Amerigo Reports Q2-2023 Production Results and Provides MVC Operational Update


  • 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.

MVC’s copper production in the second quarter was 13.6 million pounds. As expected, the quarter was impacted by our 8-day annual plant maintenance shutdown but unexpectedly impacted by a full shutdown on June 23, 2023, through the end of the quarter. The extraordinary flooding that severed MVC’s connection to Chile’s central power grid, causing the shutdown, resulted in 1.3 million pounds of lost copper production in June. Aurora Davidson, CEO, Amerigo Resources
Using additional sources of secured power, on July 6, 2023, MVC began processing fresh tailings from El Teniente and producing 90,000 pounds of copper daily. Repair work to the infrastructure necessary for reconnection to Chile’s central power grid is underway, including a revised work program with additional upgrades and repairs to increase safety levels from a similar climatic event. We currently expect fully restored operations at MVC during the last week of July.Aurora Davidson, CEO, Amerigo Resources

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 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.


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