Malaga Increases Its Resources by More Than 140% and Its Reserves by 16% at the Pasto Bueno Tungsten Mine
Published : February 27, 2012

- Proven and probable reserves increase to 195,880 tonnes;

- Measured and Indicated resources increase by 104% to 814,096 tonnes;

- Inferred resources reach 4.2 million tonnes

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Keywords :   China | Market | Peru | Tungsten |

MONTREAL, QUEBEC--(Marketwire - Feb. 27, 2012) - Malaga Inc. (News - Market indicators)(OTCQX:MLGAF) is pleased to announce an updated reserve and resource calculation compliant with National Instrument 43-101 of its Pasto Bueno tungsten mine located in Northern Peru. The report was prepared by the independent mining consultancy firm Pincock, Allen & Holt.

The resource estimate includes 195,880 tonnes of proven and probable reserves with a WO3 average grade of 0.66%, 814,096 tonnes of measured and indicated resources with a WO3 average grade of 0.78%, 4,168,216 tonnes of inferred resources comprised of 3,718,216 tonnes with a WO3 grade of 0.83%, and 450,000 tonnes with a WO3 average grade of 0.14% coming from the Huaura tailings pond. The measured and indicated resources are inclusive of reserves. The complete report and its appendixes will be filed on SEDAR (www.sedar.com) in the next 45 days and will also be available on the Company's website.

"We are very pleased with the upgraded resource estimate at the Pasto Bueno mine," said Pierre Monet, President and CEO of Malaga. "We have been increasing resources and reserves every year since restarting the production at the mine in 2007. At current production rates, we have close to two years of reserves."

Mr. Monet noted that these figures do not include the mantos located on the southern part of the property that the Company started to drill in 2011. "There is still significant potential upside to come with future drilling campaigns on this underexplored part of the property. In addition, we are also investigating the feasibility of re-processing 450,000 tonnes of inferred resources from our tailings pond", he said.

The summarized table of reserves and resources as of November 25, 2011 is as follows:

NATIONAL INSTRUMENT 43-101 COMPLIANT TECHNICAL REPORT
CATEGORY 2011 2010  
TONNES GRADE % WO3 TONNES GRADE % WO3 % increase in tonnage
Proven Reserves 86,605 0.66% 81,696 0.71% 6%
Probable Reserves 109,275 0.66% 87,731 0.68% 25%
Total Reserves 195,880 0.66% 169,427 0.70% 16%
Measured Resources 79,715 0.76% 64,757 0.90% 23%
Indicated Resources 734,382 0.78% 334,088 0.73% 120%
Total M&I Resources 814,096 0.78% 398,845 0.75% 104%
Inferred Resources 3,718,216 0.83% 1,820,641 0.70% 104%
TAILINGSInferred Resources 450,000 0.14% - - -
Total Inferred Resources 4,168,216 0.76% 1,820,641 0.70% 147%
* Measured and Indicated Resources include all the Proven and Probable Reserves

Cut-off for reserves: 0.44% W03

Cut-off for resources: 0.36% W03

Included in the reserves are all the measured resources diluted by 20 cm of width for veins at least one meter wide

The increase in reserves and resources stems from ongoing underground development and exploration at Pasto Bueno. In 2010 and 2011, 1,929 meters of drilling were completed, mainly in the Consuzo area (Loreto vein), which yielded indicated resources of 233,352 tonnes grading 0.75% WO3 and 2,161,572 tonnes of inferred resources grading 0.86% WO3 .

During the second half of 2011 and the early part of 2012, Malaga undertook a first exploratory drilling campaign in the southern part of the property (the mantos), but the results of that campaign are not included in this reserve and resource calculation.

Mining Methods

Malaga employs three mining methods including: overhand cut and fill, shrinkage stoping and a variation of room and pillar using backfill. The overhand cut and fill and shrinkage stoping are used on steeply dipping veins while the room and pillar is used on veins dipping 45° or less. The mine production at Pasto Bueno is approximately 350 tpd with a plant capacity of 500 tpd. The processing is uniquely carried out by gravity and the final product is a premium concentrate containing at least 70% WO3. The recently upgraded tailings pond will have, at 500 tpd, a life of 5 to 6 years. The dike will be completed after the rainy season in April.

Strict QA/QC procedures were followed for all the samples and the quality of sample preparation, security, integrity and chemical analyses was equal to or exceeded current industrial standards and the requirements of NI 43-101.

The resource and reserve estimate was prepared by Richard Kehmeier, C.P.G., and Richard Addison, P.E., C.Eng., of Pincock, Allen & Holt, in Golden, Colorado, who are Qualified Persons ("QPs") as defined by NI 43-101. Pincock, Allen & Holt, Mr. Kehmeier and Mr. Addison are not associated in any manner with Malaga Inc. or any of its subsidiaries or affiliates. This Press Release has been read and approved by Malaga's Qualified Person, Mr. Alonso Sanchez, Chief Geologist.

ABOUT MALAGA

Malaga Inc. owns and operates the Pasto Bueno 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 generated on its property. While Malaga's production capacity represents about 10% of the tungsten available for sale outside of China, the Company plans to increase production and is currently exploring 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 results, performance or achievements 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.



Pierre Monet
President and Chief Executive Officer
Malaga Inc.
(514) 288.3224
or
Nicole Blanchard
Corporate Strategy and Investor Relations
Sun International Communications
(450) 973.6600
Data and Statistics for these countries : China | Peru | All
Gold and Silver Prices for these countries : China | Peru | All

Malaga Inc.

PRODUCER
CODE : MLG.TO
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Malaga is a gold and tungsten producing company based in Canada.

Malaga holds various exploration projects in Peru.

Its main asset in production is PASTO BUENO in Peru.

Malaga is listed in Canada and in United States of America. Its market capitalisation is CA$ 918 375 as of today (US$ 881 456, € 674 490).

Its stock quote reached its highest recent level on June 20, 2008 at CA$ 0.49, and its lowest recent point on July 15, 2013 at CA$ 0.01.

Malaga has 183 675 000 shares outstanding.

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Annual reports of Malaga Inc.
2007 Annual Report
Nominations of Malaga Inc.
12/2/2011Announces Appointment of Pierre Monet as President and Chief...
6/23/2011Appoints Three New Board Members
7/8/2008appoints Paul Cregheur to the Board of Directors
6/26/2008appoints three new Directors
12/20/2007Appoints a new board member
Financials of Malaga Inc.
4/3/2013Publishes Year-End Results
8/22/2008Q2 2008 financial results and outlook for 2008
4/14/2008Reports its year end financial results for 2007
11/15/2007reports net earnings in its third quarter 2007
8/16/2007Reports $6,749,432 revenue from the sale of gold and tungste...
5/23/2007reports sales of $2.3 million of tungsten concentrate for th...
4/13/2007files its audited consolidated financial statements and anno...
Project news of Malaga Inc.
5/31/2011(Pasto Bueno)Announces a $1.5 Million Diamond Drilling Campaign in the Co...
4/24/2008(Pasto Bueno) Pasto Bueno: Commissioning of the first phase of the Pasto ...
3/3/2008(Pasto Bueno)discovers new tungsten mineralized vein structures at Pasto ...
11/13/2007(Pasto Bueno) Pasto Bueno: Drilling Reveals New Tungsten Mineralized Zone...
5/15/2007(Pasto Bueno)commercial production begins at the Pasto Bueno mine
Corporate news of Malaga Inc.
6/6/2013Files a Notice of Intention to Make a Proposal Under the Ban...
5/21/2013Publishes Q1 Results
4/9/2013Sells Its Hydro Electric Power Plant
11/9/2012Update on Mining Operations
11/9/2012Update on Mining Operations
10/22/2012(Pasto Bueno)Pasto Bueno Process Plant in Care and Maintenance
10/22/2012(Pasto Bueno)Pasto Bueno Process Plant in Care and Maintenance
8/15/2012Announces Its Q2 Results
5/9/2012Maintains Profitability and Generates Cashflow From Operatin...
4/17/2012to Recover Additional Tungsten From Its Tailings Pond
3/28/2012Improves Profitability and Generates a Net Income of $5.6M a...
2/27/2012(Pasto Bueno)Increases Its Resources by More Than 140% and Its Reserves b...
2/16/2012to Build New Hydroelectric Plant in Peru
1/9/2012(Pasto Bueno)Announces Appointment of Fernando Pajuelo Rincon as General ...
10/4/2011Joins OTCQX-"MLGAF"
8/15/2011Reports Financial Results for Second Quarter 2011: Generates...
6/17/2011Generates a Net Income of $0.8 Million and an EBITDA of $1.3...
5/20/2011Says it is Not Aware of Any Undisclosed Development That Wou...
4/11/2011Reports Record Sales of US $4.5 Million in the First Quarter...
3/31/2011Reports Income of $1.1 Million From Mining Activities
10/30/2007 Announces the Final Distribution Ratio of Dynacor Gold Mine...
9/26/2007senior management changes within the company
7/17/2007Change of corporate name and trading symbol (previously Dyna...
4/17/2007has 100% ownership of its Acari property in Peru
3/21/2007signs an engagement letter of up to CA$5 million with D&D Se...
2/20/2007To Spin Off Gold Assets To Shareholders
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