Malbex Resources

Despoblados is a low-sulphidation epithermal gold-silver target with similarities in geological setting to Kinross' 13.7 million ounce Fruta del Norte deposit in Ecuador. The principal similarities are:

• Sequences of epiclastic rocks (sandstone and conglomerate) associated with major regional strike-slip faults
  • at Despoblados, the Pascua-Lama/Veladero structural corridor;
• the poorly sorted epiclastic rocks are interpreted to represent pull-apart basin sequences that were deposited due to extension during fault motion in the regional structure;
• beds of siliceous sinter (see photo above), evidence for surficial hot springs during the deposition of the epiclastic sequence and
• hence suggestive of a buried epithermal target with little other evidence at surface of the underlying (or nearby) contemporaneous hydrothermal system.

There are two discrete areas of outcropping pull-apart basin deposits within the Pascua-Lama/Veladero structural corridor at Despoblados; both contain sinter. Exploration by previous operators focused on the large area of visible hydrothermal alteration with outcropping narrow low-sulphidation veins outside the structure and neither of the two basins has been drill tested.

During the 2009/2010 field season, Malbex completed a program of mapping and ground geophysical surveys (magnetometer and CSAMT) to identify zones of enhanced resistivity indicative of silicification and possible epithermal quartz veining beneath the basin cover. Diamond drilling is required to explore beneath the epiclastic rocks at Despoblados and will be conducted, if warranted by the results of these studies, in the 2010/2011 field season.

Access to the Despoblados project is excellent as the all-season access road to the Veladero Mine and Pascua-Lama development site crosses the centre of the property and the two pull-apart basins.