Amerigo Announces 2016 Fourth Quarter and Annual Production Results
10
January 26, 2017
N.R. 2017-1
Amerigo Announces 2016 Fourth Quarter and Annual Production Results
Vancouver, British Columbia – January 26, 2017 - Amer igo Resources Ltd. ("Amerigo" or the "Company")
(TSX: ARG) announced today production results for the fourth quarter and full year 2016 from Minera Valle
Central ("MVC"), the Company’s operation located near Rancagua, Chile.
Operational Highlights for Q4 and Annual 2016:
MVC produced 56.8 million pounds of copper in 2016 at a cash cost of $1.73 per pound, pursuant to a tolling
agreement with Codelco’s Division El Teniente and a toll processing agreement with Minera Maricunga. This
record copper production was due to good performance from the historic Cauquenes deposit and was within
the Company’s original guidance.
In Q4-2016, MVC produced 13.6 million pounds of copper at a cash cost of $1.87 per pound. The Q4-2016
copper production was affected by a labour strike in October 2016 which resulted in 10 days of lost
production, and 6 days of lost production at the end of December 2016, due to an early annual planned
maintenance shutdown at El Teniente. Lower production negatively affected unit cash cost.
In 2017, MVC expects to produce 60 to 65 million pounds of copper, at an annual cash cost of $1.60 to $1.75
per pound copper. MVC also expects to produce 1.5 million pounds of molybdenum.
Amerigo is advancing financing discussions to complete the construction of the second phase of the
Cauquenes expansion project in the second half of 2018. This $30 million project is planned to increase
production to 87 million pounds of copper per year at an estimated cash cost of $1.40 per pound.
Rob Henderson, Amerigo's President and CEO, stat ed “We are pleased with MVC’s performance in 2016,
which has provided a strong position to move forward with the next phase of expansion at Cauquenes.”
Summary of 2016 Production Results:
2016 Q4-2016 Q3-2016 Q2-2016 Q1-2016
Fresh tailings
Tonnes processed 42,031,933 9, 782,870 11,373,542 10,620,849 10,617,420
Copper grade 0.116% 0.116% 0.113% 0.117% 0.117%
Copper recovery 19.6% 18.4% 19.7% 21.3% 19.2%
Copper produced (millions of pounds) 21.089 4.608 5.571 5.640 5.270
Historic tailings
Tonnes processed 20,639,169 4, 935,260 5,435,474 5,149,732 5,087,765
Copper grade 0.232% 0.239% 0.236% 0.224% 0.228%
Copper recovery 31.1% 31.1% 34.4% 32.2% 26.4%
Copper produced (millions of pounds) 32.746 8.065 9.756 8.191 6.734
Maricunga toll processing
Copper produced (millions of pounds) 2.993 0.918 0.700 0.524 0.851
Total copper produced (millions of pounds) 56.828 13.591 16.027 14.355 12.855
Total copper delivered (millions of pounds) 56.272 13.417 15.599 14.509 12.746
Cash cost ($/pound copper) 1.73 1.87 1.60 1.65 1.81
Release of 2016 Annual Financial Results:
The Company will release 2016 annual financial results at market open on Wednesday February 22, 2017,
followed by an investor conference call on Thursday February 23, 2017 at 11:00 am Pacific Standard
Time/2:00 pm Eastern Standard Time.
Conference Call Participation:
To participate in the call, please dial 1-866-225-0198 (Toll-Free North America) and let the operator know you
wish to participate in the Amerigo Resources conference call. Media are invited to attend on a listen-only
basis. Following management's discussion of the quarterly results, the analyst and investment community will
be invited to ask questions.
About the Company:
Amerigo Resources Ltd. is an innovative copper producer with a long-term partnership with Codelco, the
world’s largest copper producer. Amerigo produces copper concentrate 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; Fax: (604) 682-2802; Web: www.amerigoresources.com; Listing:
ARG:TSX.
For further information, please contact:
Rob Henderson, President and CEO (604) 697-6203
Aurora Davidson, Executive Vice-President and CFO (604) 697-6207
Cautionary Note Regarding Forward-Looking Information:
This news release contains certain forwar d-looking information and statements as def ined in applicable securities laws (collect ively referred to as
"forward-looking statements"). These statements relate to future events or our future performance. All statements other than st atements of historical
fact are forward-looking statements. The use of any of the wo rds "anticipate", "plan", "conti nue", "estimate", "expect", "may", "will", "project", "predict",
"potential", "should", "believe" and simila r expressions is intended to identify forw ard-looking statements. Although the Compa ny believes that these
assumptions were reasonable when made, because these assumptions are inherently subject to signi ficant uncertainties and contin gencies which are
difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure that it will achieve or acco mplish the expectations,
beliefs or projections described in the forward-looking statem ents. These statements involve known and unknown risks, uncertain ties and other factors
that may cause actual results or events to differ materially fr om those anticipated in such forward-looking statements. These s tatements speak only as
of the date of this news release. These forward-looking statements include but are not limited to, statements concerning:
• forecast 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 extension of El Teniente’s useful life and the extent of its remaining ore reserves;
• prices and price volatility for copper and other co mmodities and of materials we use in our operations;
• the demand for and supply of copper and other commodi ties and materials that we produce, sell and use;
• sensitivity of our financial results and s hare price to changes in commodity prices;
• our financial resources;
• interest and other expenses;
• domestic and foreign laws affecting our operations;
• our tax position and the tax rates applicable to us;
• the timing and costs of construction and tolling/production, and the issuance and maintenance of the necessary permits and ot her
authorizations required for, our expansion projects, including the expansion for the C auquenes deposit and the timing of ramp u p to full
production from Cauquenes;
• our ability to procure or have access to financing (includi ng the full funding for Phase one of the Cauquenes project) and 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 c ausing 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
• our planned capital expenditures (includi ng our plan to upgrade our existing plant and operations after phase one of Cauquene s is complete)
and estimates of asset retirement, royalty, severance and other obligations;
• our future capital and production costs, including the costs and potential impact of complying with existing and proposed env ironmental 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 safety initiatives;
• the outcome of legal proceedings and other disputes in which we may be involved;
• the outcome of negotiations concerning meta l sales, treatment charges and royalties;
• our capital expenditures, including the timing and cost of completion of capital projects;
• disruptions to the information technology systems of the Com pany and its subsidiaries (collect ively, the “Group”), including those related to
cyber-security;
• our dividend policy; and
• general business and economic conditions.
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 deve lopment of mineral projects such as unusual or unexpected geological formations,
negotiations with government and other thir d parties, unanticipated metallurgical difficu lties, delays associated with permits, approvals and permit
appeals, ground control problems, adverse we ather conditions, process upsets and equipm ent malfunctions; risks associated with labour disturbances
and availability of skilled labour and management ; fluctuations in the market prices of our principal commodities, which are cy clical and subject to
substantial price fluctuations; risks asso ciated with the availability and pricing of materials used in our operations; risks c reated through competition for
mining projects and properti es; risks associated with lack of access to market s; risks associated with availability of tailings and mine plan estimates;
risks posed by fluctuations in exchange rates and interest rate s, as well as general economic conditions; risks associated with environmental
compliance and changes in environmental legi slation and regulation; risks associated wi th our dependence on third parties for t he provision of critical
services; risks associated with non-performance by contractual c ounterparties; title risks; social and political risks associat ed with operations in foreign
countries; risks of changes in laws affect ing our operations or their interpretati on, including foreign exchange controls; and risks associated with tax
reassessments and legal proceedings. All of these risks and uncer tainties apply not only the Group and its operations, but als o to Codelco and its
operations. Codelco’s ongoing mining operations provide a significant portion of the ma terials the Group processes and its res ulting production and
therefore these risks and uncertainties may also affect their operations and in turn have a material effect on the Group.
Actual results and developments are likely to differ, and may differ materially, from t hose expressed or implied by the forward -looking statements
contained in this news release. Such statements are based on a nu mber of assumptions which may prove to be incorrect, including , but not limited to,
assumptions about:
• general business and economic conditions;
• interest rates;
• levels of and 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 volat ility of prices of copper and other commodities and of the p roducts used in
our operations;
• the ongoing supply of material for processi ng from Codelco’s current mining operations;
• MVC’s ability to profitably extract and process mate rial from the Colihues and Cauquenes tailings deposits;
• the timing of the receipt and ongoing retention of permits and other regulatory and governmental approvals;
• the availability of and ability of the Company to obtain adequate financing for expansions and acquisitions, including the Ca uquenes
expansion;
• our tolling/production costs and our production and productivi ty levels, as well as those of our competitors;
• changes in credit market conditions and conditions in financial markets generally;
• the availability of funding on reasonable terms, includi ng financing for the Group’s expansions and acquisitions;
• our ability to procure equipment and operating supp lies in sufficient quantities and on a timely basis;
• the availability of qualified employ ees and contractors for our operations;
• our ability to attract and retain skilled staff;
• the satisfactory negotiation of colle ctive agreements with unionized employees;
• the impact of changes in foreign exchange rates an d capital repatriation on our costs and results;
• engineering and construction ti metables and capital costs for our expansion projects;
• costs of closure of various operations;
• market competition;
• the accuracy of our mine plan estimates (including, with respect to size, grade and recoverability) and the geological, opera tional and price
assumptions on which these are based;
• tax benefits and tax rates;
• the outcome of our copper concentrate sale s, treatment and refining charge negotiations;
• the resolution of environmental an d other proceedings or disputes;
• the future supply of reasonably priced power;
• our ability to obtain, comply with a nd renew permits in a timely manner;
• our ability to meet production and cost budgets and plans; 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.
We caution you that the foregoing list of important factors and assumptions is not exhaustive. Ot her events or circumstances co uld cause our actual
results to differ materially from those estimated or project ed and expressed in, or implied by, our forward-looking statements. You should also carefully
consider the matters discussed under "Risk Fa ctors" in our Annual Information Form. Ex cept as required by law, we undertake no obligation to update
publicly or otherwise revise any forward-looking statements or t he foregoing list of factors, whether as a result of new inform ation or future events or
otherwise.