Status of 2012 Objectives:
1. Completed the new tailings pond in Q2-2012. The Company expects That the tailings pond will have a 5 to 6-year life at 500 tpd.
2. Increase mine capacity to 400 tpd by year end and produce 60,000 to 65,000 MTU's.
3. Financed by an advance on sales from Malaga's current Customer, construction has begin in Q2-2012 with first delivery expected in Q3-2012. Assuming a 50% recovery rate, Malaga would produce an additional 31,500 metric tonne units (MTU's) over the next few years from the current Tailings pond, which is the equivalent value of $9M USD in revenues at current market prices.
4. The Company applied for a medium-producer Permit which would allow it to produce 500 tpd up to a maximum capacity of 750 tpd. Management expects to get approval during Q4-2012
5. Make a decision on the construction of a 20 megawatt (MW) hydro-power plant by Q4-2012 This project is still on track. Hidropesac continues to update the environmental assessment and archeological Artifacts study. Hidropesac expects to obtain final approval early in the fourth quarter of 2012, which Would allow building to begin the following quarter. Construction will commence once the commercial Agreements and financing is secured and time to build out the project is expected to take 18 to 24 months, Followed by a six-month commissioning period.
6. Malaga Continues to be the lowest cash cost producer of all publicly traded tungsten companies. Average cash cost of production (3) was $197 per MTU in Q1-2012. With production level going back to normal in Q2-2012, Malaga expects the cash cost to be back to about $170/MTU. The Company will continue to focus on Reducing its cash cost of production per MTU in order to remain competitive in the market.
7. Continues to delineate inferred resources in the mantos structure. The first exploration campaign should be completed during Q2-2012. Once the results of this first campaign are Known, the Company will fully analyse the results and will determine the scope of The second campaign.
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