Technical Standards

The Corporation has designed and implemented a quality assurance/quality control (QA/QC) program for drilling, channel sampling or trenching programs conducted at the Projects.

Grab samples are selected pieces of rock collected to confirm anomalous or potentially economic concentrations of precious metals (Au, Ag), base metals (Cu, Mo, Zn, Pb) and path-finder elements commonly associated with epithermal mineralization (As, Sb, Hg, Ba). Chip-channel samples are one or more continuous samples of mineralized or altered rock collected with hammer and chisel over a measured interval. Sample locations are determined at the time of collection with handheld GPS readings. The Corporation does not intend to use the concentrations of chip or grab samples in future calculation of resource estimates. The samples are collected to confirm previously reported sampling results and to identify areas for more detailed future exploration and drilling.

Samples of significant drill intercepts will be sent to two additional independent laboratories to verify high grade gold and silver analyses. Metallic screen fire analyses for gold will also be run regularly of discovered mineralization as an additional QA-QC check. All core remaining after sampling is retained for verification and other future purposes. Rolls of corrugated cardboard are added to each row before the box cover is placed on each core box to minimize movement and loss of core during transportation as pallets of core boxes by commercial trucking service to the locked, Malbex-run facility in San Juan for secure permanent storage after each field campaign.

Diamond drilling by Malbex on the Projects in Argentina has produced either PQ (85 millimetre), HQ (63.5 millimetre), HQ-3 (61 millimetre) or NQ (48 millimetre) diameter core. Samples are sawn in half using sliding trays on electric-powered diamond core saws in the field camp. The Malbex QA/QC program for analyses of drill core consists of the insertion of at least one certified reference standard of known gold content, one blank and one field duplicate in every 20 to 21 samples. Pulped samples of certified reference material have been purchased from commercial companies that prepare these to internationally accepted standards. The certified reference materials ("CRM") used by Malbex have a range of gold concentrations from <1 to >15 grams per tonne and include non-sulphidic (oxidized) and sulphidic rock material. Blanks are samples of rock material known to have very low levels of gold. They are placed into the sample stream in order to test for adequate cleaning of the sample preparation equipment between samples, switching of samples or contamination of samples in the laboratory. Field duplicates consist of 1/4 core samples where the normal half core sample is halved again by Malbex staff at camp to make two equivalent samples and both samples are entered into the sample stream. The original sample is used as the value in the database.

Samples of significant drill intercepts will be sent to two additional independent laboratories to verify high grade gold and silver analyses. Metallic screen fire analyses for gold will also be run regularly of discovered mineralization as an additional QA-QC check. All core remaining after sampling is retained for verification and other future purposes. Rolls of corrugated cardboard are added to each row before the box cover is placed on each core box to minimize movement and loss of core during transportation as pallets of core boxes by commercial trucking service to the locked, Malbex-run facility in San Juan for secure permanent storage after each field campaign.

Sample Security

Sample numbers are written on the outside of individual plastic sample bags and a tag from the sample book is placed inside the bag with the half core. The bags were sealed using single-use staples with another sample tag placed in the folded and stapled portion of the plastic bag. Sealed sample bags are placed in large rice sacks (usually between five and ten samples per sack) and sealed again using single-use plastic cable ties with a unique identifier number. The sack number, sample numbers, sack weight and date are written on the outside of the sacks. The sealed sample bags are trucked to the ALS Global ("ALS") preparation laboratory in Mendoza, Argentina, mainly by Malbex staff, or rarely by commercial trucking service. The numbers of the rice bag closure seals accompany the shipment and the closures are checked by ALS staff for integrity and the closure numbers for agreement with the accompanying document.

All samples received by ALS are processed through a sample tracking system that is an integral part of that company's Laboratory Information Management System (LIMS). The system utilizes bar coding and scanning technology that provides complete chain-of-custody records for every stage in the sample preparation and analytical process, and limits the potential for sample switches and transcription errors. After receipt by the laboratory, bar-coding and inventory to the ALS database, samples are prepared using the PREP-31 procedure. The sample is weighed, dried and finely crushed with more than 70% passing the 2 millimetre screen. The crushed material is passed through a riffle splitter and 250 grams are separated to be pulverized until a minimum of 85% passes the 75 micron screen. ALS reported that this method was appropriate for rock chip or drill samples. Coarse reject fractions and excess pulped material are initially stored by ALS in Mendoza until delivery to the secure Malbex facilities in San Juan.

Pulped samples are shipped by air freight by ALS to their laboratories in La Serena, Chile, Lima, Peru or North Vancouver, British Columbia for analysis, depending upon work load. Prepared sample pulps are analyzed for gold by 30-gram fire assay with atomic absorption spectroscopy (AAS) finish (ALS code Au-AA23; upper and lower detection limits of 10 and 0.005 grams of gold per tonne). Over limit samples (in excess of 10 grams of gold per tonne) are re-analyzed by fire assay with gravimetric finish (code Au-GRA21) with detection limits of 0.5 and 1,000 grams of gold per tonne. The pulp is also analyzed using the 35-element ICP (inductively coupled plasma) -AES (atomic emission spectroscopy) following dissolution in agua regia. This package code includes base metal and silver determinations. Malbex requests ALS geochemical package ME-ICP41m with lower detection limits for mercury than normal (0.01 parts per million (ppm) compared with 1 ppm).

Other than the procedures of sample collection, bagging and sample shipment described above, no aspect of the sample preparation procedure is conducted by an employee, officer, director or associate of Malbex.