| For a company that didn't even exist two years ago, | | | | silica and Ladera Sur de los Tortólas. The Brecha |
| Malbex Resources has shown remarkable progress in | | | | Límite and Ladera Sur de los Tortólas prospects |
| a very short period of time. It has acquired a 100% | | | | have strongly elevated copper and silver which |
| interest in three very promising gold exploration | | | | distinguishes them from the others. Coincident gold, |
| projects in Argentina, completed a large private | | | | silver, copper and arsenic enrichment suggests the |
| placement, gone public, and expects to spend | | | | possibility of epithermal enargite-bearing vein |
| approximately US$6 million for exploration work on the | | | | mineralization at these targets, similar to high-grade |
| three projects during the 2009/2010 field season, which | | | | mineralization mined previously at the famous El Indio |
| commenced in October 2009 and is expected to | | | | mine, some 20 km to the northwest in Chile. |
| continue until May 2010. Its three properties, Del | | | | We just announced strong drill results on February 17 |
| Carmen, Despoblados, and Arroyo de los Amarillos | | | | from the first two holes testing Brecha Límite. Hole |
| (Amarillos) total 22,400 hectares in area and are | | | | DDHC-10-008 contains a 35 metre long interval grading |
| located in mining friendly San Juan province in | | | | 2.2 grams per tonne (g/t) gold (Au) and 42.9 g/t silver |
| northwestern Argentina. All three projects are located | | | | (Ag). This includes a 16 m long interval grading 4.03 g/t |
| in the prolific El Indio Gold Belt, along the border with | | | | Au and 81.8 g/t Ag (5.39 g/t Au equivalent), which |
| Chile. There is excellent access to the projects via a | | | | further includes a higher grade interval of 4.0 m at 6.99 |
| 4-5 hour drive on paved highway and all-weather | | | | g/t Au and 191.25 g/t Ag (10.18 g/t Au equivalent). Hole |
| gravel road from San Juan City. Two of the projects | | | | DDHC-10-007, collared 60 m north-east along strike, |
| (Amarillos and Despoblados) are adjacent to 30 million | | | | was abandoned at 34.8 m due to drilling problems, but |
| ounces of past production and gold reserves at | | | | ended in mineralisation with grades of 0.78 g/t Au and |
| Barrick's Veladero and Pascua Lama deposits. | | | | 11.68 g/t Ag over the final 10.8 m. The mineralisation |
| Amarillos and Del Carmen host hydrothermal alteration | | | | intercepted in the two holes appears to continue |
| zones similar to those associated with the | | | | north-eastwards within the Malbex concessions. |
| high-sulphidation gold deposits at Veladero and Pascua | | | | At Del Carmen Sur, we have been able to collect a |
| Lama and the former El Indio mine in Chile, while the | | | | large number of surface samples and should be able |
| geologic setting at Despoblados is remarkably similar to | | | | to report results on that soon. |
| Kinross' FDN deposit in Ecuador. Malbex's President | | | | RI: How about Despoblados and Amarillos? |
| and CEO, Tim Warman took time out from his busy | | | | TM: Our model for Despoblados is that it contains |
| schedule to fill us in on the prospects and plans for his | | | | buried targets in two pull-apart basins in a big regional |
| fast moving company. | | | | structure. There's excellent access to the |
| Resource Intelligence: Can you tell us briefly how | | | | Despoblados project since the all-season road going to |
| Malbex got to where it is today? | | | | the Veladero Mine and Pascua Lama development |
| Tim Warman: Malbex was initially formed privately by | | | | site crosses the centre of the property and the two |
| a group of experienced mining and finance | | | | pull-apart basins. This is a low-sulphidation epithermal |
| professionals – Terry MacGibbon (FNX CEO), Joe | | | | gold-silver target similar in geological setting to Kinross' |
| Hamilton (former Aurelian director and former CEO of | | | | 13.7 million ounce Fruta del Norte deposit in Ecuador. |
| African Copper) Rob Pollock and Frank Davis. The | | | | The principal similarities include sequences of poorly |
| founder group had strong ties to mining executives in | | | | sorted epiclastic rocks associated with major regional |
| Argentina and thus were able to acquire properties | | | | strike-slip faults which could represent pull-apart basin |
| which were being put up for bid by the Instituto | | | | sequences; and beds of siliceous sinter, evidence for |
| Provincial de Exploraciones y Exploitaciones Mineral | | | | surficial hot springs during the deposition of the |
| (IPEEM), an arm's length agency of the San Juan | | | | epiclastic sequence and suggestive of a buried |
| provincial government in Argentina. The three | | | | epithermal target with little other evidence of a |
| properties we acquired 100% interests in, Del Carmen, | | | | hydrothermal system at surface. There are two |
| Despoblados, and Arroyo de los Amarillos, are | | | | discrete areas of outcropping pull-apart basin deposits |
| covered by 5 1/2-year agreements running from | | | | within the Pascua-Lama/Veladero structural corridor at |
| September 2008, and are convertible into 30-year | | | | Despoblados; both contain sinter. Exploration by |
| renewable exploitation licenses with a 3% royalty to | | | | previous operators focused on the large area of visible |
| the province and a 2% royalty to IPEEM. Because of | | | | hydrothermal alteration with outcropping narrow |
| Joe Hamilton's connection to Aurelian Resources, that | | | | low-sulphidation veins outside the structure and neither |
| is how the team grew to include four additional | | | | of the two basins has been drill tested. |
| members of the former Aurelian team – Patrick | | | | We plan a program of mapping and ground |
| Anderson, who joined our Board, Peter Stewart, our | | | | geophysical surveys (magnetometer and CSAMT) to |
| VP Exploration, Carson Noel, our country manager and | | | | identify zones of enhanced resistivity indicative of |
| myself. | | | | silicification and possible epithermal quartz veining |
| RI: So then what happened? | | | | beneath the basin cover. We have to do diamond |
| TM: We engaged Thomas Weisel, Dundee Securities | | | | drilling to explore beneath the epiclastic rocks at |
| and GMP to place a $10.6 million equity financing to | | | | Despoblados which will be done, if warranted by the |
| fund the exploration of the three projects. That was | | | | results of these studies, during the 2009/2010 field |
| followed by the process of taking the company public | | | | season. |
| which we did through a reverse take-over of a trading | | | | The Arroyo de Los Amarillos project area is located |
| company on the TSX-V called Arapaho Capital Corp. | | | | immediately north of Barrick's Pascua Lama |
| which was effective as of October 30, 2009. | | | | concessions and extends northward along the |
| RI: Can you tell us more about your properties? | | | | Argentina-Chile border. It is more of a grass roots |
| TM: Del Carmen is our flagship project, and is located | | | | exploration target and hosts a number of colour |
| near the southern end of the prolific El Indio Gold Belt. | | | | anomalies visible on satellite imagery near the Barrick |
| Del Carmen Norte is a well-exposed, high sulphidation | | | | concession boundary. Other operators recognized |
| epithermal gold-silver system covering approximately 9 | | | | these to be epithermal alteration zones which became |
| sq. km. We are also currently exploring a similar, but | | | | the focus of nearly all previous exploratory work. |
| less well exposed high sulphidation epithermal system | | | | Probably less than 10% of the concession area has |
| within the same concession package located about 5 | | | | been mapped or explored, due partly to the difficult |
| km to the south, at Del Carmen Sur. | | | | terrain. We did only limited prospecting in the 2008 |
| In 2008/2009, our preliminary exploration at Del | | | | 2009 field season because of the challenging terrain |
| Carmen Norte revealed widespread trace to | | | | and poor access. |
| high-grade gold mineralization on surface within the | | | | In addition to the 17+ million ounce Pascua Lama gold |
| large alteration zone, principally in siliceous black-matrix, | | | | deposit to the south, Yamana is exploring immediately |
| hydrothermal breccias that are commonly controlled | | | | to the east of the Los Amarillos concessions, and |
| within north-east striking structures such as those | | | | Barrick continues to control the exploration |
| tested at Cresta del Gallo. The style and mineralogy of | | | | concessions on the Chilean side of the border to the |
| alteration at Del Carmen Norte is typical for | | | | west. |
| high-sulphidation epithermal gold-silver systems with | | | | We began the 2009/2010 field season at Los |
| hydrothermal alteration zoned around cores of | | | | Amarillos by removing obstructions and improving |
| massive and vuggy silica, similar to the producing | | | | access roads to allow re-investigation of the zones of |
| Veladero gold-silver mine and the large Pascua-Lama | | | | hydrothermal alteration identified on surface to date, |
| deposit currently in development. The best result of | | | | including geophysical surveying (magnetometer and |
| previous drilling of the Del Carmen Norte system in the | | | | CSAMT). We are currently doing property-wide |
| late 1990s was 36 m of 1.06 g/t gold. | | | | stream sediment sampling, prospecting, geological |
| In addition to drilling, we have ongoing or planned | | | | mapping and rock sampling to evaluate the effectively |
| geological mapping, mechanical trenching, and | | | | unexplored remainder of the property. Diamond drilling |
| geophysical surveying (ground magnetics and | | | | will be conducted in the subsequent field season if |
| CSAMT) of the Del Carmen Norte hydrothermal | | | | warranted by the mapping, sampling and geophysical |
| system. Targets to be drill tested during the current | | | | results. |
| field season include: Cresta del Gallo; Brecha Límite, | | | | RI: So why should investors be interested in Malbex at |
| with locally prominent fracture (vein) controlled copper | | | | this time? |
| mineralization; Quebrada Pedegrosa with veinlets of | | | | TM: I think we can reduce it to these basic elements: |
| jarosite (±quartz-hematite) and high-grade gold | | | | we have projects with the potential to produce |
| (several samples >100 g/t Au); Brecha Opportune; | | | | "elephants", located in a pro-mining jurisdiction, and the |
| Rojo Grande-Lion King, where gold accompanies | | | | talent and experience to properly manage and finance |
| ENE-striking hydrothermal breccias that cut massive | | | | them. |