GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

November 27, 2006 09:30 ET

GBS Gold International Inc.: Resource Update-Cosmo Deeps

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 27, 2006) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") is pleased to announce an update to the resource estimate for the Cosmo Deeps deposit within its Union Reefs Operations Centre in the Northern Territory of Australia.

Highlights include:

- Following drilling earlier this year into the Western Lodes of the Cosmo Deeps deposit, the resource estimate for the Western Lodes has been increased to comprise an indicated resource of 1.2 million tonnes (Mt) at an average grade of 3.5 grams per tonne (g/t) for 133,000 ounces of contained gold, and an inferred resource of 0.8Mt at 3.7g/t for 95,000 ounces of contained gold. This new estimate represents an increase of 87,000 ounces in the indicated resource category and 50,000 ounces overall.

- The significance of the Western Lodes has increased with the new resource estimate. Drilling has already commenced to test for along-strike continuations and down-plunge extensions to the identified high-grade zones. Future resource increases are anticipated.

- The resource estimate for the whole Cosmo Deeps deposit now comprises indicated resources of 4.6Mt at 4.6g/t for 690,000 ounces of contained gold, and inferred resources of 5.2Mt at 3.6g/t for 600,000 ounces of contained gold.

- GBS Gold's total gold resource base comprises measured and indicated resources of 18.5Mt at 3.4g/t for 2.0 million ounces of contained gold, and inferred resources of 20.5Mt at 2.3g/t for 1.5 million ounces of contained gold.

Cosmo Deeps

The Cosmo Deeps gold deposit is located adjacent to the main highway approximately 150km south of the city of Darwin in Australia's Northern Territory, and approximately 60km northwest of the Union Reefs gold plant. GBS Gold is planning to commence underground mining of the deposit in 2008.

To view the map of Cosmo Deeps Gold deposits, please click the following link: http://www.ccnmatthews.com/docs/URGP1.jpg

The Cosmo Deeps deposit comprises a series of parallel mineralized lodes extending beneath the previously-mined Cosmo Howley open pit (production of approximately 0.5 million ounces over 1986-1993) on the eastern and western flanks of a large northwest-plunging dolerite anticline. Drilling by previous owners focused on the Eastern Lodes of the deposit. Following a diamond core drilling program into the Western Lodes aimed at infilling certain areas within the previous 2005 resource model (announced in a news release dated July 10, 2006), GBS Gold has re-modelled the deposit and calculated a new resource estimate for the Western Lodes.

The updated resource estimate for the Cosmo Deeps deposit, as tabulated below (with a comparison to the previous December 2005 resource estimate), represents an increase in the contained gold content of the Western Lodes of 50,000 ounces including an increase of 87,000 ounces in the indicated category:



------------------------------------------------------
Updated Cosmo Deeps Resource Estimate
November 2006
------------------------------------------------------
Indicated Inferred
Tonnes Grade Ounces Tonnes Grade Ounces
(g/t) (g/t)
---------------------------------------------------------------------------
Eastern Lodes:
- Primary 2,061,000 6.0 398,000 1,637,000 3.3 175,000
- Secondary 1,390,000 3.6 159,000 2,764,000 3.7 330,000
------------------------------------------------------
Total Eastern Lodes 3,451,000 5.0 557,000 4,401,000 3.6 505,000
Western Lodes 1,187,000 3.5 133,000 810,000 3.7 95,000
------------------------------------------------------
Total 4,638,000 4.6 690,000 5,211,000 3.6 600,000
---------------------------------------------------------------------------
---------------------------------------------------------------------------


------------------------------------------------------
Previous Cosmo Deeps Resource Estimate
December 2005
------------------------------------------------------
Indicated Inferred
Tonnes Grade Ounces Tonnes Grade Ounces
(g/t) (g/t)
---------------------------------------------------------------------------
Eastern Lodes:
- Primary 2,061,000 6.0 398,000 1,637,000 3.3 175,000
- Secondary 1,390,000 3.6 159,000 2,764,000 3.7 330,000
------------------------------------------------------
Total Eastern Lodes 3,451,000 5.0 557,000 4,401,000 3.6 505,000
Western Lodes 506,000 2.9 46,000 1,338,000 3.1 132,000
------------------------------------------------------
Total 3,957,000 4.7 603,000 5,739,000 3.5 637,000
---------------------------------------------------------------------------
---------------------------------------------------------------------------


The following diagrams illustrate the previous 2005 and new 2006 resource model zones, and show the drilling included in the updated Western Lodes resource estimate. To view the diagram, please click the following link: http://www.ccnmatthews.com/docs/2005%20model.jpg

With this additional definition of the Western Lodes, a considerable amount of resources have been successfully converted from inferred to indicated status. The 2006 drilling has also provided valuable geological information and resulted in the identification of a fault through the Western Lodes zone. The 2006 resource model incorporates this fault which more accurately reflects the shapes of the Western Lodes and is consistent with the 2006 drilling which returned slightly lower intercept grades in the vicinity of the fault.

The 2006 drilling now enables GBS Gold to target the high-grade down-plunge areas. Drilling of these down-plunge areas and interpreted along-strike extensions has already commenced. GBS Gold is confident that this drilling will confirm the high-grade down-plunge extension from the current resource model. Accordingly, increases to the Western Lodes resource estimate are anticipated.

The resource modelling and estimation work has been undertaken by in-house geological personnel and external geostatistical consultants in accordance with National Instrument 43-101.

The Cosmo Deeps resource model encompasses the Cosmo Deeps Eastern Lodes down to a vertical depth of approximately 655 metres below surface and the Western Lodes down to a vertical depth of approximately 350 metres below surface. The strike length of each of the parallel Eastern Lodes is approximately 300 metres, and of the Western Lodes is approximately 260 metres.

The resource estimate incorporates an extensive mining and drillhole database, has been calculated using conventional geological modelling and geostatistical estimation methods, and incorporates density testwork and a thorough QA/QC review and validation of the drillhole database. The estimate has been calculated using a lower cut-off grade of 2g/t and geostatistically-determined top-cut grades in the range 12-40g/t. Sensitivity to top-cut grades is low given the relatively consistent grade distribution.

Total Gold Resource

GBS Gold's measured and indicated resources now total 18.5Mt at 3.4g/t for 2.0 million ounces of contained gold, and inferred resources now total 20.5Mt at 2.3g/t for 1.5 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 - - - 4.6 4.6 690
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 18.4 3.3 1,965
--------------------------------------------------------------------------
--------------------------------------------------------------------------


--------------------------------------------------------------------------
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 4.6 4.6 690 5.2 3.6 600
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
--------------------------------------------------
9.2 3.7 1,086 19.4 2.3 1,463
Refractory deposits:
Maud Creek 9.3 3.1 935 1.1 2.4 82
--------------------------------------------------
TOTAL 18.5 3.4 2,021 20.5 2.3 1,545
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Source: Technical Reports, subsequent news releases filed on SEDAR on
January 20, July 10, September 14 and October 26, 2006, and this news
release.


The following chart depicts the resource updates achieved by GBS Gold since acquisition of the Union Reefs Operations Centre in December 2005. To view the chart, please click the following link: http://www.ccnmatthews.com/docs/GBSRupgrades.jpg

About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 2.0Moz 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. 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 250,000 ounces in 2008 at a targeted cash cost of US$300 per ounce. 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".

Gilbert Playford, Chairman and CEO

This news release has been approved by GBS Gold's in house geologist, Peter Harris, a qualified person under NI43-101. 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 and October 26, 2006, all of which may be viewed on the SEDAR website, www.sedar.com. 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.

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
    Email: gbs@gbsgold.ca
    Website: www.gbsgold.com