Sebastian Project (CGT: EL4536, EL4974, EL4982,
ELA4997 80%; CGT: EL3105 60%)

The Sebastian Project is located 11km north, and directly on strike from the northern end of the Bendigo Goldfield. It comprises EL 4536 held by Horizon Energy & Resources Pty Ltd (HER) and EL’s 4974, 4982 held by CGT. A further lcence EL 3105 at the core of the project is held by CGT in a joint venture with Greater Bendigo Gold Mines Ltd (GBGM).
Through the Raywood Joint Venture with HER CGT has an 80% interest in EL 4536. Together CGT and HER, by way of the Sebastian Joint Venture with GBG, have earned a 75% interest in EL 3105. Accordingly, CGT has an effective 60% interest, and HER has an effective 15% interest, in EL 3105.

Regional location of the Sebastian Project
relative to the Bendigo Mining leases and the Bendigo Structural Zone.

The Frederick the Great Reef, within EL 3105, displays characteristics common with reefs in the Bendigo and Castlemaine goldfields with reported production of 186,000 oz at a mined grade of 10 g/t Au. Historic workings are located within a west dipping fault reef breaching an anticline and forming a dilation zone within predominantly sandy units in the east limb of the fold. This geometry is very similar to that at Wattle Gully, where mineralization occurred within a package of such faults in predominantly sandy rocks.

An Aircore drilling program conducted on a 1 kilometre east-west traverse, along the Gannaway Road reserve, 0.5 km north of Sebastian town-ship has provide a cross-section of geological information about the anticline structures and associated lines of quartz reef. This program has been successful in producing two new anomalies east and west of the main NNW-trending Frederick the Great gold structure and will be one additional focus of future exploration drilling.

Drilling to date has confirmed the expected depths to bedrock which are not prohibitive to continued exploration. North of Gannaway Road, previous exploration using shallow aircore drilling has revealed several unexplained gold and arsenic geochemical anomalies (e.g. Gunns Road Anomaly). The first diamond hole to test this anomaly was drilled in July 2006 and designed to pass through the FtG Anticline and intersect the FtG and Bruhns Faults on the prospective eastern fold limb. This hole, FTG011 was highly successful in locating each of these structural elements.

The results of this ‘step-out’ drillhole are very significant, as this is the first case in the Sebastian Goldfield in which structures extrapolated 2km north of historical workings have been located by drilling under shallow alluvial cover. Importantly, this proves that the structures have continuity over a considerable distance and are predictable.

Two main fault zones of extensive quartz veining and sulphide mineralisation were identified. The first fault zone, intersected between 232m - 244m, is believed to be the northern extension of the Frederick the Great fault zone, however, the fault did not host any significant gold or base metal mineralization at this point.
The second and significantly larger fault zone, intersected between 305-365m, is believed to be the northern extension to the Bruhns fault system. Several significant Au and base metal (As, Cu, Pb & Zn) results are returned from this fault system with a maximum gold grade of 5.12g/t Au, and elevated Arsenic levels of 0.2% As or greater.