Malaga Inc. (malaga) Symbol: MLG Toronto Stock Exchange(TSX)
MONTREAL, March 2 /CNW Telbec/ - Malaga Inc. (TSX: MLG) is pleased to announce that it has entered into a supply agreement with Global Tungsten & Powders Corp. ("GTP") for the sale of its tungsten ore concentrates produced by Malaga's subsidiary at the Pasto Bueno mine, Huaura plant in Peru (the "Supply Agreement").
The Supply Agreement provides for a monthly minimum quantity of tungsten ore to be acquired by GTP from Malaga until February 2014. It provides also that GTP shall pay Malaga in advance a sum of US$1,200,000 within thirty (30) days of the execution of the Supply Agreement, to be applied against Malaga's invoices over the last concentrates delivered by February 2014.
As part of the Supply Agreement, GTP has undertaken to finance Malaga for an amount of US$3,800,000 (the "Financing"), through the issuance by Malaga to GTP of 5-year convertible secured promissory notes (the "Notes"). The Notes can be converted into common shares of Malaga upon the occurrence of certain events with the prior written consent of GTP at a price equal to the volume weighted average trading price of the common shares of Malaga on the Toronto Stock Exchange (the "TSX") for the ten trading days immediately preceding the date of the notice to be given by Malaga, less a discount of 15%.
The closing of the Financing is scheduled no later than March 31, 2009. The Financing is subject to approval by the TSX. The Notes will be subject to a four-month hold period.
The proceeds of the Financing will be used for the purchase of machinery and equipment by Malaga's subsidiary, Dynacor Exploraciones del Perú S.A. ("Dynacor S.A.") and to fund further development of Dynacor S.A.'s operations at the Pasto Bueno mine.
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%.