MONTREAL, QUEBEC -- (Marketwired) -- 04/03/13 -- Malaga Inc. ("MLG") (TSX: MLG) reports its financial results today for the year ended December 31, 2012. The management discussion and analysis and audited financial statements can be found on the Company's website (www.malaga.ca) and on SEDAR (www.sedar.com). All amounts are in US dollars unless otherwise indicated.
2012 Full Year Highlights
-- During the fourth quarter of 2012, the plant and mine were placed on care and maintenance. -- Non-cash impairment of $17.3M resulting for the lower carrying value of the cash generating unit, write-off of exploration and evaluation assets as well as taxes receivable from Peruvian authorities. -- On December 20, 2012, the Company entered into a $2.0M loan agreement with a Peruvian bank for a term of 36 months secured by the real estate in Lima. Proceeds in the amount of $1.5M have been received. -- The Company is unable to discharge all of its financial obligations that are currently due and as such has announced that it is examining all possible alternatives to obtain financing or conclude a transaction with an investor that could result in a merger or sale of a portion or all of its assets. -- Average APT (ammonium paratungstate, a semi-finished product) price of $374/MTU in 2012 compared to $424/MTU in 2011. As at March 28, 2013, the APT price was $348/MTU.
For the full year 2012, Malaga generated a net loss of $19.9M (net income of $5.6M in 2011) for a loss per share of $0.11 (earnings per share of $0.03 in 2011) The net loss in 2012 was impacted by the non-cash impairment charge of $14.7M and a charge of $2.6M for the creation of the provisions for impaired sales tax receivable and income tax receivable. The impairment and provision was prompted by the re-assessment of future cash flows generated by the mine following the review of technical and economical parameters resulting from the mine and plant being on care and maintenance.
Sales amounted to $13.0M during the year which includes $1.1M from copper sales, a by-product at Pasto Bueno. Sales of tungsten in MTU amounted to 37,117 in 2012 compared to 60,602 in 2011. This decrease is due to a decrease in production output (34,836 MTU's in 2012 compared to 55,357 in 2011) which was a result of lower head grades of 0.57% compared to 0.67% in 2011 and the fact that that less ore was extracted because the plant and mine have been on care and maintenance. This caused the 2012 cash cost of production to increase from $167 per MTU in 2011 to $222 per MTU in 2012.
Key Financial Data:
For the twelve-month periods ended December 31, (in $'000) 2012 2011 ------------------------------ ------------------------------ Sales 13,030 20,877 Cost of sales (including depreciation and depletion) 10,694 13,055 Depreciation and depletion 1,735 2,436 Income from mining activities 2,336 7,822 General and administrative expenses 3,523 3,968 Adjusted net income (loss) (19,913) 2,953 EBITDA (169) 6,086 Earnings (loss) per share (basic and fully diluted) ($0.11) $0.03 Cash cost of production per MTU 222 167 Production in MTU 34,836 55,357
On March 19, 2013, the Company announced that it is examining all possible alternatives to obtain financing or conclude a transaction with an investor that could result in a merger or sale of a portion or all of its assets. The mine and plant at Pasto Bueno are still on care and maintenance.
This news release contains certain forward-looking statements or forward looking-information. These forward looking statements are subject to a variety of risks and uncertainties beyond the Corporation's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward looking statements. Such risks and uncertainties are disclosed under the heading "Risk Factors" in the Corporation's Annual Information Form for the year ended December 31, 2012 and dated March 28, 2013. Further, forward-looking information is in addition based on various assumptions, including, without limitation, the expectation and beliefs of management, the assumed long term price of tungsten, that the Pasto Bueno property is a technical viable and economic operation and that the Corporation can access financing. Should one or more of these risks and uncertainties materialize, or should the underlying assumption prove incorrect or different, actual results may vary materially from those described in the forward-looking statements. The information provided reflects management's current expectations regarding future events and performance as of the date of this news release. Accordingly, readers should not place undue reliance on forward-looking statements.
President & CEO
Vice President & CFO