Amerigo Reports Q1-2022 Production Results Q1-2022 copper production of 16.5 million pounds Cash cost1 of $1.90/lb Q1-2022 copper production and cash cost aligned with annual guidance
April 12, 2022
N.R. 2022-03
Amerigo Reports Q1-2022 Production Results
Q1-2022 copper production of 16.5 million pounds
Cash cost1 of $1.90/lb
Q1-2022 copper production and cash cost aligned with annual guidance
VANCOUVER, BRITISH COLUMBIA – April 12, 2022/ Amerigo Resources Ltd. (TSX: ARG; ARREF:OTC)
(“Amerigo” or the “Company”) is pleased to announce production results for the quarter ended March 31, 2022
(“Q1-2022”) 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 unless indicated otherwise.
“We are pleased to report another strong operational quarter with production of 16.5 million pounds of copper at
a cash cost of $1.90 per pound for the first quarter of 2022. These results are aligned with our 2022 annual
guidance, which incorporates lower Q2 production due to MVC’s annual nine-day maintenance plant shutdown”,
said Aurora Davidson, Amerigo’s President and CEO. “With a quarterly copper price of $4.64 per pound, $0.32
higher than the price in the previous quarter, Q1-2022 was a strong start to the year for Amerigo. We look forward
to releasing financial results on May 4, 2022 and hosting our quarterly earnings call on May 5, 2022”, Ms.
Davidson added.
In Q1-2022, MVC produced 16.5 million pounds (“M lbs”) of copper at a cash cost 1 of $1.90 per pound (“/lb”).
Copper production in the quarter reflects Amerigo’s fo cus on maximizing production from fresh tailings, which
accounted for 58% of quarterly copper production. This focus has allowed MVC to reduce processing from
Cauquenes with the advantages of preserving water and delaying mineral resource depletion without lowering
copper production.
Molybdenum production in the quarter was 0.2 M lbs, trending slightly below guidance mostly due to lower
molybdenum content in fresh tailings.
Water reserves at Colihues on March 31, 2022 were 4.5 million cubic meters, in line with projections. Water
reserves continue to be sufficient for MVC to maintain the projected Cauquenes tonnage processing for a period
of at least eighteen months.
MVC’s annual plant shutdown commenced on April 5 and is currently expected to be completed on April 13,
2022.
MVC’s operations have continued without any significant disruptions due to Covid-19.
MVC’s average copper price in Q1-2022 was $4.64/lb, compared to $4.32/lb in Q4-2021.
In Q1-2022, Amerigo returned $7.5 million to shareholders: $4.1 million were paid on March 21, 2022, through
Amerigo’s increased quarterly dividend of Cdn$0.03 per share, and $3.4 million were returned through the
purchase of 2.4 million common shares for cancellation through Amerigo’s ongoing Normal Course Issuer Bid
(“NCIB”). A further 6.9 million shares remain available for repurchase and cancellation under the NCIB.
On March 30, 2022, Amerigo filed an updated National Instrument 43-101 Technical Report for MVC, available
on www.sedar.com and at www.amerigoresources.com.
On March 31, 2022, the Company’s cash and restricted cash balance was $77.5 million (an increase of $13.5
million from December 31, 2021).
Q1-2022 Q4-2021 Q3-2021 Q2-2021 Q1-2021
Fresh tailings
Tonnes per day 139,238 147,047 137,650 129,153 128,238
Operating days 90 91 84 89 90
Tonnes processed 12,525,446 13,381,267 11,562,611 11,533,405 11,541,378
Copper grade 0.157% 0.149% 0.152% 0.144% 0.143%
Copper recovery 22.2% 20.9% 22.3% 20.2% 19.3%
Copper produced (M lbs) 9.61 9.26 8.62 7.37 7.03
Cauquenes tailings
Tonnes per day 40,628 46,869 52,981 54,026 55,457
Operating days 90 91 81 87 87
Tonnes processed 3,615,801 4,293,218 4,267,203 4,701,475 4,811,171
Copper grade 0.252% 0.242% 0.238% 0.230% 0.242%
Copper recovery 33.8% 33.6% 33.0% 31.9% 33.1%
Copper produced (M lbs) 6.86 7.64 7.37 7.61 8.47
Copper produced (M lbs) 16.47 16.90 15.99 14.99 15.50
Copper delivered (M lbs) 16.29 16.72 16.90 15.13 15.11
Cash cost
1
($/lb) 1.90 1.68 1.61 1.81 1.88
Molybdenum produced (M lbs) 0.24 0.30 0.32 0.33 0.40
Molybdenum sold (M lbs) 0.22 0.30 0.34 0.33 0.36
Release of Q1-2022 results on May 4, 2021
Amerigo will release Q1-2022 financial results at market open on Wednesday, May 4, 2022.
Investor conference call on May 5, 2022
Amerigo’s quarterly investor conference call will take place on Thursday, May 5, 2022 at 11:00 am Pacific
Standard Time/2:00 pm Eastern Standard Time. To join the call, please dial 1-888-664-6392 (Toll-Free North
America) and enter confirmation number 54894230.
Upcoming Investor Conference Participation
Amerigo will be participating in the Sidoti Micro Cap Virtual Conference and the Inflection Partners 2022 Virtual
Conference on May 11 and 12, 2022. CEO Aurora Davidson will present the Amerigo investment thesis and will
be available for one-on-one meetings throughout each event.
About Amerigo and MVC
Amerigo Resources Ltd. is an innovative copper producer with a long-term relationship with Corporación
Nacional del Cobre de Chile (“Codelco”), the world’s largest copper producer.
Amerigo produces copper concentrate and molybdenum concentrate as a by-product 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; Web: www.amerigoresources.com; Listing: ARG:TSX.
Contact Information
Aurora Davidson Graham Farrell
President and CEO Investor Relations
(604) 697-6207 (416) 842-9003
[email protected] [email protected]
1 Non-IFRS Measures
This news release includes references to cash cost, a performance measure not defined under International Financial Reporting Standards
(“IFRS”). Cash cost is a performance measure commonly used in the mining industry. In Amerigo’s case, cash cost is the aggregat e of
smelting and refining charges, tolling/production costs net of inv entory adjustments and administrat ion costs, net of by-produc t credits.
Cash cost per pound produced is based on pounds of copper produced and is calculated by dividing cash cost over the number of pounds
of copper produced.
The Company provides a reconciliation of cash cost against IFRS measures on a quarterly basis when financial results are reported.
Cash cost is included in this news release because it is a key performance measure used by management to monitor operating
performance, assess corporate performance, and to plan and asse ss the overall effectiveness and efficiency of Amerigo’s operati ons.
Performance measures such as cash cost are not standardized financial measures unde r IFRS and, therefore, amounts presented may
not be comparable to similar financial measures disclosed by other companies. These performance measures should not be consider ed
in isolation as a substitute for measures of performance in accordance with IFRS.
Cautionary Note Regarding Forward-Looking Information
This news release contains certain forward-looking information and statements as defined in applicable securities laws (collectively referred
to as "forward-looking statements"). These statements relate to future events or the Company’s future performance. All statements 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", "should", "believe" and similar expressions is intended to identify forward-looking
statements. These forward-looking statements include but are not limited to, statements concerning:
forecasted 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 sufficiency of Colihues water reserves to maintain the C auquenes tonnage processing projected in Amerigo’s 2022 production
guidance;
prices and price volatility for copper, molybdenum and ot her commodities and of materials we use in our operations;
the demand for and supply of copper, mo lybdenum and other commodities and materials that we produce, sell and use;
sensitivity of our financial results and shar e 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;
our ability 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 causing personal injury or loss of life, severe damage to or destruction of property a nd
equipment, pollution or environmental damage, claims by third parties and suspension of operations
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, modifica tion 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.
These forward-looking stat ements involve known and unknown ri sks, uncertainties and ot her factors that may cause actual results or
events to differ materially from those ant icipated in such statements. Inherent in forward-looking statements are risks and unc ertainties
beyond our ability to predict or control, including risks that may affect our operating or capital plans; risks generally encou ntered in the
permitting and development of mineral projects such as unusual or unexpected geological formations, negotiations with government and
other third parties, unanticipated metallurgical difficulties, delays associated with permits, approvals and permit appeals, gr ound control
problems, adverse weather conditions, process upsets and equip ment malfunctions; risks associated with labour disturbances and
availability of skilled labour and management; risks related to the potential impact of global or national health concerns, including COVID-
19, and the inability of employees to access sufficient healthcare; government or regulatory actions or inactions; fluctuations in the market
prices of our principal commodities, which are cyclical and s ubject to substantial price fluctuations; risks created through competition for
mining projects and properties; risks associated with lack of access to markets; risks associated with availability of and our ability to obtain
both tailings from Codelco’s Division El Teniente’s current production and historic tailings fr om tailings deposit; the availab ility of and
ability of the Company to obtain adequate funding on reasonable terms for expansions and acquisitions; mine plan estimates; risks posed
by fluctuations in exchange rates and interest rates, as well as general economic conditions ; risks associated with environment al
compliance and changes in environmental legislation and regulatio n; risks associated with our dependence on third parties for t he
provision of critical services; risks asso ciated with non-performance by contractual count erparties; title risks; social and po litical 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 legal proceedings. Notwithstanding the efforts of the Company and
MVC, there can be no guarantee t hat the Company’s or MVC’s staff will not contract COVID-19 or that the Company’s and MVC’s
measures to protect staff from COVID-19 will be effective. Many of these risks and uncertainties apply not only to the Company and its
operations, but also to Codelco and its operations. Codelco’s ongoing mining operations provide a significant portion of the materials the
Company processes and its resulting metals production, therefor e 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 several assumptions which may prove to be incorrect, including,
but not limited to, assumptions about:
• general business and economic conditions;
• interest and currency exchange 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 volat ility of prices of copper, moly bdenum and other commodities a nd
products used in our operations;
• the ongoing supply of material for processing from Codelco’s current mining operations;
• the grade and projected recoveries of tailings processed by MVC;
• 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 permits and other regulatory and governmental approvals;
• our costs of production and our production and productivity 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 supplies in sufficient quantities and on a timely basis;
• the availability of qualified employees and contractors for our operations;
• our ability to attract and retain skilled staff;
• the satisfactory negotiation of collective agreements with unionized employees;
• the impact of changes in foreign exchange rates and capital repatriation on our costs and results;
• engineering and construction timetables and capital costs for our expansion projects;
• costs of closure of various operations;
• market competition;
• tax benefits and tax rates;
• the outcome of our copper concentrate sales and treatment and refining charge negotiations;
• the resolution of environmental and other proceedings or disputes;
• the future supply of reasonably priced power;
• rainfall in the vicinity of MVC continuing to trend towards normal levels;
• average recoveries for fresh tailings and Cauquenes tailings;
• 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.
Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject
to significant uncertainties and contingencies which are diffic ult or impossible to predict and are beyond the Company’s contro l, the
Company cannot assure that it will achieve or accomplish the ex pectations, beliefs or projections described in the forward-look ing
statements.
We caution you that the foregoing list of important factors and assumptions is not exhaustive. Other events or circumstances could cause
our actual results to differ materially from those estimated or projected and expressed in, or implied by, our forward-looking statements.
You should also carefully consider the matters discussed under Risk Factors in the Company`s Annual Information Form. The forwa rd-
looking statements contained herein speak only as of the date of this news release and except 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.