Malaga Inc. reports $6,749,432 revenue from the sale of gold and tungsten in its second quarter 2007



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

    MONTREAL, Aug. 16 /CNW Telbec/ - Malaga Inc. reports its financial
results for the three months ended June 30, 2007 (all currency figures appear
in Canadian dollars unless otherwise specified). The consolidated financial
statements along with management's discussion and analysis are available for
viewing on the Malaga website at www.malaga.ca, and the documents have been
filed with SEDAR at www.sedar.com.

    SUMMARY OF FINANCIAL RESULTS FOR THE SECOND QUARTER 2007
    compared to results for the same period in 2006

    
    - Revenue generated from the sale of gold and tungsten is $6,749,432 in
      Q2 2007, compared to $2,083,327 in Q2 2006. The gross margin deriving
      from gold and tungsten sales increased from $248,508 in Q2 2006 to
      $1,311,010 in Q2 2007. This significant increase is largely due to the
      beginning of commercial production at the Pasto Bueno tungsten mine on
      April 1, 2007.
    - Tungsten production recorded in Q2 2007 was 15 044 MTU's. The average
      sale price per MTU of tungsten was US$176. Cash operating cost per MTU
      was US$111. Revenue generated from the sale of Tungsten during Q2 2007
      was $3,047,394. The gross for margin deriving from tungsten production
      for Q2 2007 was $942,946. The average production rate for the
      three-month period was 210 tonnes/day, as the full capacity rate of
      250 tonnes was attained during the month of June.
    - Gold production, deriving from custom milling, at the Acari plant,
      increased to 5 134 ounces in Q2 2007, compared to 3 065 ounces in
      Q2 2006. The average sale price was US$655 per ounce in Q2 2007,
      compared to US$592 for the same period in 2006. Operating cost per
      ounce of gold was US$590 in Q2 2007, compared to US$536 in Q2 2006. The
      gross margin deriving from gold production for Q2 2007 was $368,064 as
      compared to $248,508 for the same period in 2006. The increase in the
      gross margin is directly related to the increase in production volume
      as well as the increase in the price of gold.
    - The Company recorded a net loss of $459,145 compared to $952,771 for
      the same period in 2006. The improvement is attributed mainly to an
      increase in gold sales and attainment of commercial operating capacity
      at the Pasto Bueno tungsten mine. The Company expects further
      improvement into the second half of 2007, as the full production
      capacity at the tungsten mine will continue to be maintained and
      moreover, increased.
    - Working capital at June 30, 2007 was $4,322,683 compared to a working
      capital of $3,003,895 on December 31, 2006.
    

    UPDATE ON PASTO BUENO

    Since the announcement, by way of press release on July 11, 2007,
tungsten production at the Pasto Bueno mine continues to operate at full
capacity levels of 250 tonnes/day. These levels were maintained throughout the
months of June and July, and will continue to be maintained in future months.
The Company is currently working on upgrading the mill, in order to reach a
level of 300 tonnes/day by Q4 2007. Also the Company expects to be connected
to the Peruvian National Electric grid by Q4 2007, which will greatly reduce
the operating cost per MTU, therefore increasing substantially the gross
margin.

    UPDATE ON SPIN OFF

    Malaga is working diligently toward the spin-off of its gold assets into
a new public company, namely Dynacor Gold Mines Inc. The new company will hold
all of the gold assets including the Acari mill, from which gold is produced
through custom milling, as well as the Casaden and Tumipampa properties.
    Malaga expects the filing of the preliminary prospectus of Dynacor Gold
Mines to be completed within the next upcoming days. The spin-off of its gold
assets to Dynacor Gold Mines is expected to be completed soon thereafter. A
follow-up press release will then be issued announcing the declaration of a
stock dividend and the distribution date for the distribution of the shares of
Dynacor Gold Mines to the shareholders of Malaga.

    COMPANY PROFILE

    Malaga is a mining company, which owns and operates through its
subsidiaries, a tungsten mine and gold plant with mining and exploration
activities focused in Peru. It holds 100% interest, and operates the Pasto
Bueno tungsten mine. In addition, the Company holds 44% interest in the
Peruvian company called Hidroelectrica Pelagatos. This corporation operates
the hydroelectric potential of the Pasto Bueno property.
    Malaga focuses on efficient and productive mining practices, in order to
optimize current operations. The Company is committed to growth, through
increasing its production levels, continuing exploration projects on existing
properties and through strategic acquisitions. It also seeks diverse growth
opportunities such as the hydroelectric potential through Hidroelectrica
Pelagatos.




For further information:

For further information: Marc Blais, President, Malaga Inc., (450)
922-6199; Jean Martineau, Chairman of the Board & CEO, Malaga Inc., (450)
667-3224; Christina Lalli, Investor Relations, Malaga Inc., (450) 922-6199;
Renmark Financial Communications Inc.: Barbara Komorowski:
bkomorowski@renmarkfinancial.com; Tina Cameron: tcameron@renmarkfinancial.com;
Media - Vanessa Napoli: vnapoli@renmarkfinancial.com, (514) 939-3989, Fax:
(514) 939-3717, www.renmarkfinancial.com

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MALAGA INC.

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