Amerigo Executes Mandate Agreement with BBVA to Arrange Financing for Phase Two of the Cauquenes Expansion
February 21, 2017
N.R. 2017-2
Amerigo Executes Mandate Agreement with BBVA to Arrange Financing
for Phase Two of the Cauquenes Expansion
VANCOUVER, BRITISH COLUMBIA – Febr uary 21, 2017/Amerigo Resources Ltd. (TSX: ARG)
("Amerigo" or the "Company") is pleased to announce that its wholly-owned Chilean subsidiary,
Minera Valle Central S.A. (“MVC”), has exec uted a financing mandate agreement (the "Mandate
Agreement") with BBVA Chile and BBVA Securities Inc. (collectively “BBVA”).
The Mandate Agreement sets out an exclusive arrangement with BBVA describing the activities
needed to arrange a loan facility (the “Loan Facility”) for the second phase of the planned expansion of
MVC’s operations for the processing of tailings from the historic Cauquenes deposit (the “Cauquenes
Phase Two Expansion”). BBVA has agreed to seek credit approval to provide up to 50% of the amount
of the Loan Facility, and to act as mandated lead arranger and fronting hedge bank.
The Cauquenes Phase Two Expansion will consist of the installation of additional flotation cells and
associated plant required to increase recovery rates and enable MVC to reach an estimated annual
production of 87 million pounds of copper. The estimated cost of the Cauquenes Phase Two
Expansion is US$30 million, to be financed by the Loan Facility. Construction of Phase Two is
expected to be completed in the second half of 2018.
The Mandate Agreement contemplates the completion of technical, environmental, market, insurance,
fiscal and legal due diligence and is subject to customary representations, warranties and conditions
precedent, including agreement on final terms and conditions and requisite documentation for the
loan, completion of due diligence and procurement of credit approvals.
Indicated terms of the Loan Facility have been received and are expected to be finalized on
completion of due diligence which is now underway.
Rob Henderson, Amerigo’s President and CEO stated “We are extremely pleased to work again with
BBVA in the next phase of MVC’s production expansion, an d look forward to starting construction in
Q2-2017.”
About the Company:
Amerigo Resources Ltd. is an innovative copper pr oducer with a long-term relationship with Codelco,
the world’s largest copper producer. Amerigo produc es 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 defi ned in applicable securities laws (collect ively
referred to as "forward-looking statements"). These statements rela te to future events or our future performance. All statement s other
than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "continue" , "estimate",
"expect", "may", "will", "project", "predict", "potential", "s hould", "believe" and similar expressions is intended to identify forward-looking
statements. Although the Company believes that these assumpti ons were reasonable when made, because these assumptions are
inherently subject to significant uncertain ties and contingencies which are difficult or impossible to predict and are beyond t he
Company’s control, the Company cannot assure that it will achi eve or accomplish the expectations , beliefs or projections descri bed in
the forward-looking statements. These stat ements involve known and unknown risks, uncertainties and other factors that may caus e
actual results or events to differ materially from those antic ipated in such forward-looking statements. These statements speak only as
of the date of this news release. These forward-looking statements include but are not limited to, statements concerning:
• the Cauquenes Phase Two Expansion, including, but not limit ed to, the estimated production of copper and the increase in
recovery rates as a result of such expansion, and the estimated cost of such expansion;
• the successful negotiation of terms of the Loan Facility;
• the commencement of construction in respect of the Cauquenes Phase Two Expansion in Q2-2017; and
• our strategies and objectives.
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 mi neral projects such as unusu al or
unexpected geological formations, negotiations with government and other third parties, unanticipated metallurgical difficultie s, delays
associated with permits, approvals and permit appeals, ground contro l problems, adverse weather conditions, process upsets and
equipment malfunctions; risks associated wi th labour disturbances and av ailability of skilled labour and management; fluctuatio ns in the
market prices of our principal commodities , which are cyclical and subject to subst antial price fluctuations; risks associated with the
availability and pricing of materials us ed in our operations; risks created through co mpetition for mining projects and propert ies; risks
associated with lack of access to markets; risks associated with availability of tailings and mine plan estimates; risks posed by
fluctuations in exchange rates and interest rates, as well as general economic conditions; risks associated with environmental
compliance and changes in environmental legi slation and regulation; risks associated with our dependence on third parties for t he
provision of critical services; risks a ssociated with non-performance by contractual counterparties; title risks; social and po litical risks
associated with operations in foreign count ries; risks of changes in laws affecting our operations or their interpretation, inc luding foreign
exchange controls; and risks associated with tax reassessments a nd legal proceedings. All of these risks and uncertainties app ly not
only the Amerigo and its subsidiaries (col lectively, the “Group”) and their operations, but also to Codelco and its operations. Codelco’s
ongoing mining operations provide a significant portion of the materials the Group processes and its resulting production and t herefore
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 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:
• the availability of, and ability of the Company to obtain, the Loan Facility for the Cauquenes Phase Two Expansion on
reasonable terms;
• 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 volatilit y of prices of copper and other commodities and of the
products 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;
• 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;
• 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,
operational 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 budge ted
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 material ly from those estimated or projected and expressed in, or implied by, our forward-lo oking
statements. You should also carefully consider the matters discu ssed under "Risk Factors" in our Annual Information Form. Excep t as
required by law, we undertake no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of
factors, whether as a result of new information or future events or otherwise.