Aug. 13, 2009 (Baystreet.ca) --
MONTREAL -- Malaga (TSX:MLG) is pleased to report its financial results for the 3-month period ended June 30th 2009. The consolidated financial statements (all currency figures appear in Canadian dollars unless otherwise specified) along with the management's discussion and analysis are available on the Company's website at www.malaga.ca and the documents have been filed with SEDAR at www.sedar.com.
Q2 2009 HIGHLIGHTS
The existing 250 tons per day (t/d) ore processing plant will be upgraded to a capacity of more than 500 t/d (maximum planned capacity is 600 t/d). Consequently
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- Closing of a new 5-year tungsten supply contract as well as a financing
agreement that was closed on April 1st by which Malaga received
US$ 5.0 million, without interest for the first 12-month period, to
enable the completion of the upgrading of the Company's production
capacity from 250 tons per day to 500 tons per day
- Positive cash flow generated from operating activities before change in
non-cash working capital items
- Q2 income from sales of $2.5 million (same level as Q2 2008)
- Q2 sales of 13,845 MTUs of tungsten concentrate (14,411 MTUs in
Q2 2008)
- Net loss in Q2 2009 of $1.3 million ($1.0 million in Q2 2008)
- Tungsten ore grade of 0.80% as compared to 0.82% during Q2 2008
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during Q2 2009, Malaga increased the pace of mine development and underground exploration following the closing of the above mentioned financing agreement on April 1st. Purchasing of all the new mining equipment (front loaders, electrical carts and electrical transformers, etc) that will be needed to increase the production capacity is underway. All the necessary engineering studies have been completed and the construction phase has begun.
PRODUCTION
Production is summarized in the table below:
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Three-month periods Six-month periods
ending June 30th ending June 30th
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2009 2008 2009 2008
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Ton processed 22,541 21,811 42,720 42,064
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Grade (%) 0.80 0.82 0.85 0.80
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Production (MTU) 14,934 14,068 30,536 27,391
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RIGHTS OFFERING
As of August 5th, 2009, 35.8 million Rights were exercised by the Company's shareholders leading to the acquisition of 9.0M ordinary shares at a price of $0.10 per share. Gross proceeds of $0.9M will be used for general operational costs.
HYDROELECTRICITY
The Pasto Bueno hydroelectric power plant has now been running on a continuous basis since the beginning of 2009. Average power consumption during the current quarter was 572 kWh with a maximum peak consumption of 981 kWh. The installed capacity of the two generators is 600 kWh, the difference (the power required to sustain the peak consumption) was supplied from the national electricity grid. Thus, production from the Company's hydroelectric power plant was able to meet 73% of power requirements of the plant and the mine, the balance (27%) was purchased from the national electricity grid. The Company is working on optimizing the efficiency of its installations in order to minimize the need to purchase electricity from external sources and thus decreasing its operating costs.
OUTLOOK
Malaga has begun the upgrading of its ore processing plant and the mine's production capacity in order to increase its production at Pasto Bueno and improve the Company's profitability. Production is expected to reach 325 t/d in Q4 2009 and 500 t/d in Q1 2010.
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.
SOURCE: MALAGA INC.
Jean Martineau, President & CEO, Malaga Inc., (514) 288-3224