Malaga Inc.
TSX : MLG

Malaga Inc.

September 27, 2011 07:00 ET

Malaga Updates on New Drilling Results at Pasto Bueno Mine

MONTREAL, QUEBEC--(Marketwire - Sept. 27, 2011) - Malaga Inc. ("MLG")(TSX:MLG), one of the world's very few tungsten producers outside of China, today announced that exploratory drilling on its Pasto Bueno property has confirmed the presence of economic mineralization below the Pelagatos river, an ore body that could be of similar continuity and quality as the ore mined in the past – in addition to the findings that suggest mineralization deeper than the previous operations had identified.

"With the growing demand for high-quality tungsten, and conditions that have limited access to new supplies worldwide, the potential for greater ore deposits identified at Malaga's wholly-owned Pasto Bueno property present a significant opportunity for the Company," said Pierre Monet, President of Malaga, Inc. "Additionally, the results of recent exploration continue to identify portions of the ore deposit that are of high quality."

Malaga's expanded exploration in the Consuzo Zone started during the second quarter of 2011 with the objective of exploring the Loreto vein in the area of the zone between a hole drilled in 2010 (HDD- 02-10)[1] and old production areas used by former mine owners in the 1980's. Two out of three diamond drill holes, totalling 1,462 meters intercepted the vein below the old operations and above the drill hole HDD-02-10[2].

The findings of the latest exploration support the Company's inferred resource calculation. In fact, the three most recent instances where exploratory drilling holes intercepted the Loreto vein in the deepest part of the ore deposit show mineralization 184 meters below the old operations (at 3,314 meters above sea level). These results suggest that the deposit may be even deeper and requires further exploration in the near future.

New Road Supports New Exploration

The construction of 8 km of roads, completed in June 2011, was a key element for allowing the exploration drill rigs to be hoisted up the mountain and begin exploration in a completely unexplored area of the Malaga property.

The access roads will allow Malaga to continue its broader plans to drill a total of ten holes and explore four mantos (Maciste, Candelaria, Gossan and Santa). The manto structures on the Pasto Bueno property are flat-lying, bedded, strata-bound ore deposits hosted by sedimentary and metamorphic rocks such as limestone, slate and quartzite. The results of the first drill holes into the mantos will be published in the coming weeks.

"We believe that the manto structures could correspond to the upper part of a skarn deposit formed through the contact between limestone and granitic intrusives or could be part of a large ore body at depth linking with the Loreto vein", said Alonso Sánchez, Chief Geologist of Malaga.

New Drilling Results / Technical Specifications

  • HDD-01-11 unveiled an old hollow 6.75 m in thickness that corresponds to an old gallery that connected the Loreto vein and which was not previously identified in historical data.
  • HDD-02-11 intersected the Loreto vein and assays reported 6.40 m in true width with the following lengths and grades:
    • 1.32 m @ 1.05 % WO3, 0.17 % Cu, 0.70 oz/t Ag;
    • 2.26 m @ 0.03 % WO3, 0.03 % Cu, 0.13 oz/t Ag; and
    • 2.82 m @ 1.06 % WO3, 0.72 % Cu, 1.87 oz/t Ag
  • HDD-03-11 intersected the Loreto vein and assays reported 6.90 m @ 0.01% WO3, 0.04 % Cu and 0.65 oz/t Ag.

The impact of new exploration on the Company's inferred resource calculations will be included in an updated NI 43-101 report in early 2012.

(1) HDD-02-10 drilled in 2010 (1.03 m @1.83% W03, see press release of February 7, 2011)
(2) See enclosed longitudinal map

This Press Release has been read and approved by Alonso Sanchez, P. Eng. and Chief Geologist for Malaga Inc. He acts as the qualified person ("QP") for the Company and is a geologist affiliated to the American Institute of Professional Geologists (AIPG).

About Malaga

Malaga Inc. owns and operates a mine in Peru and is one of the few publicly-traded producers of tungsten outside of China. Malaga is a low cost producer due to its gravimetric ore concentration process and the availability of hydroelectric power at its Pasto Bueno property. Malaga's production capacity represents 15% of the tungsten available for sale outside of China. The Company plans to increase production and continue to explore the property to develop its reserves and resources.

Forward-looking statements

Certain statements in the foregoing may constitute forward-looking statements which involve known and unknown risks, uncertainties and other factors that may cause Malaga's actual results, performance or achievements or industry results to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statements. The information provided reflects management's current expectations regarding future events and performance as of the date of this news release.

Pasto Bueno 2011 Drilling Summary
True Thickness Mineralization
Drills IdMine-AreaLength
Done
Intersection Depth(m)Structure (m)Mineralization
(m)
StructureWO3
(%)
Cu
(%)
Pb
(%)
Zn
(%)
Ag
(oz/t)
Mo
(ppm)
HDD-01-11Consuzo673.05340.95-347.706.75 V. Loreto
202.60-203.80 1.32 1.050.170.110.090.7020
HDD-02-11Consuzo425.00203.80-206.406.402.26V. Loreto0.030.030.020.030.1310
- 2
206.40-209.40 2.82 1.060.720.140.241.875
HDD-03-11Consuzo364.60317.30-327.106.906.90V. Loreto0.010.040.130.200.6587
- 3

A map is available at the following address: http://media3.marketwire.com/docs/malaga0927.pdf

Contact Information

  • Malaga Inc.
    Jean Martineau
    Chairman of the Board and Chief Executive Officer
    514 288-3224

    Malaga Inc.
    Pierre Monet
    President
    514 288-3224

    Sun International Communications
    Nicole Blanchard
    Corporate Strategy and Investor Relations
    450 973-6600
    Nicole.blanchard@isuncomm.com