With a temporary hydroelectric concession permit in hand allowing them to study the feasibility of building a hydroelectric plant using the hydrological resources of the Pelagatos and Plata rivers, Hidropesac studied and analyzed several options ranging from the installation of 19 MW to 28 MW hydro power plants.
The current studies show that all the options combining the hydrological resources from the two rivers are both technically feasible and financially profitable. According to a preliminary report, the installation of a 28 MW hydro power plant is the best option with a power generation potential of between 113 to 141 GWh per year and the highest internal rate of return. This major project would give Malaga complete autonomy in terms of power generation, would sustain its planned production growth, decrease its production costs permanently and eventually generate important value.
The complete feasibility study detailing the economic parameters and financial requirements should be finalized in the Fall of 2010.
Hidropesac will then carry out the environmental and archeological studies required by the Peruvian authorities, in order to obtain the permanent hydroelectrical concession. Agreements with regional governmental bodies and local communities will be concluded with the objective to start construction in 2011.
ABOUT MALAGA INC. AND HIDROPESAC
Malaga Inc. owns the only operating tungsten mine in the Americas. Current tungsten concentrate production is approximately 7,500 MTUs per month and is expected to increase to above 9,500 MTUs, in the near future. Malaga also seeks diverse growth opportunities such as developing the hydroelectric potential of its Pasto Bueno property, through Hidropesac a joint venture with EPD (Emerging Power Developers - a subsidiary of Stucky S.A a worldwide Swiss company specialized in hydroelectric projects). Malaga holds 49% of Hidropesac.
Hidropesac has invested more than US$ 3 million at Pasto Bueno and has successfully built and commissioned (in 2009) a 600 kW hydroelectric plant. This plant includes two hydroelectric generators - one 150 kW vertical unit and one 450 kW horizontal unit both coupled to Pelton turbines as well as state of the art operational electronic controls. A 22.9 kV/400 V transformer and a 15 km power transport line have also been built and installed at Pasto Bueno that connects to the Peruvian National Grid.
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