GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

December 13, 2006 09:01 ET

GBS Gold International Inc.: Updated Resource Estimate-Fountain Head Deposit

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 13, 2006) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") is pleased to announce an updated resource estimate for the Fountain Head gold deposit, ongoing exploration activities and the ramp-up of production at its Union Reefs Operations Centre in the Northern Territory of Australia.

Highlights include:

- Following successful recent drilling at the Fountain Head gold deposit, the resource estimate has been increased to comprise indicated resources of 1,985,000 tonnes at 1.7 grams per tonne (g/t) for 106,100 ounces of contained gold, plus inferred resources of 661,000 tonnes at 1.6g/t for 34,000 ounces of contained gold. This represents an increase of approximately 120% from the previous indicated resource estimate and 60% from the previous inferred resource estimate.

- Updated mine design optimizations of the Fountain Head deposit are being completed and it is anticipated that the revised mine design should enable production of increased ore tonnages for a longer minelife than initially planned for this deposit. Mining at Fountain Head is about to commence.

- Further drilling is planned at Fountain Head to test the down-plunge extents of the deposit, and new drilling has been undertaken to test similar stratigraphic units and structural targets elsewhere in the local area.

- GBS Gold's total gold resource estimate now comprises 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. Further resource updates for the Princess Louise, North Point, Chinese South Extension and Mottrams deposits are expected in the first quarter of 2007.

- Exploration activities are continuing within the Union Reefs Operations Centre, including at the Cosmo Deeps deposit and directly to its north within the Chinese "big pit" area at the Chinese South Extension deposit. The Company has also signed an agreement with Australian public company Territory Iron Limited ("Territory Iron") giving GBS Gold the right to explore for gold on Territory Iron's tenements adjacent to the Union Reefs Operations Centre, and giving Territory Iron the right to explore for iron ore on certain GBS Gold-controlled tenements adjacent to Territory Iron's Frances Creek Iron Ore project.

- Mining activities at the Union Reefs Operations Centre are ramping up with increased ore quantities being sourced from the Brocks Creek underground mine and the Rising Tide open pit deposit, and site clearing activities completed at Fountain Head. These three deposits host measured and indicated resources of 4.3Mt at 2.6g/t for 362,900 ounces of contained gold. The combined output of these three mines is targeted to increase gold production to an annualized rate of 150,000 ounces in 2007.

Fountain Head Deposit

The Fountain Head gold deposit is located approximately 60 kilometres north of the Union Reefs processing plant. The ore tonnages from the planned Fountain Head open pit mine will form a key component of the mill feed in 2007.

To view the map please click on the following link: http://ccnmatthews.com/docs/ureef1.jpg

Following successful resource definition drilling undertaken earlier this year at Fountain Head (refer to news release dated October 26, 2006), an updated resource estimate has been completed for the Fountain Head deposit. This estimate incorporates the original Fountain Head anticlinal lodes and the adjacent zone of veining identified in the recent drilling. Updated mine design optimizations of the Fountain Head deposit are being completed and it is anticipated that the revised mine design should enable production of increased ore tonnages for a longer minelife than initially planned for this deposit. Mining at Fountain Head is about to commence.

Further drilling is planned at Fountain Head to test the down-plunge extents of the deposit, and new drilling has been undertaken to test similar stratigraphic units and structural targets elsewhere in the local area.

Updated Resource Estimate

The resource estimate for the Fountain Head gold deposit has been increased to comprise indicated resources of 1,985,000 tonnes at 1.7g/t for 106,100 ounces of contained gold, plus inferred resources of 661,000 tonnes at 1.6g/t for 34,000 ounces of contained gold, as tabulated below.



-------------------------------------------------------
Updated Resource Estimate Previous Resource Estimate
(Reported at a 0.7g/t (Reported at a 0.7g/t
cut-off grade) cut-off grade)
--------------------------------------------------------------------------
Resource Category Tonnes Grade Ounces Tonnes Grade Ounces
(g/t) (g/t)
--------------------------------------------------------------------------
Indicated 1,985,000 1.7 106,100 769,000 1.9 47,600
Inferred 661,000 1.6 34,000 359,000 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 either ordinary kriging with top-cut grades in the range 4-40g/t, or multiple indicator kriging for the sheeted vein mineralization. The sheeted vein mineralization is hosted between footwall and hanging wall faults which are expected to simplify open pit mining with the faults providing visual identification of the in-pit lodes.

Total Gold Resource

GBS Gold's measured and indicated resources now total 19.7Mt at 3.3g/t for 2.1 million ounces of contained gold, and inferred resources now total 20.8Mt at 2.3g/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 - - - 4.6 4.6 690
Brocks Creek U/G mine 0.1 20.6 56 0.2 16.2 94
Open Pits - - - 5.5 1.7 305
--------------------------------------------------
0.1 20.6 56 10.3 3.3 1,088
Refractory deposits:
Maud Creek - - - 9.3 3.1 935
--------------------------------------------------
TOTAL 0.1 20.6 56 19.6 3.2 2,023
--------------------------------------------------------------------------
--------------------------------------------------------------------------


--------------------------------------------------------------------------
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 5.5 1.7 305 14.4 1.8 853
--------------------------------------------------
10.4 3.4 1,144 19.7 2.3 1,476
Refractory deposits:
Maud Creek 9.3 3.1 935 1.1 2.4 82
--------------------------------------------------
TOTAL 19.7 3.3 2,079 20.8 2.3 1,558
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Source: Technical Reports and news releases filed on SEDAR on January 20,
July 10, September 14, October 26 and November 27, 2006, and this news
release.


The following chart depicts the resource updates achieved by GBS Gold since its acquisition of the Union Reefs Operations Centre in December 2005. To view the chart, please click the following link: http://ccnmatthews.com/docs/diag1213.jpg

Exploration and Resource Updates

The Fountain Head resource increase is another of a continuing number of updates to GBS Gold's resource estimates following successful resource definition drilling programs completed earlier this year. GBS Gold is continuing exploration within the Union Reefs Operations Centre, including at the Cosmo Deeps deposit and directly to its north within the Chinese "big pit" area at the Chinese South Extension deposit. Further resource updates for the Princess Louise, North Point, Chinese South Extension and Mottrams deposits are expected in the first quarter of 2007.

GBS Gold has also signed an agreement with Australian public company Territory Iron Limited ("Territory Iron") giving GBS Gold the right to explore for gold on Territory Iron's tenements located adjacent to the Union Reefs Operations Centre, and giving Territory Iron the right to explore for iron ore on certain GBS Gold-controlled tenements adjacent to Territory Iron's Frances Creek Iron Ore project.

Operations

Mining activities at the Union Reefs Operations Centre are ramping up with increased ore quantities being sourced from the Brocks Creek underground mine and the Rising Tide open pit deposit, and site clearing activities completed at Fountain Head. These three deposits host measured and indicated resources of 4.3Mt at 2.6g/t for 362,900 ounces of contained gold. The combined output of these three mines is targeted to increase gold production to an annualized rate of 150,000 ounces in 2007.

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".

Note

The drilling results and mineral resource estimates detailed in this news release 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.

On behalf of the Board of Directors

Gilbert Playford, Chairman and CEO

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