Tim Warman can't help but laugh when asked if he feels any pressure to discover the next Fruta del Norte.
Warman, president and CEO of newly listed Malbex Resources (MBG-V) - along with the majority of Malbex's board and management -- were part of the Aurelian Resources team that discovered the massive 13.7-million-oz. gold deposit in Ecuador.
"A lot of people are backing us because of the team," says Warman, Aurelian's former vice-president of corporate development. "Obviously, there's pressure to perform and we're working diligently to try and meet those expectations."
The company, which holds three gold projects totalling 224 sq. km in Argentina's San Juan province, boasts an all-star board composed of Warman, former CEO Patrick Anderson; former director (and former co-CEO of Noront Resources [NOT-V]) Joseph Hamilton; plus FNX Mining (FNX-T) CEO Terry MacGibbon, and Agnico-Eagle Mines (AEM-T) chief financial officer David Garofalo.
Other key members of the junior's management team are also Aurelian alumni. Warman says the group wanted to find a way to work together again, after being put out of work by Kinross Gold's (K-T) takeover of the company in 2008. They found that opportunity in Malbex, which was started as a private company in 2008 by Toronto lawyer Frank Davis, along with Hamilton, MacGibbon and Rob Pollack. Malbex had put in the winning bid for some gold concessions in San Juan province that had just come up for tender and Hamilton approached Warman, Anderson and former Aurelian country manager Carson Noel about joining the company.
A visit to the properties, in the El Indio belt that also hosts Barrick Gold's (ABX-T) Veladero mine and Pascua Lama development project, clinched the deal, Warman says. He describes the geology as "spectacular" -- consisting of large systems that haven't been well explored.
The projects are also easily accessible, unlike most in the high Andes.
And, just as important, both the town and province of San Juan have a history of mining and understand the benefits of the industry, Warman explains.
"We met a lot of the local politicians and there was a real sense that the government provincially and federally was very supportive of mining and obviously that was a nice change from Ecuador."
The local yellow pages in the town of San Juan, he adds, had about 20 pages of listings for mining contractors.
Whether the El Indio properties - Del Carmen, Despoblados and Los Amarillos -- will prove worthy of the Malbex team will be revealed by the company's exploration program, currently under way.
All three projects have seen limited exploration in the past, limited to a three-year period in the mid- to late 1990s.
Del Carmen, at the southern end of the El Indio belt, has even seen some reverse-circulation drilling, with the best hole yielding 36 metres at 1.06 grams gold per tonne - good at current gold prices, Warman notes, but probably not so great in 1998, when it was reported.
The company is spending US$6 million on exploration at its projects in the 2009-10 field season, which started in October and will end in May. Del Carmen will see 5,000 metres of drilling testing several surface targets down to a maximum of 200-250 metres depth.
The company is seeking a better understanding of the Del Carmen alteration zones and to define new drill targets. Assay results from eight holes have been released, with the company announcing the results of two holes testing the Brecha Limite target on Feb. 17.
Hole DDHC-10-008 intercepted 35 metres of 2.2 grams gold per tonne and 42.9 grams silver from 18 metres depth, including 16 metres of 4.03 grams gold and 81.8 grams silver.
Another hole, collared 60 metres northeast along strike, was abandoned at 34.8 metres depth because of drilling problems, but returned 0.78 gram gold and 11.68 grams silver over the last 10.8 metres.
The project contains two styles of mineralization: low-grade disseminated gold and silver (similar to mineralization at Veladero) and higher-grade, structurally controlled gold, silver and copper (similar to El Indio)
The Despoblados project, to the north, was originally supposed to see up to 3,000 metres of drilling, but harsh, winter-like weather during what is the summer season in the southern Hemiphere may cut the program short.
Despoblados has geologic similarities to Fruta del Norte, Warman says: "A big regional structure, a couple of pull-apart basins and the basins have very well developed sinter deposits in them."
He explains: "A sinter is in indicator that somewhere at depth there's an epithermal system - whether it's mineralized or not, it doesn't tell you that, but it does tell you that a system is there."
Meanwhile, Los Amarillos, still father north, is a grassroots project where stream-sediment sampling and regional exploration is being carried out.
Malbex has 5.5-year exploration agreements with the arm's length provincial mining agency IPEEM that can be converted into mining licences for a modest fee, plus a 5% royalty (3% to the province, 2% to IPEEM). Warman says Malbex plans to keep one or two of the projects, depending on what it finds.
At the end of September, the company had about $8.7 million in its treasury, having raised $10.6 million last summer as a private company, before completing a reverse takeover of Arapaho Capital and listing on the TSX Venture Exchange in the fall. Insiders hold 29% of Malbex shares.
The company has 49.3 million shares outstanding and recently traded at 58¢ per share.
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