Malbex proving up resources in the prolific El Indio gold belt
www.malbex.ca • 416.628.0215
The stream of impressive results from Malbex Resources (TSX-V: MBG) is rightfully boosting CEO Tim Warman’s confidence. In its second drill season, the company’s flagship Del Carmen project in the Argentina side of the rich El Indio Gold Belt outlined some stunning gold assays. These include hole 52, the best overall, with an intercept of 267 metres grading 2.05 g/t gold and 29.3 g/t silver. Under the guidance of a team of top-notch geologists, some of whom are former Aurelian executives, Malbex expects to reach a number of milestones over the next several months. “We will build on the track record we had at Aurelian, where we took a penny stock to a $1.2 billion company, which was sold to Kinross in 2008,” says Warman.
Resource Intelligence: What were the highlights of your drilling last year at Del Carmen, your flagship project in Argentina?
Tim Warman: It was our second drill season at Del Carmen and we completed enough drilling on the Rojo Grande discovery to be able to put out an initial resource. Based on our earlier drilling, we were expecting long intercepts of 0.5-1.5 g/t gold, so we were very pleased when a number of holes had long intercepts over 2 g/t, and some much higher grade intervals such as 5 metres of 48 g/t gold in hole 42. Hole 52 was the best overall, with an intercept of 267 metres grading 2.05 g/t gold and 29.3 g/t silver.
RI: You reached a milestone last year by releasing the first-ever resource estimate on Del Carmen. What does this tell you about the project’s potential?
TW: The resource measures 25.4 million tonnes at 1.00 g/t gold and 13.3 g/t silver for 816,600 ounces of contained gold and 10.9 million ounces of contained silver. The deposit is at or very near surface and is contained within a pit shell with a low strip ratio of 2:1. Also, it is fully oxidized and should be amenable to simple, low-cost heap-leaching as at Barrick’s Veladero mine up the road (operating costs of US$256/oz in 2010). Obviously, we need to find more mineralization for this to become an economic mine but we are very pleased with how it is shaping up so far. The deposit is open in a number of directions. Given that the resource covers less than 2% of the total 9 km2 alteration system we are exploring, there’s a lot of room for expansion.
RI: Are you satisfied with what you achieved in 2011?
TW: 2011 was a very good year for Malbex, with the highlights being the drill results, resource and successful funding for the current drill season. Like many junior companies, we were at the mercy of very choppy markets. We also had some challenges with the drilling speed of our contractor and did only about half the metres we had planned. We were, however, very pleased with the results and were able to achieve our goal of coming out with a resource.
RI: What are your priorities for this year?
TW: Our priorities for this year are to 1. Grow the resource, 2. Discover additional mineralized zones at Del Carmen, and 3. Provide further proof of the economics of the deposit through phase 2 metallurgical testing. Yes, we are on track. We’re working with
our contractor to drill faster this year and the geophysical survey has identified a number of exciting new targets. Results to date have been excellent.
RI: What is the company’s financial position?
TW: We are well-funded for this year’s program. At our year-end of September 30, 2011 we had working capital of $15.8 million. Also, there is good potential for $8 million worth of $0.40 warrants to be exercised prior to their expiry this June, further strengthening the treasury.
RI: Could you summarize the attractive features of your lead project?
TW: Del Carmen has good potential for multi-million ounce discoveries, and the type of shallow, oxide gold-silver deposit we’ve discovered is unlikely to be technically challenging or high cost. It is in the El Indio Gold Belt, which has a tremendous history of discoveries, despite being unexplored prior to the mid-90s. The province of San Juan is one of the most pro-mining provinces in Argentina, with three operating gold mines,
one large gold-silver mine in development, three large copper porphyry projects and many exploration projects. Barrick, Yamana, and Xstrata are all operating there.
RI: How do you plan on showing continued value for shareholders?
TW: Growing resources, making new discoveries, de-risking and advancing our projects. We will build on the track record we had at Aurelian, where we took a penny stock to a $1.2 billion company, which was sold to Kinross in 2008.
RI: What’s next for Malbex over the coming 12 to 18 months?
TW: From Del Carmen, more drill results, an updated resource, phase 2 metallurgical results. In addition, we expect to start putting out results from our earlier stage gold project in Peru and to acquire some additional projects in Argentina.
RI: Is there any other information that you think investors should know?
TW: The team that is going to deliver on our plans is top-notch. Our technical group is led by Dr. Peter Stewart, who was part of the Aurelian team. He has been able to attract a talented and experienced group of Argentinean geologists that know the Andes well and were trained at some of the best international mining companies. We are guided by a board of directors with a proven track record: Patrick Anderson, David Garofalo, Joe Hamilton and Terry MacGibbon.
- Exploring in the El Indio Gold Belt, host to more than 35 million ounces of gold in just 3 mines
- Inferred in-pit resource on Del Carmen project measures 25.4 million tonnes at 1.00 g/t gold and 13.3 g/t silver for 816,600 ounces of contained gold and 10.9 million ounces of contained silver
- $8-million exploration program underway at Del Carmen: two rigs drilling to expand resource and test new targets, extensive geophysical survey, and advanced metallurgical testing