Malaga Inc. (malaga)
Symbol: MLG
Toronto Stock Exchange (TSX)
MONTREAL, April 14 /CNW Telbec/ - Malaga Inc. (TSX: MLG) reports its financial results for the year ended December 31, 2007. 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.
Highlights for 2007
- The Pasto Bueno tungsten mine began commercial operation in April 2007
and attained its full production capacity of 250 tons per day in June
2007.
- Tungsten sales reached a record of 43,821 MTU's generating
$8.033 million.
- Gross earnings totalled $2,029,601 for the year.
- Important corporate reorganization by which the gold assets of Malaga
were transferred to Dynacor Gold Mines Inc. and of which 80% of the
common shares were distributed to the Company's shareholders before the
issuance of 10,000,000 common shares. Dynacor Gold Mines Inc. was
listed on the Toronto Stock Exchange in October 2007. Following this
transaction, the earnings from gold activities are presented in the
Company's financial statements as discontinued operations.
Principal Financial Data (in 000$)
2007 2006
-------- --------
Sales (tungsten) 8,033 -
Net loss 2,358 2,978
Cash flow used by continuing operations (1,828) (3,960)
Property, plant and equipment investment 1,003 1,812
Addition to mining properties 2,140 1,580
Working Capital (December 31, 2007) 4,367 3,003
Total assets 25,210 26,476
Shareholders' equity 19,826 22,364
Outstanding shares as at December 31 (000) 137,117 112,290
Weighted average number of outstanding common
shares (000) 122,391 108,969
Loss per share ($) 0.02 0.03
Loss per share from continuing activities ($) 0.03 0.03
Operating Activities
The Company recorded a net loss of $2,357,574 compared to $2,978,470 in 2006. This improvement is due to increased gold sales (discontinued activities) and the beginning of commercial production of tungsten in the second quarter of 2007. Gross earnings were $2,029,601 but were offset by the increase in administrative costs. This increase comes mainly from setting up a corporate structure to manage commercial operations of the Pasto Bueno tungsten mine, and the creation and spin off of Malaga's gold assets into a new corporation Dynacor Gold Mines Inc. The Company expects improved results in 2008, for several reasons, namely, an increase in production, a reduction in operating costs especially by a significant decrease in costs related to electricity, and finally, a significant reduction in administrative costs as compared to those of the first year of operation.
Working capital at December 31, 2007 was $4,367,057 compared to a working capital of $3,003,895 on December 31, 2006.
Update on Pasto Bueno Mine
The Company plans to continue upgrading the mill throughout 2008 step by step in order to accomplish its objective of doubling production levels, by the beginning of 2009.
In 2007, Malaga decided to allocate financial resources of about 2 million dollars for the next 2 years for exploration purposes in order to discover and increase current tungsten reserves at Pasto Bueno. An important 10,650 meter drilling program, as well as an underground exploration program in the Huaura and Huayllapon sectors has been initiated and the Company is confident that it will renew and increase its reserves in order to insure its long-term production goals. The first results are very positive, new WO3 mineralized structures have been discovered and our understanding of the geology of the mine has increased considerably and underscore the very significant potential of this tungsten mine (see press releases dated November 13, 2007 and March 3, 2008).
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%.