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Malaga Inc. (malaga)
Symbol: MLG
Toronto Stock Exchange(TSX)
MONTREAL, March 31 /CNW Telbec/ - Malaga Inc. (TSX: MLG) reports its financial results for the year ended December 31, 2008. The consolidated financial statements (all currency figures appear in Canadian dollars unless otherwise specified) along with the management's discussion and analysis are available for the viewing on the Malaga website at www.malaga.ca and the documents have been filed with SEDAR at www.sedar.com.
2008 HIGHLIGHTS
- Sales of 55,173 MTUs of tungsten concentrate adding up to $10,6 M
(45,338 MTUs - $8M in 2007).
- Cash and cash equivalents and short-term investments of $0,8 M as of
the 31st of December 2008.
- Negative working capital of $1.4 M.
- Investments of $3.3 M in mine development and $1.3 M in fixed assets.
- Net loss of $3.1 M as compared to net loss of $2.7 M in 2007.
- Cash flow used by continued activities before changes in non-cash
working capital items $0.5 M as compared to $1.6 M in 2007.
Mine development in the different zones proceeded forward during 2008.
Since the reopening of the mine 4,800 meters of access tunnels have been
excavated that allow the mining of new sectors such as the Chabuca vein
(Huayllapon sector) and Level 13 (inclinado) of the Consuelo vein. The newly
excavated tunnels also led to the discovery of new mineralized veins such as
Sagustin, Sauco and Violetta (cross-cut, level 10). Levels 7, 8 and 12 of the
Consuelo vein have also been deepened. All of this exploration work has
enabled a new estimate of the mine's reserves and resources to be published
(see below).
PRODUCTION
Mine production is summarized below:
2008 2007
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Tons of ore mined 88,763 61.928
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Recovery (%) 81.22 79.46
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Tungsten grade (%) 0.7973 0.9368
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Production (MTU) 57,480 46,098
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NEW TECHNICAL REPORT ON RESERVES AND RESOURCES
As detailed in a Press Release dated March 3rd, 2009, a new technical
report on Pasto Bueno estimates that the property contains the following
reserves and resources as of December 1st, 2008. The complete report and its
annexes have been filed on SEDAR (www.sedar.com).
Reserves Quantity (metric tons) Grade (% WO3)
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Proven 28,234 1.21
Probable 70,214 0.85
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Proven + Probable 98,448 0.95
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Resources Quantity (metric tons) Grade (% WO3)
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Measured 35,646 1.28
Indicated 106,844 0.98
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Measured + Indicated 142,490 1.05
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Inferred 1,204,000 0.82
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OUTLOOK FOR 2009
On February 27, 2009 Malaga concluded a financing agreement subject to final approval whereby the lender shall pay Malaga in advance a sum of US$1,200,000 that does not bear interest and to be applied against Malaga's invoices over the last concentrates delivered under the supply agreement and a further sum of 3.8 million US dollars to be paid to Malaga as follows: US$ 1.3 M - five days after final closing, US$ 0.9 M 30 days after closing, US$ 0.8 M - 90 days after closing and finally US$ 0.8 M - 120 days after closing. This loan will not bear interest for the first 12 months and will thereafter bear an interest equal to the 12- month LIBOR rate. (see Press Release dated March 2, 2009).
The funds will be used to further develop the Pasto Bueno mine and increase the tungsten grade mined and consequently the mine's operational profitability. Management estimates that the cost of this development is approximately US$ 2.0M. On closing of the financing agreement the company will also begin upgrading the ore processing plant and purchasing the necessary equipment in order to reach a daily processing capacity of 500 tons. Target date for a 500 ton/day capacity is Q1 2010 and the total cost is estimated to be US$ 3.0 M.
This Press Release has been read and approved by Alonso Sanchez, Malaga's Chief Geologist, who is the QP (Qualified person) for Malaga and who is a professional geologist member of the AIPG. The geological information in this Press Release is thus certified as National Instrument 43-101 compliant.
ABOUT MALAGA INC.
Malaga Inc. is a tungsten mining company that uses modern, efficient and productive mining technology. The Company is committed to growth, through increasing its tungsten concentrate production, continuing the exploration of the Pasto Bueno property, and through strategic acquisitions. It also seeks diverse growth opportunities such as developing the hydroelectric potential of the Pasto Bueno property, through Hidropesac, in which the Company holds 44%, as well as through its holding in Dynacor Gold Mines Inc., in which the Company owns 13.3%.
FORWARD-LOOKING INFORMATION
Certain statements in the foregoing may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Malaga, or industry results, to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statements. These statements reflect management's current expectations regarding future events and operating performance as of the date of this news release.