Amerigo Resources Guides to Fifth Year of Production Growth, Debt Free by Year End

Amerigo Reports 2024 Operational Results & Provides 2025 Guidance

  • 2024 Copper Production of 64.6 million pounds, Outperforming Guidance
  • 2024 Cash Cost1 $1.89 per pound, Outperforming Guidance
  • 2025 Guidance Sees Amerigo Debt-Free by Year-end

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Amerigo Resources Ltd. (TSX: ARG) (OTCQX: ARREF) announced 2024 production results 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.

We are pleased to report very strong 2024 production and cash cost results at our MVC operation, significantly beating both production and cost guidance. Copper production was 64.6 million pounds, with a Company record of 65.0 million pounds of copper deliveries. Molybdenum production and sales were 1.3 million pounds, also significantly exceeding guidance. The operational team at MVC achieved a cash cost of $1.89 per pound and a normalized cash cost of $1.87 per pound, and there were no environmental incidents or lost time accidents in 2024. In addition to MVC’s operational excellence, MVC’s safety record is also world-class, with its employees having recorded no lost time accidents in over 2 years.

 

For the fifth year in a row, we are also providing increased annual copper production guidance. This year, we expect our solid, consistent operations to continue, and, as always, we will continue to optimize our operations with fiscal responsibility. Our return of capital strategy is fully deployed with the opportunity to use quarterly dividends, performance dividends, and share buybacks to return surplus cash to shareholders. In 2025, we also plan to repay MVC’s minimal outstanding debt fully, finishing 2025 debt-free.Aurora Davidson, President & CEO, Amerigo Resources Inc.

In 2024, MVC produced 64.6 million pounds (“M lbs”) of copper (2023: 57.6 M lbs), 4% over the Company’s annual production guidance of 62.4 M lbs.

Amerigo produced 1.3 M lbs of molybdenum in 2024 (2023: 1.2 M lbs), 8% over the Company’s guidance of 1.2 M lbs.

Amerigo’s annual copper price in 2024 was $4.15 per pound (“/lb”) (2023: $3.86/lb).

The Company’s 2024 cash cost was $1.89/lb (2023: $2.17/lb), and 2024 normalized cash cost was $1.87/lb, compared to guidance of $2.08/lb.

In Q4-2024, MVC produced 18.3 M lbs of copper at a cash cost of $1.73/lb. Amerigo’s quarterly copper price was $4.06/lb in Q4-2024, compared to $4.22/lb in Q3-2024.

In 2024, the Company incurred $8.7 million in capital expenditures on projects (“Capex”) (2023: $14.3 million) and $3.5 million on sustaining Capex associated with the annual plant maintenance shutdown and strategic spares (2023: $3.7 million).

The Company repaid $9.8 million in debt (2023: $7.1 million in debt and lease repayments) and returned $21.2 million to shareholders through dividends and share buybacks (2023: $17.3 million).

On December 31, 2024, Amerigo’s cash position was $35.9 million ($10.8 million higher than September 30, 2024), and restricted cash was $4.4 million ($2.3 million lower than September 30, 2024). Outstanding bank debt was $11.5 million (a decrease of $4.0 million from September 30, 2024).

Quarterly Operational Table

2025 Guidance

In 2025, Amerigo expects to produce 62.9 M lbs of copper and 1.3 M lbs of molybdenum, marking the fifth year of increased production guidance.

The annual plant maintenance shutdown at MVC is scheduled for Q1-2025. The maintenance shutdown’s lower production expected in Q1-2025 is factored into the annual production guidance.

In 2024, the London Metal Exchange average copper price was $4.15/lb, the average Platts molybdenum dealer oxide price was $20.89/lb, and the average exchange rate of the Chilean peso to the U.S. dollar was $944. While market consensus continues to support rising copper prices due to concentrate supply deficits in 2025, Amerigo has again taken a conservative approach to selecting economic assumptions for its annual budget, including an average market price of $4.15/lb for copper, $21/lb for molybdenum and an exchange rate of 940 Chilean pesos (“CLP”) to USD (collectively, the “Assumptions”).

Under the Assumptions, Amerigo’s 2025 normalized cash cost is expected to be $1.93/lb. Compared to 2024, Amerigo’s cash cost1 is projected to benefit from approximately $0.16/lb in lower treatment and refinery charges. However, other cash cost components are expected to increase as a result of lower 2025 guided production compared to actual 2024 production ($0.05/lb), higher expected energy pass-through charges to Chilean industrial consumers ($0.04/lb), lower price positive settlement adjustments to molybdenum credits ($0.03/lb),  higher steel, reagent and input costs ($0.02/lb), inflationary adjustments to service contracts ($0.02/lb), higher projected environmental compliance costs ($0.02/lb) and higher projected historical tailings extraction costs ($0.02/lb).

Our normalized cash cost guidance excludes the signing bonus of a 3-year collective labour agreement with MVC’s operators’ union, which will be negotiated and paid in Q4-2025.

Using a $4.15/lb copper price, the royalty to Codelco’s El Teniente Division (“DET”) in 2025 would be $1.24/lb. The DET royalty is calculated on a sliding scale based on copper prices. A $0.20/lb increase in copper price would have a $0.09/lb impact on the DET royalty.

A $2/lb change in molybdenum price would impact cash cost by $0.03/lb, and a 10% change in the CLP to USD foreign exchange rate would impact cash cost by $0.09/lb.

Projected 2025 EBITDA under the Assumptions is expected to be $66.7 million (excluding the effect of 2024 settlement adjustments). Each $0.10/lb increase in copper price up to $4.80/lb would increase EBITDA by approximately $3.0 million.

In 2025, MVC is expected to incur $8.8 million in capital expenditures on projects (“Capex”) and $4.2 million on capitalizable maintenance and strategic spares. Four process optimization projects worth $4.4 million are included in Capex.

Concerning financial obligations, MVC will repay the $1.0 million due on its working capital line of credit by October 2025 and will make two scheduled semi-annual bank debt repayments of $3.5 million plus interest in June and December 2025. Based on the guidance above, MVC plans to pre-pay the remaining $3.5 million due on its bank debt in December 2025 and end the year debt-free. This will be a significant milestone for MVC and Amerigo, adding at least $7.5 million annually in cash available to shareholders starting in 2026.

Capital Return Strategy

Since implementing its Capital Return Strategy (the “Strategy”) in September 2021, Amerigo has returned a total of $78.1 million to shareholders, $52.6 million through quarterly and performance dividends and $25.5 million through share buybacks, reducing by 11.9% the number of common shares outstanding at the inception of the Strategy.

Amerigo’s Strategy consists of three mechanisms: quarterly dividends, performance dividends, and share buybacks. These mechanisms ideally provide shareholders with a consistent return on invested capital and quickly transfer the benefits of rising copper prices to Amerigo’s shareholders.

Release of 2024 financial results on February 26, 2025

Amerigo will release 2024 financial results at the market open on Wednesday, February 26, 2025.

Investor conference call on February 27, 2025

Amerigo’s quarterly investor conference call will be held on Thursday, February 27, 2025, at 11:00 a.m. Pacific Standard Time/2:00 p.m. Eastern Standard Time.

Participants can join by visiting https://emportal.ink/3NOSCpK 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 1-888-510-2154 (Toll-Free North America) and state they wish to participate in the Amerigo Resources 2024 Earnings Call.

Interactive Analyst Center

Amerigo’s published financial and operational information is available for Excel download through Virtua’s Interactive Analyst Center (“IAC”). You can access the IAC by visiting www.amerigoresources.com under Investors > Interactive Analyst Center.

Duane Hope is a Partner at Capital 10X, he brings over 15 years of communications and research experience to the firm. His research and writing have appeared in publications for North American, European and Asian audiences.

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