The Mt. Bundy project is located approximately 90 kilometres south of Darwin just west of the Arnhem Highway. The Project includes the Tom's Gully underground mine and a carbon-in-leach treatment plant with a capacity of 250,000 tonnes per year or 800 tonnes per day, the Mt. Bundy deposit and several additional deposits in the surrounding area.

Tom's Gully

Geology

The Tom's Gully project is located within the Early Proterozoic Wildman Siltstone unit and consists of a shallowly south dipping quartz reef in graphitic shale and siltstone. Gold mineralization comprises a minimum of two south-southwest plunging sulphidic ore shoots.

In the area directly surrounding the deposit, the mineralization is hosted by a planar quartz sulphide vein, which strikes east-west and dips south at approximately 30° near the outcrop position to near horizontal some 1,500 metres down-dip (280 metres deep). The distribution of gold within the vein set is variable and pronounced higher grade shoots are developed within the vein set. These have been the focus for exploitation of the deposit.

The mineralized vein or reef has a thickness of 0.5 to 1.8 metres and a strike extent of 800 metres. The western half of the reef, towards the Williams Fault, has low grade gold with values typically below 0.2 g/t gold. Within the ore shoots, gold grades vary from 3 g/t to 30 g/t gold.

Mining Method

The mining method for Tom's Gully Mine is a modified room and pillar method. Each ore drive is mined up the dip of the orebody in a north-south direction.

These ore drives will be developed alternately at orebody height only for secondary drives and at a height of three metres and split fired for production drives. The split firing will fire the ore out first to extact it followed by the waste which will be fired and extracted.

Once the drives are developed the ore is then extracted in the stopes by stripping eight metres either side of the drives. The remnant ore in the stopes will be pushed out of the stopes using low profile remote dozers. Remote loaders will remove the ore from each production panel to the stockpile, ready for trucking to surface. Regional pillars have been allowed to isolate mining blocks. These may be extracted upon retreat from the mine at the end of the project.

Processing

Gold recovery from Tom's Gully is expected to be 75% due to insoluble gold locked in quartz and refractory sulphides. Previous test work indicated recoveries of 82%. Upon commencement of production, further work will be undertaken to target the higher recoveries.

History

Gold was initially discovered at Tom's Gully in the late 1980s by Carpentaria Exploration Company, a subsidiary of Mt Isa Mines Pty Ltd. Reports suggest that an outcropping high grade quartz vein was discovered during stream sediment sampling as part of a regional reconnaissance exploration program.

An extensive drilling program began in 1987. Drilling was undertaken by several companies through to GBS Gold's acquisition of the asset in 2007. Historical drilling totaled 55,787 metres in 461 holes and included percussion, reverse circulation and diamond drilling programs to a maximum depth of 340 metres.

Open pit and underground mining has occurred intermittently at Tom's Gully since 1988 by various developers and operators. The first open pit mine was operated by Carpentaria Gold between 1988 and 1991. It extended to a depth of 90 metres below surface and produced approximately 100,000 ounces of gold. A decline was developed to access ore down dip, but was abandoned at a depth of 15 metres below the base of the open pit.

Kakadu Resources acquired Tom's Gully and built and commissioned a plant in May 1995. This is the original plant which has been fully refurbished on site. Renison Consolidated Mines took control of Tom's Gully in the late 1990s and added a crushing circuit at the plant in 1999 in preparation for open pit mining which commenced in late 1999. During 2003 and 2004, Renison carried out extensive drilling to delineate the deposit down plunge of the existing open pit, which formed the basis for a feasibility study in 2004 to assess the viability of an underground mining operation. This included upgrading the processing plant. Renison briefly operated the underground mine.

GBS Gold acquired the asset in July 2007 and completed a feasibility study in December 2007 which supported further underground mining. It proposed an operation producing 35,000 ounces of gold a year at a grade of 7.1 g/t gold. Production commenced in July 2008 but was suspended in September 2008 following GBS Gold being placed in administration.

Historical production from Tom's Gully is approximately 200,000 ounces of gold.

Tom's Gully Section

Mt. Bundy

Crocodile Gold acquired the Mt. Bundy project from Valencia Ventures. The project is located approximately 90 kilometres south of Darwin, immediately west of Tom's Gully.

Valencia Ventures completed a feasibility study on the project in 2005 and announced in 2008 it was revising the feasibility study which has not been released.

The oxide resource was mined between 1994 and 1998 producing 113,000 ounces of gold by heap leaching. A substantial amount of transitional and sulphide mineralization occurs beneath the oxide ore.