Malaga posts its financial results for 2009

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

MONTREAL, April 6 /CNW Telbec/ - Malaga Inc. ("MLG") released its audited financial statements for the year ended December 31, 2009. Management's discussion and analysis and the audited financial statements are available on the Company's website (www.malaga.com) and on SEDAR (www.sedar.com).

Revenue for the year amounted to $11.2M ($10.6M in 2008). A 23 % decrease in the sales price of tungsten was offset by an increase and higher grade when compared to 2008 (0.86 % compared to 0.80). The Company reported a net loss of $7.6M ($3.1M in 2008) or $0.05 per share ($0.02 in 2008). This increase is stemming from higher depreciation and amortization charge of $ 2.2M, as well as from a $1.5M write-down in the carrying value of an investment.

The Company's selling price of tungsten is based on the market sale price of APT (ammonium paratungstate). During 2009, this sale price of APT varied from US $170 to US $210, with an average price of US $, compared with US $248 in 2008. As of March 2010, it increased US $210. On March 12 2010, the Ministry of Resources from China announced that they would no longer accept demands for opening of new tungsten mines.

"Despite a difficult year in 2009, we invested $2.8 million in our milling equipment in order to double our production capacity from 250 tonnes per day (tpd) in 2009 to 500 tpd in 2010. We invested $2.3 million further in exploration and development in order to increase and quantify our ore resource support of our production. We also reduced our cost of sales by US$9/metric tonne unit (MTU)", commented Pierre Monet, Vice-President and chief financial officer of Malaga.

In a subsequent event of the end of fiscal year 2009, Malaga received an updated technical report from an independent firm, Vector Engineering Inc., in line with NI 43-101 requirements.

The Pasto Bueno mine had the following reserves and resources:

    
    Category                                   Metric Tonnes       WO3 grade
    -------------------------------------------------------------------------

    Reserves
    --------------------------------------
    Proven                                            81,686            0.71%
    Probable                                          87,731            0.68%
                                          -----------------------------------
    Total Reserves                                   169,417            0.70%
                                          -------------------
                                          -------------------
    Resources
    --------------------------------------
    Measured                                          64,757            0.81%
    Indicated                                        334,088            0.73%
                                          -------------------
    Total Measured & Indicated                       398,845
                                          -------------------
                                          -------------------
    Total Inferred                                 1,820,641            0.70%
                                          -------------------
                                          -------------------
    

The reserves are included in the measured and indicated resource. The economic potential of the mineral resources that are not in the reserve category has not been demonstrated.

"These are excellent results in that they indicate a 72% increase in reserves compared to 2008 and an increase of 180% in measured and indicated resources. These results are even more encouraging given that our 2009 exploration and development programs were designed to support production and not to increase the volume of reserves and resources. In 2009, our goal will be to accelerate our development programs in 2010, in order to not only replace extracted reserves but also to increase our measured and indicated resource", said Jean Martineau, President and CEO of Malaga.

Outlook 2010

The Company plans to reach a production rate of 500 tpd during the second quarter and this should yield profits. In January 2010 a sale agreement was concluded for an estimated 5,000 tonnes of copper and silver concentrate from accumulated tailings, and for the tailings to be accumulated in the future. The Company estimates that the proceeds of these sales will amount to more than $2.5 M during the first six months of 2010. Therefore, these sales combined with the reduction of amortization by approximately $33 per MTU should yield positive operating cash flows during the second quarter and net profits over the course of the second half of 2010. These positive cash flows will allow for an expanded production and will accelerate the development of the mine. The Company expects a steady increase in the sales price given that demand exceeds production. Effectively, there is no expected new production outside of China until 2014.

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, by continuing the exploration of the Pasto Bueno property as well as through strategic acquisitions. It also seeks diverse Peruvian 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 13.5%.

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: Jean Martineau, President & CEO, Malaga Inc., [phone]; Dale Nejmeldeen, Investor Relations, Malaga Inc., [phone], [email protected]; Nicole Blanchard, Corporate Strategy and Investor Relations, Sun International Communications, [phone]