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

Montr�al, Qu�bec, August 16, 2007 - Malaga Inc. (TSX: MLG) 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 more information, please contact:

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

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