Malaga Inc.
TSX : MLG

Malaga Inc.

January 17, 2011 07:00 ET

Malaga Achieves Record Production Level in 2010 and Forecasts to Be Profitable in 2011

MONTREAL, QUEBEC--(Marketwire - Jan. 17, 2011) - Malaga Inc. (TSX:MLG) is pleased to announce a record production of 71 996 MTU(1) in 2010 at the Pasto Bueno tungsten mine in Peru, an increase of 13.6% compared with 2009. This increase stems from the expansion project that Malaga undertook in 2009 which delivered increased production capacity.

Also, the APT price, a semi-finished tungsten product whose price fluctuates daily on the London Metals Bulletin, has risen 81% since January 2010, from US $185 per MTU to its current price of US $335 per MTU.

This spectacular increase is mainly due to industrial growth of the major users and a global shortage of tungsten supply. Moreover, the United States and the European Union have declared tungsten to be one of the 17 strategic metals in high demand, and have indicated that the metal should be sourced in politically-stable countries to secure its supply.

In 2011, given its production levels and the current APT price, Malaga expects to generate net profits.

Competitive Advantage

One of the major competitive advantages of Malaga's operation is its low cost per MTU, in part due to its hydroelectric power supply. The feasibility study for the second phase of hydroelectric development of lakes Pelagatos and Plata is now complete and can be used to complete a concession application, a report on the non-existence of archaeological remains and an environmental impact study. The current value of the 35 MW project is US $120 million with an IRR of 12.5%. The shareholders of Hidropesac, namely Malaga with 49% and Emerging Power Developers with 51%, must organize the financing of the project in 2011 by debt, equity or carbon credits.

Exploration and Development

The Malaga management team plans for a major $3-$4 million exploration and development program on its property in 2011. This investment will enable the Company to better define the mine's potential and provide for production over the longer-term. The manto area identified to the south of the property, where high tungsten grades have been obtained, is expected to be a top-priority target at the beginning of the year. Construction of the access road to the area is nearly complete.

Corporate Development

The Company recently announced the appointment of Pierre Monet as President and Joey Trombino as Vice President and Chief Financial Officer. Jean Martineau remains Chairman of the Board and Chief Executive Officer. The Company also has a new website at www.malaga.ca.

On January 23 and 24, the Management and technical team of Malaga will be at Booth #828 during the Vancouver Resource Investment Conference.

(1)  MTU or Metric Ton Unit equals 10 kg; 1 tonne is equal to 100 MTU.

ABOUT MALAGA

Malaga Inc. owns and operates a mine in Peru and is one of the few companies outside of China that produces tungsten. Malaga is a low cost producer due to the availability of hydroelectric power at its Pasto Bueno property in Peru and has a current production capacity of 500 tpd. Future plans are to increase production and thoroughly explore the property to increase reserves and resources.

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.

Contact Information

  • Malaga Inc.
    Jean Martineau
    Exec.Chairman and CEO
    514-288-3224
    or
    Malaga Inc.
    Pierre Monet
    President
    514-288-3224
    or
    Sun International Communications
    Nicole Blanchard
    Corporate Strategy and Investor Relations
    450-973-6600
    nicole.blanchard@isuncomm.com