GBS Gold International Inc.
TSX : GBS

GBS Gold International Inc.

May 13, 2008 17:00 ET

Upgrade to GBS Gold's Fountain Head Mine Resource

TORONTO, ONTARIO--(Marketwire - May 13, 2008) - GBS Gold International Inc. (TSX:GBS) ("GBS Gold" or the "Company") today announces an upgraded resource estimate relating to the Tally Ho lode system of the Fountain Head open pit mine within its Union Reefs Operations Centre in Australia's Northern Territory. Highlights include:

- New resource estimate for the Tally Ho lodes within the Fountain Head open pit deposit comprising indicated resources of 814,000 tonnes at 2.3 grams per tonne ("g/t") for 61,000 ounces of contained gold, and inferred resources of 260,000 tonnes at 2.9g/t for 24,300 ounces of contained gold.

- Significant grade uplifts of 44% in the indicated category and 61% in the inferred category, reflecting the recently reported high grade drilling results.

- Increase of 21,200 ounces in indicated resources and 12,500 ounces in inferred resources.

- As a result, gold production from the Fountain Head open pit is expected to be increased. Additional drilling is planned this quarter to further test the Tally Ho lode system.

- The Tally Ho lodes were discovered by GBS Gold geological personnel in late 2006 and were quickly expanded and brought into production, demonstrating the exciting exploration potential of the operation.

Upgraded Resource Estimate

Following the recently-reported drilling program in the Tally Ho lode system of the Fountain Head open pit deposit (refer to the Company's news release of April 23, 2008), an updated resource estimate has now been completed. The reported drilling specifically targeted the area beneath the existing open pit design on the Tally Ho lodes with the objective of improving the resource classification and elevating the average grade. Both objectives were achieved. The resource estimate for the Tally Ho lodes of the Fountain Head deposit now comprises:



Fountain Head Open Pit
Tally Ho Lodes - Updated Resource Estimate

-------------------------------------------
Updated Resource Estimate - Tally Ho Lodes

(Reported at a 0.7g/t cut-off grade)
------------------------------------------------------------
Resource Category Tonnes Grade (g/t) Ounces
------------------------------------------------------------
Indicated 814,000 2.3 61,000

Inferred 260,000 2.9 24,300
------------------------------------------------------------


The updated resource estimate incorporates the known deposit to a vertical depth of 130 metres beneath the current open pit floor as at the end of April 2008. The resource estimate is based on updated geological wireframes and ordinary kriged geostatistical methods, using variable top-cut grades of between 15-30g/t in individual lode domains.

The block model resource is depicted in the longitudinal section below. In the deeper portion of the model, where the average estimated gold grade exceeds 4.0g/t, the true widths and horizontal mining widths average 10 metres and 15 metres respectively.

To view "Fountain Head Deposit" map, please visit the following link: http://media3.marketwire.com/docs/gbsfig2.pdf

Implications

The higher grades and increased orebody thickness suggest that a cut-back to the existing pit design to extract this material is warranted. The drilling results also suggest that there may be scope for deeper mineralization which could support an underground mining operation, as the Tally Ho lodes are open down plunge. Additional drilling is due to commence in the current quarter to test these zones and to further increase the contained ounces within the Tally Ho lode system.

The Tally Ho lodes were discovered by GBS Gold geological personnel in late 2006 through an initial reverse circulation ("RC") drilling program with follow-up diamond core and additional RC drilling. The deposit was quickly expanded and brought into production, demonstrating the exciting exploration potential of the operation.

Change from Previous Resource Estimate

The Tally Ho lodes form part of the larger Fountain Head deposit, which is currently being mined by open pit methods. The reported mineral resource for the Fountain Head deposit as at November 30, 2007 comprised indicated resources of 78,400 ounces and inferred resources of 30,500 ounces, as tabulated below.



Fountain Head Open Pit
Total Resource Estimate as at November 30, 2007

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Resource Tally Ho Lodes Fountain Head Lodes Total Resource
Category ------------------------------------------------------------------
Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces
(g/t) (g/t) (g/t)
----------------------------------------------------------------------------
Indicated 1,099,222 1.6 55,800 384,000 1.8 22,600 1,483,000 1.7 78,400

Inferred 205,000 1.8 11,800 319,000 1.8 18,700 524,000 1.8 30,500
----------------------------------------------------------------------------


Since November 30, 2007, approximately 324,000 tonnes at an average grade of 1.5g/t for 16,000 ounces of contained gold has been mined from within the indicated resource classification of the Tally Ho lodes. As a result, the new resource estimate for the Tally Ho lodes represents increases in both the indicated and inferred classifications as follows:



Fountain Head Open Pit
Resource Estimate of the Tally Ho Lodes
Resource Update

----------------------------------------------
Indicated Resources Inferred Resources
Tonnes Grade Ounces Tonnes Grade Ounces
(g/t) (g/t)
----------------------------------------------------------------------------
November 2007 resource
estimate 1,099,222 1.6 55,800 205,000 1.8 11,800

Material mined to April 30,
2008 (324,000) (1.5) (16,000) - - -
----------------------------------------------
Depleted November 2007
resource estimate 775,222 1.6 39,800 205,000 1.8 11,800

Increase in contained gold 21,200 12,500
----------------------------------------------
May 2008 resource estimate 814,000 2.3 61,000 260,000 2.9 24,300
----------------------------------------------------------------------------


In comparing the previous and new resource estimates for the Tally Ho lode system, the recent drilling has resulted in a significant uplift to the average resource grade from 1.6g/t to 2.3g/t for the indicated material (an increase of 44%) and from 1.8g/t to 2.9g/t for the inferred material (an increase of 61%).

Mineral Resources and Reserves

GBS Gold's mineral resources now comprise indicated resources of 22.5 million tonnes ("Mt") at an average grade of 3.4g/t for 2.5 million ounces ("Moz") of contained gold, plus inferred resources of 20.3Mt at 2.5g/t for 1.6Moz of contained gold. The resource position does not reflect the drilling recently completed in the Chinese Big Pit area, for which a resource update is expected later in the second quarter. The Company's initial reserve statement comprises total probable reserves of 3.1Mt at 6.0g/t for 601,000 ounces, with metallurgical recoveries estimated between 85-95%. The Company has previously filed independent technical reports detailing its mineral resource and reserve estimates.

About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 2.5Moz of 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. The Company expects to commence production at its Tom's Gully operation in 2008 and its Cosmo Deeps operation in 2010 to increase production to an annualized rate of up to 250,000 ounces, and to construct a GEOCOAT® circuit, a heaped bio-oxidation process, at the Union Reefs plant to treat refractory ores and further increase gold production from the Union Reefs Operations Centre to 300,000 ounces per year. 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 3,500km2 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".

The technical disclosures in this news release regarding the updated resource estimate for the Tally Ho lodes of the Fountain Head deposit were approved by Alf Gillman (F.AusIMM, CP Geol), an employee of GBS Gold and a qualified person in accordance with National Instrument 43-101. The Company's mineral resources comprise indicated resources of 22.5 million tonnes at 3.4g/t for 2.5 million ounces of contained gold and inferred resources of 20.3 million tonnes at 2.5g/t for 1.6 million ounces of contained gold. The Company has filed on May 8, 2008 a technical report entitled "GBS Gold International: Burnside, Union Reefs, Maud Creek and Moline Projects, Northern Territory, Australia" dated February 2008 and authored by Jeames McKibben and Christine Standing of Snowden Mining Industry Consultants Pty Ltd and Heath Gerritsen of HG Mine Design Pty Ltd. The Company has also filed two technical reports on its Tom's Gully project being a technical report entitled "Form 43-101 Technical Report on the Tom's Gully Project" authored by Paul Payne of Resource Evaluations Pty Ltd dated and filed on January 14, 2008 and a technical report entitled "Technical Report on the Mineral Reserves of the Tom's Gully Gold Mine" authored by Heath Gerritsen of HG Mine Design Pty Ltd dated December 2007 and filed on January 31, 2008. The Company has completed feasibility studies on the Tom's Gully and Cosmo Deeps projects, and a life-of-mine study on the operating Brocks Creek underground mine, all of which have declared mineral reserves in accordance with the above technical reports. Where the Company has not completed a feasibility or life of mine study on a particular project, there is no certainty that such project will be economically successful. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 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.

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 Australian 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 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.

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

  • In Toronto, Canada:
    GBS Gold International Inc.
    Ted Mayers, Executive Vice President, Business Development
    (416) 777-1508
    or
    In Perth, Australia:
    GBS Gold International Inc.
    Peter Kerr, Chief Financial Officer
    +61 8 9492 2500
    Email: gbs@gbsgold.ca
    Website: www.gbsgold.com