GBS Gold International Inc.: 2006 Financials and MD&A-New Exploration Results

GBS Gold International Inc. (TSX: GBS)("GBS Gold" or the "Company") has today released its annual 2006 audited financial statements and management's discussion and analysis. Highlights include (all amounts in Canadian dollars unless otherwise stated):

Financials

- For the six month period ended December 31, 2006, the Company recorded a net loss of $3.5 million related primarily to non-cash stock-based compensation expense, imputed interest expense on outstanding purchase obligations and general corporate administration. All costs relating to pre-production activities were capitalized for accounting purposes. In 2006, the Company changed its year-end from June 30 to December 31.

- The Company spent $22.1 million on pre-production activities during the period at its Union Reefs Operations Centre, and gold sales totaled 9,420 ounces for revenue of $7.0 million. GBS Gold also invested $4.1 million in exploration and $6.2 million in property and equipment, including haul road construction, mine camp and process plant refurbishment, the purchase of underground mining equipment and relining of the second ball mill thereby completing the works necessary for the plant to operate at its throughput capacity of 2.5 million tonnes of ore per year.

- During Q1 of 2007, the build-up of production has been slowed due to various start-up issues including poor underground equipment availability, plant repairs and the requirement to blend rain-affected oxide ore from the initial open pit with low-grade stockpiles. Mining and milling activities have now recommenced following recent heavy monsoonal rains, however production for Q1 is unlikely to meet previous forecasts. Based on the start-up issues encountered and on current production plans, the Company has revised for accounting purposes the expected commencement date of commercial production to April 1, 2007.

- Ore is being sourced from the Brocks Creek underground mine and the Rising Tide and Fountain Head open pit mines. The Company expects to steadily increase production from these ore sources during the second quarter and remains on track to achieving its goal of a production rate of 150,000 ounces per year in the middle of 2007.

Exploration - Encouraging new drilling results were returned for the Fountain Head open pit deposit and the Brocks Creek underground gold mine. The new drilling at Fountain Head indicates that the area has the potential to be a much larger mineralized system than originally anticipated. T he best result was 15 metres at 60.0 g/t gold from approximately 130 metres below surface. The results also indicate the potential for lode repeats on the northern side of the Fountain Head anticline. Targeted infill drilling into the deeper levels of the Brocks Creek underground mine returned a thicker intersection with higher grades than expected which should lead to an increase in the resource estimate for the lower levels of the mine. On-ground exploration activities will recommence at the end of the wet season in April. Updated resource estimates are expected in Q2 for the North Point, Princess Louise, Fountain Head and Chinese South Extension deposits.

Teleconference Call: Monday March 12, 2007 at 9.00am EST

Toronto (416) 340-2216, North America 1-866-898-9626, Europe 00-800-8989-6323 and Australia 0011-800-8989-6323 and ask for GBS Gold Website: The webcast can be accessed on the GBS Gold website at www.gbsgold.com

Financial Results

In 2006, the Company changed its year-end from June 30 to December 31 to be in line with its North American peer group. As a result, the Company today released its annual financials for the six month period ended December 31, 2006. For the period, the Company recorded a net loss of $3,533,000 related primarily to non-cash stock-based compensation expense, imputed interest expense on outstanding purchase obligations and general corporate office administration.

During the six month period, the Company spent $22,150,000 on pre-production activities and $4,132,000 on exploration. Pre-production expenditure at the Union Reefs Operations Centre related primarily to mining ($11,020,000), processing ($3,826,000), maintenance ($3,527,000) and administration and safety ($3,404,000). Gold sales of 9,420 ounces for revenue of $6,960,000 were offset against pre-production expenses, which were capitalized for accounting purposes.

Mining activities included the mobilization of the mining contractor, commencement of open pit and initial underground mining operations, commissioning of mining equipment and build-up of the mining workforce. Processing and maintenance costs were related to the commissioning and operation of the Union Reefs plant, and to maintenance activities on fixed and mobile equipment.

GBS Gold also invested $6,207,000 in property, plant and equipment for future production growth, including mine camp refurbishment and upgrades, haul road construction, process plant refurbishment and the purchase of mobile underground mining equipment, light vehicles and IT equipment. The Company also relined the second ball mill in the Union Reefs plant thereby completing the commissioning activities required to enable the plant to operate at its throughput capacity of 2.5 million tonnes of ore per year.

At December 31, 2006, the Company had total assets of $137.8 million including mineral exploration and development properties ($96.7 million) and property, plant and equipment ($14.1 million). Total liabilities were $17.9 million comprising accounts payable and accrued liabilities ($9.3 million), asset retirement obligations ($3.9 million) and the final installment due in September 2007 for the purchase of 50% of the Burnside Joint Venture ($4.6 million). At December 31, 2006, the Company held $15.7 million in cash, and cash holdings currently are approximately $8 million.

The Union Reefs Operations Centre was officially opened by the Chief Minister of the Northern Territory of Australia on November 9, 2006. Gold production to the end of 2006 was 10,430 ounces from the milling of 359,000 tonnes of low-grade material. Production ramp-up activities have been slowed in Q1 due to various start-up issues including poor underground equipment availability, repairs to the plant elution column and the need to blend greater than anticipated quantities of rain-affected clayey oxide open pit ore with hard rock low-grade stockpiles in order to enable efficient milling. The heavy monsoonal rains also necessitated the temporary suspension of open pit mining and processing activities in early March. Mining and milling activities have now recommenced following recent heavy monsoonal rains (refer news release dated March 6, 2007), however production in the current quarter (Q1 2007) is unlikely to meet previous forecasts (20,000 ounces). As a result of these various unforeseen start-up delays and based on current production plans, the Company has revised for accounting purposes the expected commencement date of commercial production to April 1, 2007.

Ore is being sourced from the Brocks Creek underground mine and the Rising Tide and Fountain Head open pit mines. The Company expects to steadily increase production from these sources during Q2 and remains on track to achieving its goal of a production rate of 150,000 ounces per year in the middle of 2007. Gold Price Protection

Subsequent to year end, GBS Gold has taken advantage of the improved spot gold price to purchase gold put options giving the Company the right, but not the obligation, to sell 30,000 ounces of gold at A$825/ounce (equivalent to US$650/ounce at an A$/US$ exchange rate of 0.788) . These contracts provide price protection over the remainder of Q1 and Q2 covering the majority of forecast production during that period, and do not cap the price at which the Company can sell its gold production.

Exploration Results

Fountain Head

Recent drilling at the Fountain Head deposit focused on the southern zone discovered in late 2006 (refer to the news release dated October 26, 2006). This zone comprises three significant lodes which have a strike length of at least 250 metres and is open to the east. Results from the recent drillholes include:

Southern Zone:
THRC042        15 metres    at    2.1 g/t   from 104 metres downhole
THRC043        29 metres    at    2.5 g/t   from 100 metres downhole
THRC044         3 metres    at    2.7 g/t   from 16 metres downhole
                8 metres    at    1.8 g/t   from 39 metres downhole
THRC045         9 metres    at    1.9 g/t   from 37 metres downhole
                4 metres    at    2.2 g/t   from 49 metres downhole
THRC053         5 metres    at    2.5 g/t   from 110 metres downhole
                7 metres    at    3.3 g/t   from 120 metres downhole
THRC054         8 metres    at    2.6 g/t   from 127 metres downhole
THRC061        16 metres    at    2.6 g/t   from 4 metres downhole
THRC065        10 metres    at    2.4 g/t   from surface
THRC067        15 metres    at    3.0 g/t   from 37 metres downhole
                3 metres    at    5.3 g/t   from 85 metres downhole
THRD036        17 metres    at    2.6 g/t   from 100 metres downhole
THRD069        15 metres    at   60.0 g/t   from 139 metres downhole

Northern Zone:
FHNW002         6 metres    at    4.4 g/t   from 67 metres downhole

A full tabulation of the drilling results can be found attached to this news release on the GBS Gold website at www.gbsgold.com.

The results from the "THRC" drillholes within the southern Fountain Head area are very encouraging as they indicate that the Fountain Head area has the potential to be a much larger mineralized system than originally anticipated. These results are now being incorporated into an updated resource model and a new estimate for the Fountain Head area is due for release in Q2. The Fountain Head deposit is expected to be a key ore source for the Union Reefs Operations Centre for sustaining the 150,000oz/year target production rate.

In addition to the southern area drilling, two holes were drilled on the opposite side and to the northwest of the Fountain Head anticlinal zone testing for lode repeats. As tabulated above, drillhole FHNW002 returned an intersection of 6.0 metres at 4.4 g/t gold from 67 metres downhole. This result will be followed up in the next round of drilling.

Brocks Creek underground mine

A new diamond core drillhole was completed from a previously drilled hole into the Main Lode of the Brocks Creek orebody approximately 320 metres vertically below surface. The new drillhole returned a significantly better intersection of 2.9 metres at 10.7 g/t gold in this area where the existing resource model had indicated the thickness and grade of the orezone to be only 1.7 metres at 4.3 g/t gold. As a result, the estimated resource grade and contained gold content in this area is expected increase. The resource model will be updated in due course.

Resource Estimate Updates

On-ground exploration activities will recommence at the end of the Northern Territory wet season in April. Updated resource estimates are expected in Q2 for the North Point, Princess Louise, Fountain Head and Chinese South Extension deposits.

Conference Call and Webcast

Shareholders and other interested parties are invited to a conference call on Monday March 12, 2007 at 9:00am EST for a presentation of the financial results and an open-forum question and answer session. Individuals can participate by dialing one of the following numbers: Toronto (416) 340-2216, North America 1-866-898-9626, Europe 00-800-8989-6323 and Australia 0011-800-8989-6323 (and ask for GBS Gold) or via webcast on the GBS Gold website at www.gbsgold.com.

About GBS Gold International Inc.

GBS Gold is an emerging gold producer with 2.1Moz of Measured and Indicated Resources and 1.5Moz 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 2008-09. 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 2,500km(2) 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".

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 and January 9, 2007, 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.

---