Malaga Inc. (malaga) Symbol: MLG Toronto Stock Exchange (TSX)
MONTREAL, Nov. 17 /CNW Telbec/ - Malaga Inc. (TSX: MLG) reports its financial results for the three-month period ended September 30, 2008. The consolidated financial statements (all currency figures appear in Canadian dollars unless otherwise specified) along with management's discussion and analysis are available at www.malaga.ca and the documents have been filed with SEDAR at www.sedar.com.
Q3 Overview
During the three-month period ended September 30, 2008, the Company recorded a net loss of $0.4M ($0.00 per share) compared to net earnings of $0.1M or $0.00 per share for the comparative period in 2007. The net loss is due to the low average of tungsten grade (0.783%) milled during Q3 2008, as compared to 0.927% during the same period in 2007. The loss of $0.4M represents an improvement of $0.6M in comparison with Q2 2008.
The Company is actively implementing a series of remedial actions to increase the tungsten grade. Therefore, Malaga has invested, during the last three-month period, $600,000 in mine development and has purchased $200,000 in capital assets which brings the total amount invested since the beginning of 2008 to $2.4M and $1.1M, respectively. The Huayllapon sector and the 13th level of Consuelo are expected to be operational during Q4.
In Q3 2008 mined tonnage increased (23,176 tons in 2008 compared to 21,867 tons in 2007), while recovery rates remained relatively steady (81.6% compared to 81.9%). The amount of tungsten concentrate sold reached 15,975 MTU's totalling sales of $3.2M (16.044 MTU for sales of $2.8M in 2007).
Cash, cash equivalents and short-term investments were $1.1M as of September 30, 2008, in comparison to $3.9M on December 31, 2007.
Operating results
Sales and production are detailed below:
Three-month Nine-month
period ended period ended
September 30 September 30
2008 2007 2008 2007
In MTU 15,975 16,044 42,056 31,795
Production:
Extracted tonnage 23,176 21,867 65,240 40,305
Recovery (%) 81.6 81.9 80.6 82.5
Grade (%) 0.783 0.927 0.80 1.025
Production (MTU) 14,805 16,593 42,196 34,114
$ US/MTU
Cash operating cost 139 116 144 119
Amortization and
depreciation 31 27 32 20
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Total operating cost 170 143 176 139
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Hydroelectricity
Hidropesac, held by Malaga at 44%, had initially planned to have two hydroelectric generators with a rated capacity of 600 KW/h online during the Q2 2008. All the necessary equipment and infrastructure were installed at the end of June 2008. However, during the testing phase at the end of June, a major problem occurred which led to significant damage in the water conduit that feeds the plant. Damage evaluation and repairs began immediately in July and were supervised by EDP, the Swiss partner in Hidropesac. The pressurized water conduit has been repaired and is now operational and was tested under pressure during the month of October.
As the tests were conclusive, the Swiss company EDP will proceed in November with some further tests. Following this, the plant will begin power production, which will decrease the fuel consumption of the mine.
Final commissioning of the Plant is planned for December 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%.