Malbex Signs Option Agreement for Gold Project in Southern Peru

TORONTO, ONTARIO -- (Marketwire) -- 08/16/11 -- Malbex Resources Inc. (TSX VENTURE: MBG) today announced that it has signed an agreement with project generator Lara Exploration Ltd. (TSX VENTURE: LRA) to earn up to a 75% interest in the Grace high sulphidation gold project in southern Peru. The early-stage Grace project consists of eight concessions covering 5,800 hectares in the southern part of Ayacucho Region. Prospecting, mapping and incomplete surface geochemical surveying by Lara have identified a 6 kilometre by up to 1.5 kilometre high-sulphidation-style alteration zone that has never been tested by drilling.

'We are delivering on our commitment to broaden our property portfolio by acquiring new high potential projects in mining friendly South American jurisdictions,' said Tim Warman, President and CEO. 'The Grace project hosts a large, well-preserved high sulphidation epithermal system that has never been drilled, in a location where our experienced technical team will be able to work on year-round. We will begin by negotiating with the nearby communities to develop land access agreements prior to commencing fieldwork. The first year of exploration will consist of comprehensive geochemical surveying, geological mapping and geophysical surveying to identify drill targets.'

Reconnaissance mapping and sampling by Lara have outlined extensive areas of well-preserved high-sulphidation epithermal alteration with locally anomalous gold, silver and epithermal pathfinder elements including arsenic, antimony and mercury. The geology of the area consists of andesitic volcaniclastic rocks cut by siliceous hydrothermal breccia bodies within wide halos of quartz-alunite and quartz-kaolinite alteration. The hydrothermal centres appear to be oriented along north-south and northwest-southeast structural trends. Numerous small-scale mines are found in the district, and the Grace project is immediately adjacent to the Apumayo project, currently being drilled by Minera Andina de Exploraciones S.A.C. The Grace project is located at an altitude between 3,900 and 4,200 metres, and will be explored mainly during the southern hemisphere winter and break in exploration at the flagship Del Carmen project in Argentina.

To view maps of the Grace project, visit www.malbex.ca/Projects/Grace.

The option agreement with Lara has two phases. During the first phase Malbex can earn a 55% interest in the project by (i) making staged payments of an aggregate of US$700,000 (including an initial payment of US$200,000 payable upon execution of the option agreement) with Malbex having the right to satisfy up to 50% of such payments by the issuance of common shares to Lara, and (ii) incurring exploration expenditures of an aggregate of US$3.5 million over 3 years (see table below for schedule). Malbex can earn an additional 20% in the project in the second phase (for a total 75% interest in the subsequent joint venture), by making (i) staged payments of an aggregate of US$1 million with Malbex having the right to satisfy up to 50% of such payments by issuance of common shares to Lara and (ii) incurring exploration expenditures of an aggregate of US$8 million and delivery of a pre-feasibility study within 4 years of initiating the phase two option. Malbex intends to satisfy 50% of the initial US$200,000 payment by issuing 224,855 common shares to Lara subject to approval of the TSX Venture Exchange. The common shares of Malbex that are issued pursuant to the option agreement will be subject to a four month hold period from the date of issuance thereof in accordance with the rules and policies of the TSX Venture Exchange and applicable Canadian securities laws.

                              PAYMENT EXPENDITURES
                    DATE        (US$)        (US$)                   comment
notice date                  $200,000                        commencement of
                                                                   agreement
12 months later (1 yr)       $200,000     $600,000
12 months later (2 yr)       $300,000   $1,200,000        minimum 1,500 m of
                                                            diamond drilling
12 months later (3 yr)                  $1,700,000        minimum 2,000 m of
                                                            diamond drilling
                    Completion of FIRST OPTION earns 55%
            $700,000 cash & shares, $3.5 million in expenditures
at exercise                  $250,000                 within 60 days of end,
of 2nd option                                            First Option period
12 months later (4 yr)       $250,000   $2,000,000
12 months later (5 yr)                  $2,000,000
12 months later (6 yr)       $250,000   $2,000,000
12 months later (7 yr)       $250,000   $2,000,000   delivery of a NI 43-101
                                                       pre-feasibility study
   Completion of SECOND OPTION earns another 20 % (75 % of joint venture)
            $1,000,000 cash & shares, $8 million in expenditures
               TOTAL: $1.7 million (cash and shares, 50/50),
                  $11.5 million in exploration expenditures

Peter Stewart, PhD, Vice-President Exploration of Malbex Resources Inc., is a Professional Geoscientist in the Province of Ontario, and is the Qualified Person as defined by NI 43-101 responsible for the technical information presented in this news release.

About Malbex

Malbex Resources Inc. is a gold exploration company led by experienced management and directors. The Company's projects are located in Argentina and Peru. In 2010, Malbex made a gold-silver oxide discovery at Del Carmen, its lead project in Argentina. An initial resource estimate of the Rojo Grande target at Del Carmen Norte is in progress. The Del Carmen project is located in the El Indio Gold Belt, which contains more than 35 million ounces of gold in current reserves and past production, including Barrick's Veladero mine and Pascua-Lama project. For more information, please visit www.malbex.ca.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain information that may constitute 'forward-looking information' under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, spending commitments (including those under the option agreement), future operations, results of exploration, anticipated financial results, future work programs, capital expenditures and objectives. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in the Company's annual information form under the heading 'Risk Factors'. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:

Malbex Resources Inc.

Tim Warman

President and Chief Executive Officer

(416) 628-0215


Malbex Resources Inc.

Marla Gale

VP Investor Relations

(416) 628-0215
ir@malbex.ca
www.malbex.ca