Malaga's (MLG.to) poor 2q11 production numbers

Wondering why Malaga (MLG.to) hasn't announced its 2q11 production numbers to the world? Wonder no longer, this is why:

It doesn't have to inform the Canadian market, however it is obliged to tell the Ministry of Energy and Mining in Peru of its monthly production tonnages. As the June numbers were announced yesterday, we now know that the 2q11 at Malaga was nothing short of a disaster. C'mon, hands up who remembers all that about how wonderful life would be once the new machinery were installed and production tonnages raised?

Jay Taylor actually pumps this dog. A case of fool and money parted if ever there was one.

Statistical BS, Malaga (MLG.to) edition

Sadly, Malaga (MLG.to) is a company this author has followed quite closely over the years, as it's never failed to amaze me how much the company can promise, how little it delivers and how long it can string out a timeline and still get heard when it speaks. So when this NR from the company today started in this way...

MONTREAL, QUEBEC--(Marketwire - Jan. 17, 2011) - Malaga Inc. (TSX:MLG - News) is pleased to announce a record production of 71 996 MTU(1) in 2010 at the Pasto Bueno tungsten mine in Peru, an increase of 13.6% compared with 2009. This increase stems from the expansion project that Malaga undertook in 2009 which delivered increased production capacity.

 ...your author let out a little giggle and put together this chart from official Peruvian Mining Ministry data (extrapolating the 4q10 number from today's MLG NR of course), because despite all these wonderful production expansions and improvements MLG goes on about, production levels actually dropped during the course of 2010.

But hey...this is junior mining...let's not allow a few facts to get in the way of a BS pumpjob. Jay Taylor, step forward.

As for the company being profitable now, it's actually possible thanks to the hike in Tungsten spot prices. Yup, next quarter it might even be good for $1m net or so. All you need to do then is divide that number by the 183.55m shares out and you'll get an idea for what the company is worth per share. DYODD.

Unfortunately for people with short attention spans and the tendency to believe anything they read, research and fundies analysis is still necessary in this market

Take for example the case of Malaga Inc (MLG.to), South America's only Tungsten (W) producer. Now, those with an MTV-length attention span might look at the uptick in Tungsten spot prices recently....

....then look at the non-stop NRs from Malaga telling them how they've been upping production (pity this move to 500tpd was promised for late 2008 and took two years to happen, but minor details, right?) and immediately conclude that the stock's a buy. And sure enough, the price chart seems to suggest just that (by the way, that spike to 40c was when Jay Taylor informed his sheep in glowing terms all about MLG last month.....more fool Taylor for not looking deeper and a nasty bit of retail bagholding on display).

But away from the world of shinyhappy people, corporate presentations and mouthbreathing traders the hard data coming from MLG still disappoints. This chart shows monthly production from its Pasto Bueno operation in Peru and, as is abundantly clear, that much-hyped move to 450tpd or 500tpd (I forget which number we're supposed to apply to now and which number is for the future with this company) hasn't done Jack for production so far.

Yup, October was just 49mt of tungsten, the joint worst month of the year and down even on the poor 54mt of September. You see, it really does pay to stop believing half-baked analyses and company blahblah and go around looking for yourself. In other words, DYODD, dude.

Malaga (MLG.to): The difference between liking a mining company and buying its stock

Every so often I mention Malaga Inc (MLG.to) on the blog. The comment is usually along the lines of "I like it, dedicated tungsten miner, cheap stock, investing in new power infrastructure, profits could surprise the market in FY09, better than the avg pennycrapper, DYODD, I've played the stock before" etc etc, but I haven't bought it recently (and said as much, too). Why so? Well firstly because I'm a whuss, but more to the point here is that I've wanted assurance from management that they're true to their word. And in the last few months, it has to be said, they haven't impressed on that score.

The case in point is the new 43-101 compliant resource study for its Pasto Bueno tungsten property. For those that follow the stock and have the memory, there was this snippet from the 3q08 earnings report about the subject:

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Vector Engineering has begun its analysis in order to issue a new report on actual resources of the PastoBueno property based on NI 43-101. This report should be completed by the end of this year.

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The end of the year came and the end of the year went. Not a word from MLG.to. Then suddenly this PR popped up on January 23rd 2009 which said (extracted):

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Malaga firmly intends to publish this new report, which will focus on the tungsten resources and reserves at Pasto Bueno, on its website and on SEDAR before the 20th of February 2009, as required by the Canadian authorities.

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Well guess what? Yup, February 20th just came and passed. Not a word from MLG.to about this ghost-like 43-101 compliant report.

The bottom line: The mine may pass muster on the numbers and the plans sound great and the investment in the new hydroelectricity plant looks good on paper to cut costs significantly. As for the metal, tungsten isn't at its highs right now but on the other hand it hasn't slumped like so many other metals......

......and I can certainly live with using U$30/kg on my MLG.to production model during 2009 if it holds there. All that is peachy-keen, but why should I buy the stock when management cannot keep its own word? There are thousands of good stories and stocks out there to choose from, so why bother with this one if on the "gotta trust the managers" score, MLG.to has come up short again.

There's more to investment in junior miners than an XLS spreadsheet. DYODD, dude.