GBM Resources : Report for Quarter Ended 31st March 2016

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ABN 91 124 752 745‌‌

29 April 2016

REPORT FOR THE QUARTER ENDED 31st MARCH 2016 Highlights Mount Coolon Gold Project: Koala Gold Mine

• The Koala Gold Deposit has an identified Gold endowment of 360,000 ounces with significant exploration upside

• Historical gold production from the Koala Gold Mine produced 243,000 ounces at an average grade of 12.7 g/t Au. Production was extracted from workings extending over a strike length of 900 metres and within 130 metres from surface

• Additional mineralised zones have been identified for incremental resources and resource estimation is underway. These include areas with high-grade drill intercepts from previous drilling

  Conway Gold Prospect

• High-grade gold intersections at the Wobegong prospect included:

  • 14 m @ 16.08 g/t Au from surface in drill hole CFS005 (including 1 m @ 208g/t Au from 1 m).

  • 2 m @ 26.6 g/t Au from 40 m in drill hole CON006.

  • 8 m @ 4.91 g/t Au from 26 m in drill hole C013.

• Conway System contains multiple prospects and is considered to hold potential for both bonanza epithermal vein style deposits and bulk tonnage low-grade disseminated gold deposits.

  Mount Morgan Copper-Gold Project:

• GBM acquired the Moonmera Copper - Molybdenum Project from Rio Tinto.

• Moonmera is one of the largest known porphyry copper systems in Eastern Australia.

ASX Code: GBZ COMPANY DIRECTORS

Peter Thompson

Managing Director/ Executive Chairman

Neil Norris

Exploration Director - Executive

Hun Seng Tan

Non- Executive Director CONTACT DETAILS

Principal & Registered Office

Suite 8, 7 The Esplanade, Mt Pleasant, WA 6153

Exploration Office

10 Parker Street,

Castlemaine, Victoria 3450

Website

www.gbmr.com.au

Email

info@gbmr.com.au

Phone

+61 (8) 9316 9100

Fax

+61 (8) 9315 5475

Phone (Exploration Office)

+61 (3) 5470 5033

SAFETY AND ENVIRONMENT

No LTI or environmental incidents were reported during the quarter. The Company has now completed 55 consecutive months with no LTI's and 101 consecutive months with no significant environmental incidents. GBM is committed to continuously improving safety and environment systems with the clear aim of achieving zero harm. Staff completed first aid training certificates and ongoing training is planned for the June Quarter.

100% GBM GOLD PROJECTS Mount Coolon Gold Project, Queensland

The Eugenia Scoping study remains on track for completion during the June Quarter with a range of studies now at an advanced stage. These include; metallurgy, environment and mining with no impediments to development identified at this stage.

During the quarter database upgrades and geological interpretation of the Koala Deposit advanced and confirmed potential for additional resources to be defined from existing data. Review and upgrading of the Glen Eva data base also advanced during the quarter.

A review of data from the Conway project area confirmed significant exploration potential with a number of high grade intersections in previous drilling and geological sampling confirming the presence of bonanza grade epithermal gold mineralisation. First pass reviews of all mineralising systems identified in the tenement area are progressing with several key areas in Blackbutt- Canadian and Verbena Sinter yet to be completed.

Koala Gold Project

The Mount Coolon project continues to be the priority for the company with the potential for both near term production and larger discoveries with long term production potential being pursued. Review of available mining and exploration data for the Koala Gold Deposit, located within the Mount Coolon Gold Mines tenements, has confirmed potential for additional gold resources that could be amenable to extraction by open cut mining.

In addition, a number of other gold prospects within the Koala Project area are being investigated. This review is part of an ongoing assessment of the multiple resource centres hosted by the Mount Coolon Gold Mines Project tenements acquired by GBM last year.

Work on the data base and previous geological references resulted in the identification of a set of proximal and distal targets within the Koala Lode System. Proximal targets along the Koala Lode have the potential to incrementally add to the existing Resource. These include:

• Remnant and low-grade mineralisation in and surrounding the historical underground workings which was excluded from the existing Resource model. This material may be able to be mined by open pit and has potential to be incorporated into the Resource estimate.

  Inclusion of low-grade halo mineralisation, encompassing the high grade mineralisation domain (existing Resource) holds potential to substantially increase the existing Resource tonnage. The Company considers that any such Resource extension to have the potential for extraction by open pit methods.

• Review of grade control data for the Koala open pit revealed untested and open south- westward strike extension of the northeast striking, southeast dipping zone. This is linked to the main zone mined in the Koala pit and is moderate to high-grade. The current mineralised domain did not encompass this zone and actually excludes four exploration holes (see Table 1 below) that intersected this zone.

• Drilling at either end of the open pit and underground Resource is unlikely to have adequately tested the favourable andesitic host.

• Open pit potential at the south end of the lode system (still to be evaluated).

Hole	From (m)	To (m)	Length (m)	Grade (Au g/t)
MDDH032	42	54.4	13.4	11.5
DH100	23	35	12	7.5
MDDH003	94.8	110.53	15.73	8.0
MDDH056	95	100.25	5.25	5.4
and	109.55	115.35	5.8	7.1

Table 1: Drill intercepts in southwest zone not included in current Resource estimate.

Three of the exploration targets (see Table 2 below) within the immediate area of mine workings, have been estimated based on the available data including drillhole data base, underground mining outlines, open pit grade control data and open pit survey data. These targets are based on volumes from preliminary wire-framed areas of mineralisation and estimates of grade ranges from known mining production and available drillhole assays. These targets have potential to add between 24,000 ounces and 75,000 ounces to the Koala Resource. A Resource estimate to realise the target potential has been commissioned and is expected to be completed during the June Quarter. It should be noted that the potential quantity and grade of an exploration target is conceptual in nature and there has been insufficient exploration available to estimate a Mineral Resource and it is uncertain further exploration will result in the estimation of a Mineral Resource.

Target	Tonnage Target (@ 2.6 t/m3)	Grade range (g/t Au)	Ounces range	Mining method
Low-grade halo above 890RL (within 100m of surface, (excluding old workings zone)	~ 500,000t	0.7 - 2.0	10k - 30k	Open pit
South west pit extension, 100m strike	~60,000t	2.0 - 7.0	4k - 15k	Open pit
Old workings zone	~ 500,000t	0.7 - 2.0	10k - 30k	Open pit

Table 2: List of exploration targets.

Regional targets are still being evaluated, however it can be seen (refer to Longitudinal Projection below) that the Main Lode System appears to remain open to the North, and there remains potential at depth, despite some deeper drillholes not intersecting mineralisation. A number of deep drillholes are interpreted to have failed to reach the Main Lode target, and the structure remains poorly understood at depth. The Main Lode has an identified gold endowment of 360,000 ounces of gold and remains open for further material extensions to be discovered at depth and along strike. The endowment estimate is based on past production, identified Resources and the mid-range of new incremental exploration targets.

Figure 1; Koala Gold Mine Longitudinal Projection showing exploration targets and past production

Koala Mine Background

The Mt. Coolon mineralised vein system and the associated Koala Lode was discovered in 1913. The discovery led to 25 years of continuous mining until 1939. By 1932 it was Queensland's largest gold producer, operated by Gold Mines of Australia, an early precursor to Western Mining Corporation. Open stopes measuring 2 to 16 metres wide extend over a 400 metre strike length within the central portion of the Koala reef extended to a maximum depth of 130 metres. The mine was closed and dismantled in 1941 and there was no further activity until new mine Leases were granted in 1974. Part of the Deposit was again mined by open pit (Koala Open Pit) in 1996/97 by Ross Mining.