GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

December 22, 2006 15:16 ET

GBS Gold International Inc.: Shareholder Rights Plan Adopted

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 22, 2006) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") is pleased to announce that its Board of Directors has approved the adoption of a Shareholder Rights Plan (the "Plan"). The purpose of the Plan is to ensure the fair treatment of all GBS Gold shareholders in connection with any take-over bid for the outstanding common shares of the Company, to provide the Company and its Board of Directors and shareholders with sufficient time to properly evaluate and assess the merits of any proposed take-over bid, and, if appropriate, to provide its Board of Directors sufficient time to pursue alternatives that would maximize shareholder value.

The Plan is not being adopted in response to any proposed or threatened acquisition of control of the Company and is similar to plans adopted by other Canadian companies and approved by their shareholders.

Under the Plan, the Company will issue one right in respect of each outstanding common share of the Company. The rights issued under the Plan become exercisable when a person acquires 20% or more of the common shares of the Company without the approval of the Board of Directors or without complying with the "permitted bid" provisions in the Plan. Should such an acquisition occur, the rights issued will entitle shareholders, other than any shareholder or shareholders involved in the acquisition, to purchase additional common shares of GBS Gold at a significant discount to the market price of the common shares at that time. Under the terms of the Plan, "permitted bids" are bids offered to all shareholders, for all of their common shares, made by way of a take-over bid circular, prepared in compliance with applicable securities laws and that remain open for 60 days.

The Plan has been conditionally approved by the Toronto Stock Exchange and will be presented to shareholders for ratification on May 9, 2007 at the next GBS Gold annual general meeting. If ratified by shareholders, the Plan will have a term of three years.

The full text of the Plan can be reviewed on the Company's website, www.gbsgold.com or on the SEDAR website, www.sedar.com.

On behalf of the Board of Directors,

Gilbert Playford, Chairman and CEO

About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 2.1Moz 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 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".

This news release has been approved by GBS Gold's in house geologist, Peter Harris, a qualified person under NI43-101. GBS Gold's total gold resource estimates comprise measured and indicated resources of 19.7 million tonnes (Mt) at 3.3g/t for 2.1 million ounces of contained gold, and inferred resources of 20.8Mt at 2.3g/t for 1.6 million ounces of contained gold. 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 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.
    Jeff Nichols
    General Counsel
    (778) 328-9801
    or
    GBS Gold International Inc.
    Samuel Yik
    Vice President, Corporate Finance and Investor Relations
    (778) 328-9801
    Email: gbs@gbsgold.ca
    Website: www.gbsgold.ca