Highlights
- Full year guidance now 60.5 M lbs, only 3% below prior guidance.
- Full production will be restored by the end of July
- MVC currently producing at 50% of capacity using a secondary power source
- Dividend guidance for 2023 remains intact (7.6% yield)
- $4.5 million returned to shareholders in Q2-2023
Amerigo Resources Ltd. (TSX: ARG; OTCQX: ARREF) announced production results for the quarter ended June 30, 2023 (“Q2-2023”) 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 (“USD”) unless indicated otherwise.
In Q2-2023, MVC produced 13.6 million pounds (“M lbs”) of copper, with 65% of production coming from fresh tailings. Copper production to the end of May 2023 was trending 4% over guidance. As a result of the lost production due to the climatic event, cumulative production to June 30, 2023 of 30.15 M lbs was 1.5% below guidance. Amerigo’s 2023 adjusted copper production guidance of 60.5 M lbs, reflecting the impact of the unexpected shutdown and announced to the market on June 30, 2023, remains in place.
Q2-2023 molybdenum production was 0.3 M lbs. YTD molybdenum production of 0.6 M lbs is 10.3% over guidance. Amerigo’s annual molybdenum production guidance remains at 1.0 M lbs.
Amerigo’s cash cost1 in Q2-2023 was $2.37 per pound (“/lb”), higher than in preceding quarters, primarily due to lower production. Before the interruption of operations due to the climatic event, MVC’s YTD cash cost1 was $2.09/lb, below guidance.
Amerigo’s quarterly copper price in Q2-2023 was $3.80/lb, compared to $4.02/lb in Q1-2023, and the Company’s molybdenum price was $20.76/lb, down from $31.73/lb in Q1-2023.
On June 30, 2023, cash was $31.7 million (a decrease of $6.1 million from December 31, 2022), and restricted cash was $4.2 million (unchanged from December 31, 2022). Outstanding bank debt was $21.0 million, compared to $24.5 million on December 31, 2022.
On June 30, 2023, MVC’s water reserves were over 10.0 million cubic meters, compared to 4.7 million cubic meters on March 31, 2023. Water reserves are sufficient to maintain projected Cauquenes processing rates for at least eighteen months, our maximum forecast horizon.
Capital Return Strategy
Amerigo’s quarterly dividend remains secure based on the Company’s adjusted production guidance, released on June 30, 2023. In Q2-2023, Amerigo returned $3.7 million to shareholders through the Company’s seventh consecutive quarterly dividend of Cdn$0.03 per share, and $0.8 million was returned through the purchase of 0.7 million common shares for cancellation through Amerigo’s ongoing Normal Course Issuer Bid.
Since the implementation of Amerigo’s Capital Return Strategy (the “Strategy”) in September 2021, the Company has paid a cumulative dividend of Cdn$0.20 per share ($25.9 million) and used $23.7 million to purchase and cancel 20.1 million of its common shares, an 11.1% reduction in the number of common shares outstanding at the inception of the Strategy.
Release of Q2-2023 financial results on August 2, 2023
Amerigo will release Q2-2023 financial results at the market open on Wednesday, August 2, 2023.
Investor conference call on August 3, 2023
Amerigo’s quarterly investor conference call will occur on Thursday, August 3, 2023, at 11:00 am Pacific Daylight Time/2:00 pm Eastern Daylight Time.
Participants can join by visiting https://emportal.ink/3HHL7xU and entering their name and phone number. The conference system will then call the participants and place them instantly into the call.
Alternatively, participants can dial directly to be entered into the call by an Operator. Dial 1-888-664-6392 (Toll-Free North America) and state they wish to participate in the Amerigo Resources Q2-2023 Earnings Call.
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.
