Malaga reports its financial results for Q2 2009



    
    Malaga Inc. (malaga)
    Symbol: MLG
    Toronto Stock Exchange (TSX)
    

    MONTREAL, Aug. 13 /CNW Telbec/ - Malaga 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

    
    - 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
    

    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 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:

    
                             Three-month periods          Six-month periods
                               ending June 30th            ending June 30th
                         ----------------------------------------------------
                              2009          2008          2009          2008
    -------------------------------------------------------------------------
    Ton processed           22,541        21,811        42,720        42,064
    -------------------------------------------------------------------------
    Grade (%)                 0.80          0.82          0.85          0.80
    -------------------------------------------------------------------------
    Production (MTU)        14,934        14,068        30,536        27,391
    -------------------------------------------------------------------------
    

    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.




For further information:

For further information: Jean Martineau, President & CEO, Malaga Inc.,
(514) 288-3224

Organization Profile

MALAGA INC.

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