Amerigo Announces 2017 First Quarter Production Results
April 20, 2017
N.R. 2017-5
Amerigo Announces 2017 First Quarter Production Results
Vancouver, British Columbia – April 20, 2017 - Amerigo Re sources Ltd. ("Amerigo" or the "Company") (TSX:
ARG) announced today production results for the first quar ter of 2017 from Minera Valle Central ("MVC"), the
Company’s operation located near Rancagua, Chile.
Operational Highlights for Q1-2017:
In Q1-2017, MVC produced 15.1 million pounds of copper at a cash cost of $1.71 per pound, pursuant to a
tolling agreement with Codelco’s Division El Teniente and a toll processing agreement with Minera Maricunga.
Plant recoveries returned to normal following completion of repairs to the concentrate regrind mill in February
2017. Copper production from the historic Cauquenes deposit has increased steadily since the Phase One
Expansion project was completed in 2015. The Phase Two Expansion project is planned to improve flotation
recovery efficiency and expand the existing facilities to an output of 85 to 90 million pounds of copper per
year. Detailed engineering work is proceeding at MVC and Amerigo is finalizing plans for debt financing in
order to complete the construction of the $30 million project in the second half of 2018.
Amerigo’s production guidance for 2017 is maintained at 60 to 65 million pounds of copper at an annual cash
cost of $1.60 to $1.75 per pound. MVC also expects to produce 1.5 million pounds of molybdenum.
Summary of Production Results for the Most Recent Five Quarters:
Q1-2017 Q4-2016 Q3-2016 Q2-2016 Q1-2016
Fresh tailings
Tonnes processed 10,566,171 9, 782,870 11,373,542 10,620,849 10,617,420
Copper grade 0.120% 0.116% 0.113% 0.117% 0.117%
Copper recovery 16.6% 18.4% 19.7% 21.3% 19.2%
Copper produced (millions of pounds) 4.651 4.608 5.571 5.640 5.270
Historic tailings
Tonnes processed 5,813,239 4, 935,260 5,435,474 5,149,732 5,087,765
Copper grade 0.254% 0.239% 0.236% 0.224% 0.228%
Copper recovery 29.4% 31.1% 34.4% 32.2% 26.4%
Copper produced (millions of pounds) 9.594 8.065 9.756 8.191 6.734
Maricunga toll processing
Copper produced (millions of pounds) 0.896 0.918 0.700 0.524 0.851
Total copper produced (millions of pounds) 15.141 13.591 16.027 14.355 12.855
Total copper delivered (millions of pounds) 15.175 13.417 15.599 14.509 12.746
Cash cost ($/pound copper) 1.71 1.87 1.60 1.65 1.81
Release of Financial Results for Q1-2017:
The Company will release Q1-2017 financial results at market open on Wednesday May 3, 2017, followed by
an investor conference call on Thursday May 4, 2017 at 11:00 am Pacific Daylight Time/2:00 pm Eastern
Daylight 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 relationship 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 forward-looking information and statements as defi ned in applicable securities laws (collectively referred to
as "forward-looking statements"). These statements relate to fu ture events or the Company’s future performance. All statements other than
statements of historical fact are forward-looking statements. Th e use of any of the words "anticipate", "plan", "continue", "es timate", "expect",
"may", "will", "project", "predict", "potential", "should", " believe" and similar expressions is intended to identify forward-l ooking statements.
Although the Company believes that these assumptions were reas onable when made, because these assu mptions are inherently subjec t to
significant uncertainties and cont ingencies which are difficult or impossible to predict and are beyond the Company’s control, the Company
cannot assure that it will achieve or accomplish the expectati ons, beliefs or projections described in the forward-looking stat ements. These
forward-looking statements involve known and unknown risks, uncerta inties and other factors that may cause actual results or ev ents to differ
materially from those anticipated in such statements. These forward-looking statements include but are not limited to, statements concerning:
• a forecasted increase in production and a reduction in operating costs;
• our strategies and objectives;
• our estimates of the availability and quantity of tailings, and the quality of our mine plan estimates;
• 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 and our expected ability to meet our obligations for the next 12 months;
• 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 of, and the issuance and maintenance of the necessary permits and other
authorizations required for, our expansi on projects, including the expansion for t he Cauquenes deposit and the timing of ramp-u p to
full production from Cauquenes;
• our ability to procure or have access to fi nancing 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, se vere damage to or destruction of property and
equipment, pollution or environmental damage, claims by third parties and suspension of operations
• our planned capital expenditures (incl uding our plan to upgrade our existing pl ant and operations) including the timing and c ost of
completion of our capital projects;
• estimates of asset retirement obligations and other costs related to environmental protection;
• our future capital and production costs, including the costs and potential impact of complying with existing and proposed
environmental 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;
• disruptions to the Company's information technology systems, including those related to cybersecurity;
• 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 th at may affect our
operating or capital plans; risks generally encountered in the permitting and development of mineral projects such as unusual o r unexpected
geological formations, negotiations with government and other thir d parties, unanticipated metallurgical difficulties, delays a ssociated with
permits, approvals and permit appeals, ground c ontrol problems, adverse weather conditi ons, process upsets and equipment malfun ctions;
risks associated with labour disturbances and availability of skilled labour and managemen t; fluctuations in the market prices of our principal
commodities, which are cyclical and subjec t to substantial price fluctuations; ri sks created through competition for mining pro jects and
properties; risks associated with lack of access to markets; risks associated with availability of and our ability to obtain both tailings from DET’s
current production and historic tailings from tailings deposit; risks with respect to completion of all phases of the Cauquenes expansion, the
ability of the Company to draw do wn funds from the Bank Facilit y and the Standby LOC, all as described in Description of the Bu siness,
below; the availability of and ability of the Company to obtain adequate funding on reasonable te rms for expansions and acquis itions,
including all phases of the Cauquenes expansion; mine plan estimate s; risks posed by fluctuations in exchange rates and interes t rates, as
well as general economic conditions; risks associated with environmental compliance and changes in environmental legislation and regulation;
risks associated with our dependence on third parties for the prov ision of critical services; ri sks associated with non-perform ance by
contractual counterparties; title risks; social and political risks associated with operations in foreign countries; risks of changes in laws affecting
our operations or their interpretation, including foreign exchange controls; and risks associated with tax reassessments and le gal proceedings.
Many of these risks and uncertainties apply not only to the Co mpany and its operations, but also to Codelco and its operations. Codelco’s
ongoing mining operations provide a significant portion of the materials the Com pany processes and its resulting metals product ion, therefore
these risks and uncertainties may also affect their operations and in turn have a material effect on the Company.
Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward -looking
statements contained in this news release. Such statements are based on a number of assumptions which may prove to be incorrect ,
including, but not limited to, assumptions about:
• general business and economic conditions;
• interest rates;
• 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 vola tility of prices of copper and other commodities and products used in
our operations;
• the ongoing supply of material for processi ng from Codelco’s current mining operations;
• the ability of the Company to profitably extract and process material from the Cauquenes tailings deposit;
• the timing of the receipt of and retention of per mits and other regulatory and governmental approvals;
• the availability of and ability of the Company to obtain adequate funding on reasonable terms fo r expansions and acquisitions ,
Including all phases of the Cauquenes expansion;
• the ability of the Company to draw down funds from the Bank Facility and the Standby LOC, all as described in Description of the
Business, below;
• our costs of production 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;
• 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 preliminary economic assessment (incl uding with respect to size, grade and recoverability) and the geolog ical,
operational and price assumptions on which these are based;
• tax benefits and tax rates;
• the outcome of our copper concentrate sale s and 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 and renew permits and licenses in a timely manner; 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 budge ted
production levels.
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 projected and expressed in , or implied by, our forward-looking stat ements. Except as
required by law, we undertake no obligation to update publicly or otherwise revise any forward-looking statements or the forego ing list of
factors, whether as a result of new information or future events or otherwise.