Malaga Inc. (malaga)
Symbol: MLG
Toronto Stock Exchange(TSX)
MONTREAL, Nov. 15 /CNW Telbec/ - Malaga Inc. (TSX: MLG) reports its financial results for the three-month period ended September 30, 2007 (all currency figures appear in Canadian dollars unless otherwise specified). The consolidated financial statements 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.
SUMMARY OF FINANCIAL RESULTS FOR THE THIRD QUARTER 2007
Compared to results for the same period in 2006
- Cash flow from operations before non-cash working capital variation was $704,994 in Q3 2007 compared to a utilization of $519,709 for the same period in 2006. The improvement is attributed mainly to an increase in gold sales and the attainment of commercial operating capacity at the Pasto Bueno tungsten mine, in April 2007. - Malaga recorded net earnings of $101,349 in Q3 2007 compared to a net loss of $536,801 for the same period in 2006. The improvement is attributed to the same reasons mentioned in the above paragraph. The costs since the beginning of the year have been high because of the start-up of Pasto Bueno and reorganisation in Peru. These costs will be lower and the company expects further improvement as the production capacity at the tungsten mine will be increased. - Revenue generated from the sale of gold and tungsten is $8,061,216 in Q3 2007, compared to $2,117,836 in Q3 2006. The gross margin deriving from gold and tungsten sales increased from $202,245 in Q3 2006, to $937,829 in Q3 2007. This significant increase is largely due to an increase in gold sales and the start-up of the commercial operation of the Pasto Bueno tungsten mine during the second quarter of 2007. - Tungsten production recorded in Q3 2007 was 16 044 MTU's. Revenue generated from the sale of tungsten during Q3 2007 was $2,809,936. The gross margin, before depreciation, deriving from tungsten production for Q3 2007 was $994,992. The average production rate for the three- month period was 250 tonnes/day, as the full capacity rate of 250 tonnes was reached in June 2007. - Gold production, deriving from custom milling at the Acari plant, increased to a record 7,478 ounces in Q3 2007, compared to 3,200 ounces in Q3 2006. The average sale price was US$658 per ounce in Q3 2007, compared to US$589 for the same period in 2006. The average cost of sales per ounce of gold was US$603 in Q3 2007, compared to US$527 in Q3 2006. The gross margin (before depreciation) deriving from gold production for Q3 2007 was $450,426 as compared to $223,112 for the same period 2006. The increase in the gross margin is directly related to the increase in production volume. - Working capital at September 30, 2007 was $3,707,460 compared to a working capital of $3,003,895 on December 31, 2006. Also, between October 1st, 2007 and November 9, 2007, funds amounting to $2,579,771 were raised following the exercise of options and warrants.
SPIN-OFF
On October 24, 2007, 16,000,000 common shares (representing 80%) of Dynacor Gold Mines Inc. owned by the Company have been redistributed to their shareholders. As a result Malaga owns 13.3% of Dynacor Gold Mines Inc.
UPDATE ON PASTO BUENO
Throughout the third quarter, the Pasto Bueno mine has been producing at a steady level of 250 tonnes/day. The company is currently working on upgrading the mill, in order to increase production levels to 300 tonnes/day by Q1 2008. Also, the Company expects to be connected to the Peruvian National Electric grid by Q1 2008, which will greatly reduce the operating cost per MTU, therefore having a favourable impact on the gross margin.
COMPANY PROFILE
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 S.A., in which the Company holds 44%, as well as through its holding in Dynacor Gold Mines inc., in which the company owns 13.3%.