CONRAD SILVER PROJECT

Conrad is the Company’s flagship project and the one most likely to be a “company-maker” for Malachite. High grade, polymetallic silver-rich base metal mineralisation has been discovered at Conrad and 25,000m of resource definition drilling has been completed along a 2.2km length of the Conrad Lode system. Based on that drilling, a mineral resource containing 9.6 million ounces of silver, or 19.2 million ounces of silver equivalent, has been defined. Within that resource, a higher grade component, comprising 458,000 tonnes at a grade of 424g/t AgEQ (13.6oz/t AgEQ) has been defined (containing 6.2 million ounces of silver equivalent).

Preliminary economic modelling suggests that if the higher grade resource can be increased by further drilling to approximately 1,000,000 tonnes at a similar grade a viable new mining project could be established at Conrad. Malachite believes that objective can be achieved, as there are several areas within the existing global resource where drilling is currently too widely spaced for some additional high grade intersections to be brought into the higher grade resource category. A program of infill diamond core drilling commenced in June, 2010.

The Company has mapped the Conrad mineralised structure for a further 2.3km to the southeast of the existing resource, where it is marked by old workings, anomalous soil geochemistry and VLF-EM anomalies. An initial reconnaissance program of reverse circulation percussion drilling took place in this area in May/June, 2010, with a view to identifying additional ore targets. The results of that program indicated that the mineralisation, though persistent along strike, appears to be developed over wider but lower grade zones, more analogous with the so-called “Greisen Zone” at the northwestern end of the Conrad system than with the narrow, high grade lodes that make up the greater part of the existing resources at Conrad.