Amerigo Raises Production Guidance, Forecasts Large Quarterly Production Increase in Q4

Earnings Highlights

Production expected to grow 50% quarter over quarter and exceed 16.6 million pounds in Q4.
Amerigo now expects to exceed revised production guidance provided in September after record flooding.
Management is comfortable that Amerigo’s 9.3% dividend yield is secure at current production levels and forecast copper prices.
Full Q3 Earnings Will be released on November 1st

Amerigo Resources Ltd. (TSX: ARG; OTCQX: ARREF) announces production results for the quarter ended September 30, 2023 (“Q3-2023”) 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 third quarter of 2023 was 11.1 million pounds, aligned with our revised guidance published on September 11, 2023. This revised guidance reflected the impact of severe rain in central Chile, which affected the production of historic tailings in two separate events.

MVC’s operations were back to normal before the end of September, and we now expect Q4-2023 copper production to exceed the 16.6 million pounds produced during Q4-2022.Aurora Davidson, President & CEO, Amerigo Resources

On the Ground Operational Update Video (September 27th)

Operational Summary

In Q3-2023, MVC produced 11.1 million pounds (“M lbs”) of copper, with 74% of production coming from fresh tailings.

Amerigo’s total 2023 copper production is expected to exceed the revised annual guidance of 57.8 M lbs announced to the market on September 11, 2023.

At a Q4 production rate above 16.6 million pounds, Amerigo should generate close to 58 M lbs of production for 2023 as a whole, slightly less than 1% above guidance given in September after record flooding in Chile.

This revised annual guidance incorporated the severe rains’ impact on MVC’s Q2-2023 and Q3-2023 copper production.

Amerigo’s surprisingly rapid production recovery after historic flooding shows the quality of the Amerigo management and operational team. Amerigo clearly has a risk mitigation mindset which gives us renewed confidence that the management team will continue to maintain production, supporting industry leading capital returns to shareholders.

Q3-2023 molybdenum production was 0.2 M lbs. YTD molybdenum production of 0.8 M lbs is 3% over guidance. Amerigo’s annual molybdenum production guidance has been revised upwards from 1.0 M lbs to 1.1 M lbs.

Amerigo’s cash cost1 in Q3-2023 was $2.44 per pound (“/lb”), primarily due to temporarily reduced production levels.

Amerigo’s quarterly copper price was essentially flat with Q2-2023 coming in at $3.76/lb, compared to $3.80/lb in Q2-2023, and the Company’s molybdenum price was $23.31/lb, up from $20.76/lb in Q2-2023.

On September 30, 2023, Amerigo’s cash position was $13.1 million (a decrease of $24.7 million from December 31, 2022), and restricted cash was $6.3 million (an increase of $2.1 million from December 31, 2022).

Outstanding bank debt was $21.0 million, compared to $24.5 million on December 31, 2022.

On September 30, 2023, MVC’s water reserves were over 10.0 million cubic meters, sufficient to maintain projected Cauquenes processing rates for at least eighteen months, the maximum forecast horizon.

Q3 2023 Production Summary Table

9.6% Dividend Yield Well Supported

Amerigo’s quarterly dividend remains secure based on the Company’s revised 2023 production guidance, released on September 11, 2023, and the Company’s copper price outlook. In Q3-2023, Amerigo returned $3.7 million to shareholders through the Company’s eighth consecutive quarterly dividend of Cdn$0.03 per share.

Since the implementation of Amerigo’s Capital Return Strategy (the “Strategy”) in September 2021, the Company has paid a cumulative dividend of Cdn$0.23 per share ($29.6 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.

Earnings & Conference Call Details

Amerigo will release Q3-2023 financial results at the market open on Wednesday, November 1, 2023.

Amerigo’s quarterly investor conference call will occur on Thursday, November 2, 2023, at 11:00 a.m. Pacific Daylight Time/2:00 pm Eastern Daylight Time.

Participants can join by visiting https://emportal.ink/3s49iS8 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.

Amerigo Resources is a market awareness client of Capital 10X. For more information, including potential conflicts of interest please see our Content Disclaimer.

Duane Hope

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 has appeared in publications for North American, European and Asian audiences.