.0 50.0 1.0 1.6
54.0 57.0 3.0 4.1
82.0 83.0 1.0 4.4
---------------------------------------------------------------------------
THRC003 9688.107 9898.975 107.441 180 -63 74.0 7.0 23.0 16.0 2.4
41.0 42.0 1.0 1.1
71.0 73.0 2.0 1.4
---------------------------------------------------------------------------
THRC004 9687.894 9886.697 106.923 180 -62 64.0 0.0 2.0 2.0 1.2
14.0 15.0 1.0 1.1
21.0 22.0 1.0 1.1
---------------------------------------------------------------------------
THRC005 9715.932 9937.364 110.06 180 -72 46.0 11.0 12.0 1.0 1.2
---------------------------------------------------------------------------
THRC006 9715.988 9921.152 108.782 180 -62 100.0 48.0 49.0 1.0 2.0
51.0 52.0 1.0 1.3
59.0 68.0 9.0 2.6
85.0 87.0 2.0 2.0
---------------------------------------------------------------------------
THRC007 9715.932 9893.344 108.177 180 -61 90.0 9.0 11.0 2.0 2.1
17.0 24.0 7.0 1.8
27.0 28.0 1.0 2.9
31.0 32.0 1.0 2.7
36.0 43.0 7.0 2.4
69.0 70.0 1.0 3.3
80.0 81.0 1.0 1.5
---------------------------------------------------------------------------
THRC008 9752.002 9917.712 109.479 180 -69 112.0 66.0 69.0 3.0 1.2
71.0 82.0 11.0 2.0
86.0 88.0 2.0 1.2
93.0 94.0 1.0 2.1
---------------------------------------------------------------------------
THRC009 9752.537 9894.703 108.769 180 -66 106.0 50.0 51.0 1.0 1.5
54.0 69.0 15.0 1.8
---------------------------------------------------------------------------
THRC010 9753.025 9866.411 106.416 180 -61 94.0 8.0 14.0 6.0 1.9
17.0 18.0 1.0 1.0
20.0 24.0 4.0 1.1
27.0 34.0 7.0 2.0
53.0 56.0 3.0 1.0
71.0 72.0 1.0 2.1
---------------------------------------------------------------------------
THRC011 9656.811 9939.417 109.8 178 -61 148.0 29.0 32.0 3.0 1.9
36.0 38.0 2.0 1.2
49.0 61.0 12.0 2.6
---------------------------------------------------------------------------
THRC012 9655.53 9920.215 108.505 180 -61 106.0 44.0 45.0 1.0 3.0
48.0 49.0 1.0 1.6
---------------------------------------------------------------------------
THRC013 9655.435 9903.555 108.518 179 -59 58.0 19.0 20.0 1.0 1.1
---------------------------------------------------------------------------
THRC032 9786.82 9881.664 107.087 179 -65 130.0 48.0 90.0 42.0 2.2
---------------------------------------------------------------------------
THRC035 9809.891 9864.409 107.851 180 -60 106.0 54.0 69.0 15.0 1.7
74.0 77.0 3.0 1.1
---------------------------------------------------------------------------
THRC036 9809.966 9893.558 109.147 178 -59 142.0 79.0 108.00 29.0 4.8
112.0 117.0 5.0 2.6
---------------------------------------------------------------------------
THRC037 9829.735 9822.067 107.041 178 -57 100.0 0.0 2.0 2.0 3.4
35.0 40.0 5.0 2.6
46.0 48.0 2.0 2.1
52.0 56.0 4.0 1.7
---------------------------------------------------------------------------
THRC038 9830.101 9849.889 107.587 176 -62 124.0 61.0 62.0 1.0 1.4
64.0 65.0 1.0 1.7
70.0 71.0 1.0 4.5
79.0 80.0 1.0 1.1
86.0 87.0 1.0 2.4
---------------------------------------------------------------------------
THRC039 9829.998 9873.629 107.98 179 -59 136.0 74.0 84.0 10.0 2.9
87.0 90.0 3.0 3.0
100.0 110.0 10.0 3.2
---------------------------------------------------------------------------
THRC040 9849.666 9834.749 107.547 176 -60 130.0 55.0 56.0 1.0 1.4
59.0 60.0 1.0 1.3
75.0 84.0 9.0 1.7
---------------------------------------------------------------------------
THRC041 9849.832 9863.658 108.012 180 -56 154.0 84.0 85.0 1.0 3.9
89.0 90.0 1.0 3.0
94.0 95.0 1.0 2.0
98.0 100.0 2.0 1.0
---------------------------------------------------------------------------


Notes:

(i) Results are based on 50 gram fire assays.

(ii) Intersections are from reverse circulation drilling except for diamond core drillhole FHRD057 which was drilled with HQ2 half-core and sampled to geological boundaries.

(iii) Minimum sample interval of 1.0 metre for RC drilling and 0.2 metres for diamond core drilling.

(iv) Mean grades have been calculated on a 1.0 metre at 0.9g/t lower cut-off grade with no upper cut-off grade applied, and maximum internal waste of 2.0 metres.

(v) All intersections are downhole intervals.

(vi) All downhole deviations have been verified by downhole camera.

(vii) Collar coordinates have been confirmed by survey.

(viii) The Company maintains a QA/QC program in compliance with the requirements of National Instrument 43-101.

(ix) The assay laboratory responsible for the assays was North Australian Laboratories, Pine Creek, Northern Territory, Australia.

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

Contact Information