(NewsDirect)
Q2-2022 copper
production of 14.9 million pounds, meeting company expectations
2022
copper production trending 3% over guidance, production costs aligned
with guidance
Amerigo reaffirms return of shareholder capital
policy
Amerigo Resources Ltd. (TSX: ARG; OTC: ARREF)
(“Amerigo” or the “Company”) is pleased to announce
production results for the quarter ended June 30, 2022 (“Q2-2022”)
from Minera Valle Central (“MVC”), the Company’s 100% owned
operation located near Rancagua, Chile.
Dollar amounts in this news
release are in U.S. dollars unless indicated otherwise
.
“We are pleased to
report another strong operational quarter which included our 9-day
annual maintenance program shutdown. Amerigo’s operations met
expectations before and after the scheduled shutdown and produced 14.9
million pounds of copper. As always, our maintenance shutdown quarter
will be our lowest production quarter of the year”, said Aurora
Davidson, Amerigo’s President and CEO. “For the full year, we
expect to exceed copper production guidance by 3%, annual production
costs to remain aligned with guidance, and we reaffirm the Company’s
commitment to returning capital to shareholders.”
“Price volatility is a
normal feature of the copper market,” said Ms. Davidson. “However,
over the past several years we have transformed Amerigo into a company
that is ready for the long-term, regardless of copper price
volatility.” She added, “We continue to see strong market
fundamentals supporting copper prices and have a robust balance sheet
designed to weather market volatility while protecting the regular
quarterly dividend of Cdn$0.03 per share. We are monitoring market
conditions to determine the optimum time to trigger additional
performance dividends as part of our return of capital to
shareholders.”
In Q2-2022, MVC produced 14.9 million pounds (“M lbs”) of
copper at a cash cost
1
of $2.01 per pound (“/lb”) with
61% of MVC’s copper production coming from fresh tailings. By
successfully prioritizing the processing of fresh tailings, water is
preserved and mineral resource depletion at Cauquenes is delayed, all
without lowering copper production. For the first half of 2022, copper
production totaled 31.4 M lbs of copper at a cash cost of
$1.95/lb.
Lower
copper production in Q2-2022, because of the scheduled annual
maintenance shutdown, resulted in a higher-than-normal quarterly cash
cost of $2.01/lb. Based on the Company’s modeling, annual cash cost
is trending towards $1.96/lb, approximately 3% higher than guidance.
This cash cost variance is attributable to lower molybdenum byproduct
credits from lower than anticipated molybdenum production. All other
production costs remain aligned with Amerigo’s
budget/guidance.
MVC’s water reserves on June 30, 2022, were 5.2 million cubic
meters, an increase of 16% over the previous quarter. These water
reserves continue to be sufficient for MVC to maintain projected
processing for a period of at least eighteen months.
MVC’s operations have
continued without any significant disruptions due to Covid-19.
Molybdenum production in
the quarter was 0.2 M lbs, trending below guidance mostly due to lower
molybdenum content in fresh tailings.
The Company’s quarterly copper price in Q2-2022
was $4.10/lb, compared to $4.64/lb in Q1-2022.
In Q2-2022, Amerigo
returned $13.0 million to shareholders: $4.1 million were paid through
Amerigo’s regular quarterly dividend of Cdn$0.03 per share, and $8.9
million were returned through the purchase of 6.9 million common
shares for cancellation through Amerigo’s recently completed Normal
Course Issuer Bid. Amerigo also made scheduled debt repayments of $3.5
million in the quarter.
On June 30, 2022, the Company’s cash and restricted cash
balance was $57.2 million.
Q2-2022 |
Q1-2022 |
Q4-2021 |
Q3-2021 |
Q2-2021 |
|
Fresh tailings |
|||||
|
Tonnes |
146,675 |
139,238 |
147,047 |
137,650 |
129,153 |
|
Operating days |
81 |
90 |
91 |
84 |
89 |
|
Tonnes |
11,917,602 |
12,525,446 |
13,381,267 |
11,562,611 |
11,533,405 |
|
Copper |
0.162% |
0.157% |
0.149% |
0.152% |
0.144% |
|
Copper |
21.4% |
22.2% |
20.9% |
22.3% |
20.2% |
|
Copper produced (M lbs) |
9.13 |
9.61 |
9.26 |
8.62 |
7.37 |
Cauquenes tailings |
|||||
|
Tonnes per day |
37,783 |
40,628 |
46,869 |
52,981 |
54,026 |
|
Operating days |
82 |
90 |
91 |
81 |
87 |
|
Tonnes |
3,120,184 |
3,615,801 |
4,293,218 |
4,267,203 |
4,701,475 |
|
Copper grade |
0.255% |
0.252% |
0.242% |
0.238% |
0.230% |
|
Copper recovery |
33.2% |
33.8% |
33.6% |
33.0% |
31.9% |
| Copper produced (M lbs) |
5.79 |
6.86 |
7.64 |
7.37 |
7.61 |
Copper produced (M lbs) |
14.92 |
16.47 |
16.90 |
15.99 |
14.99 |
Copper delivered (M lbs) |
14.86 |
16.29 |
16.72 |
16.90 |
15.13 |
|
|
2.01 |
1.90 |
1.68 |
1.61 |
1.81 |
Molybdenum produced (M lbs) |
0.18 |
0.24 |
0.30 |
0.32 |
0.33 |
Molybdenum sold (M lbs) |
0.18 |
0.22 |
0.30 |
0.34 |
0.33 |
Release of Q2-2022 results on August 3,
2022
Amerigo
will release Q2-2022 financial results at market open on Wednesday,
August 3, 2022.
Investor conference call on August 4, 2022
Amerigo’s quarterly
investor conference call will take place on Thursday, August 4, 2022
at 11:00 am Pacific Time/2:00 pm Eastern Time. To join the call,
please dial 1-888-664-6392 (Toll-Free North America) and enter
confirmation number 81494727
.
Upcoming Investor Conference
Participation
Amerigo will be participating in the
Sidoti Small Cap
Virtual Conference
on September 21 and 22, 2022 and the
121 Global Online Tech Metals
conference on October 25
and 26, 2022. CEO Aurora Davidson will be presenting at both
conferences and will be available for one-on-one meetings throughout
each event.
About Amerigo and MVC
Amerigo Resources Ltd. is an innovative copper
producer with a long-term relationship with Corporación Nacional del
Cobre de Chile (“Codelco”), the world’s largest copper producer.
Amerigo produces
copper concentrate and molybdenum concentrate as a by-product at the
MVC operation in Chile by processing fresh and historic tailings from
Codelco’s El Teniente mine, the world’s largest underground
copper mine. Tel: (604) 681-2802; Web:
www.amerigoresources.com
;
Listing: ARG:TSX.
1
Non-IFRS Measures
This news release
includes references to cash cost, a performance measure not defined
under International Financial Reporting Standards (“IFRS”). Cash
cost is a performance measure commonly used in the mining industry. In
Amerigo’s case, cash cost is the aggregate of smelting and refining
charges, tolling/production costs net of inventory adjustments and
administration costs, net of by-product credits. Cash cost per pound
produced is based on pounds of copper produced and is calculated by
dividing cash cost over the number of pounds of copper produced.
Cash cost is
included in this news release because it is a key performance measure
used by management to monitor operating performance, assess corporate
performance, and to plan and assess the overall effectiveness and
efficiency of Amerigo’s operations. Performance measures such as
cash cost are not standardized financial measures under IFRS and,
therefore, amounts presented may not be comparable to similar
financial measures disclosed by other companies. These performance
measures should not be considered in isolation as a substitute for
measures of performance in accordance with IFRS and should be read in
conjunction with the Company’s consolidated financial statements.
Readers should refer to Amerigo’s Management’s Discussion and
Analysis, available on SEDAR at
www.sedar.com
, under the heading
“Non-IFRS Measures” for a more detailed discussion of how Amerigo
calculates cash cost and a reconciliation of cash cost against IFRS
measures.
Cautionary
Note Regarding Forward-Looking Information
This news release
contains certain forward-looking information and statements as defined
in applicable securities laws (collectively referred to as
“forward-looking statements”). These statements relate to
future events or the Company’s future performance. All statements
other than statements of historical fact are forward-looking
statements. The use of any of the words “anticipate”,
“plan”, “continue”, “estimate”,
“expect”, “may”, “will”, “project”,
“predict”, “potential”, “should”,
“believe” and similar expressions is intended to identify
forward-looking statements. These forward-looking statements include
but are not limited to, statements concerning:
- forecasted production and operating costs;
- our
strategies and objectives; - our estimates of the
availability and quantity of tailings, and the quality of our mine
plan estimates; - the sufficiency of MVC’s water
reserves to maintain projected Cauquenes tonnage processing for a
period of at least 18 months; - prices and price volatility
for copper, molybdenum and other commodities and of materials we use
in our operations; - the demand for and supply of copper,
molybdenum and other commodities and materials that we produce, sell
and use; - sensitivity of our financial results and share price
to changes in commodity prices; - our financial resources and
financial condition and our expected ability to meet our obligations
for the next 12 months; - interest and other
expenses; - domestic and foreign laws affecting
ouroperations; - our tax position and the tax rates applicable
to us; - our ability to comply with our loan
covenants; - the production capacity of our operations, our
planned production levels and future production; - potential
impact of production and transportation
disruptions; - hazards inherent in the mining industry
causing personal injury or loss of life, severe damage to or
destruction of property and equipment, pollution or environmental
damage, claims by third parties and suspension of
operations - estimates of asset retirement obligations
and other costs related to environmental
protection; - our future capitaland production
costs,including the costs and potential impact of complying with
existing and proposed environmental laws and regulations in the
operation and closure of our operations; - repudiation,
nullification, modification or renegotiation of contracts; - our
financial and operating objectives; - our environmental, health
and safetyinitiatives; - the outcome of legal proceedings and
other disputes in which we may be involved; - the outcome of
negotiations concerning metal sales, treatment charges and
royalties; - disruptions to the Company’s information
technology systems, including those related to
cybersecurity; - our dividend policy; and
- general
business and economic conditions, including, but not limited to, our
assessment of strong market fundamentals supporting copper
prices..
These forward-looking statements involve
known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those
anticipated in such statements. Inherent in forward-looking statements
are risks and uncertainties beyond our ability to predict or control,
including risks that may affect our operating or capital plans; risks
generally encountered in the permitting and development of mineral
projects such as unusual or unexpected geological formations,
negotiations with government and other third parties, unanticipated
metallurgical difficulties, delays associated with permits, approvals
and permit appeals,ground control problems,adverse weather conditions,
process upsets and equipment malfunctions; risks associated with
labour disturbances and availability of skilled labour and management;
risks related to the potential impact of global or national health
concerns, including COVID-19, and the inability of employees to access
sufficient healthcare; government or regulatory actions or inactions;
fluctuations in the market prices of our principal commodities,
whichare cyclical and subject to substantial price fluctuations;
riskscreated through competition for mining projectsand properties;
risks associated with lack of access to markets; risks associated with
availability of and our ability to obtain both tailings from
Codelco’s Division El Teniente’s current production and historic
tailings from tailings deposit; the availability of and ability of the
Company to obtain adequate funding on reasonable terms for expansions
and acquisitions; mine plan estimates; risks posed by fluctuations in
exchange rates and interest rates, as well as general economic
conditions; risks associated with environmental compliance and changes
in environmental legislation and regulation; risks associated with our
dependence on third parties for the provision of critical services;
risks associated with non-performance by contractual counterparties;
risks associated with supply chain disruptions; title risks; social
and political risks associated with operations in foreign countries;
risks of changesin laws affecting our operations or their
interpretation, including foreign exchange controls; and risks
associated with tax reassessments and legal proceedings.
Notwithstanding the efforts of the Company and MVC, there can be no
guarantee that the Company’s or MVC’s staff will not contract
COVID-19 or that the Company’s and MVC’s measures to protect staff
from COVID-19 will be effective. Many of these risks and uncertainties
apply not only to the Company and its operations, but also to Codelco
and its operations. Codelco’s ongoing mining operations provide a
significant portion of the materials the Company processes and its
resulting metals production, therefore these risks and uncertainties
may also affect their operations and in turn have a material effect on
the Company.
Actual results and developments are likely to
differ, and may differmaterially, from those expressed or implied by
the forward-looking statements contained in this news release. Such
statements are based on several assumptions which may prove to be
incorrect, including, but not limited to, assumptions about:
- general business and economic conditions;
- interest and currency exchange
rates; - changes in commodity and
power prices; - acts of foreign
governments and the outcome of legal proceedings; - the supply and demand for, deliveries of,
and the level and volatility of prices of copper, molybdenum and other
commodities and products used in our operations; - the ongoing supply of material for
processing from Codelco’s current mining operations; - the grade and projected recoveries of
tailings processed by MVC; - the
ability of the Company to profitably extract and process material from
the Cauquenes tailings deposit; - the
timing of the receipt of and retention of permits and other regulatory
and governmental approvals; - our
costs of production and our production and productivity levels, as
well as those of our competitors; - changes in credit market conditions and conditions in financial
markets generally; - our ability to
procure equipment and operating supplies in sufficient quantities and
on a timely basis; - the availability
of qualified employees and contractors for our operations; - our ability to attract and retain skilled
staff; - the satisfactory negotiation
of collective agreements with unionized employees; - the impact of changes in foreign exchange
rates and capital repatriation on our costs and results; - engineering and construction timetables and
capital costs for our expansion projects; - costs of closure of various operations;
- market competition;
- tax benefits and tax rates;
- the outcome of our copper concentrate sales
and treatment and refining charge negotiations; - the resolution of environmental and other
proceedings or disputes; - the future
supply of reasonably priced power; - rainfall in the vicinity of MVC continuing to trend towards
normal levels; - average recoveries
for fresh tailings and Cauquenes tailings; - our ability to obtain, comply with and renew permits and
licenses in a timely manner; and - our
ongoing relations with our employees and entities with which we do
business.
Future production levels and cost estimates assume there are no
adverse mining or other events which significantly affect budgeted
production levels.
Although the Company believes that these assumptions were
reasonable when made, because these assumptions are inherently subject
to significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond the Company’s control, the
Company cannot assure that it will achieve or accomplish the
expectations, beliefs or projections described in the forward-looking
statements.
We caution you that the
foregoing list of important factors and assumptions is not exhaustive.
Other events or circumstances could cause our actual results to differ
materially from those estimated or projected and expressed in, or
implied by, our forward-looking statements. You should also carefully
consider the matters discussed under
Risk Factors
in the
Company`s Annual Information Form. The forward-looking statements
contained herein speak only as of the date of this news release and
except as required by law, we undertake no obligation to update
publiclyor otherwise revise any forward-looking statements or the
foregoing list of factors, whether as a result of new information or
future events or otherwise.
Contact
Details
Aurora Davidson, President and CEO
+1
604-697-6207
Graham
Farrell
+1 416-842-9003
Company
Website
http://www.amerigoresources.com/
Copyright (c) 2022 TheNewswire – All rights reserved.
