Amerigo Reports Q3-2020 Production Results
October 16, 2020
N.R. 2020-11
Amerigo Reports Q3-2020 Production Results
Vancouver, British Columbia – October 16, 2020 /CNW/ - Amerigo Resources Ltd. ("Amerigo" or the "Company")
(TSX: ARG ) is pleased to announce Q3-2020 production results from Minera Valle Central ( "MVC"), the
Company’s 100% owned operation located near Rancagua, Chile.
MVC produced 14.7 million pounds (“M lbs”) of copper at a cash cost of US$1.80 per pound (“/lb”) and 0.4 M lbs
of molybdenum.
MVC’s copper production from fresh and Cauquenes tailings increased 13% compared to Q2-2020 and was 9%
higher than the Q3-2020 guidance provided in the Q2-2020 production results.
July 2020 August 2020 September 2020 Q3-2020
Fresh tailings
Tonnes per day 103,173 121,286 133,867 119,285
Operating days 31 31 30 92
Tonnes processed 3,198,361 3,759,858 4,016,016 10,974,235
Copper grade 0.145% 0.127% 0.137% 0.136%
Copper recovery 22% 19% 20% 20%
Copper produced (million of pounds) 2.27 2.02 2.39 6.68
Cauquenes tailings
Tonnes per day 50,071 57,723 53,793 55,216
Operating days 18 31 30 79
Tonnes processed 940,953 1,807,295 1,613,792 4,362,040
Copper grade 0.248% 0.247% 0.240% 0.245%
Copper recovery 34% 34% 35% 34%
Copper produced (million of pounds) 1.70 3.29 3.01 8.00
Copper produced (M lbs) 3.97 5.31 5.40 14.68
Cash cost (US$/pound copper) 1.95 1.79 1.70 1.80
Q3-2020 copper production was positively impacted by an increase in tonnage processed at Cauquenes as more
water became available in MVC following a return to almost normal rainfall levels. MVC had reduced Cauquenes
tonnage processing in February 2020 in response to severe drought conditions then present in central Chile.
In Q3-2020, processing rates averaged 119,285 tonnes per day (“ TPD”) for fresh tailings and 55,216 TPD for
Cauquenes, higher than expected in both cases. Copper grade in fresh tailings and Cauquenes copper recovery
were slightly higher than expected. Operating days in Q 3-2020 were 92/92 for fresh tailings and 79/92 for
Cauquenes, where 13 days of operation were lost in July due to strong rainfall.
Q3-2020 cash cost was US$1.80/lb, US$0.08/lb higher than cash cost in Q2 -2020 and US$0.24/lb higher than
guidance. Cash cost in Q3-2020 included $0.02/lb of one-time labour costs from severance paid to MVC workers.
7 positions were permanently eliminated. Other factors affecting cash cost compared to guidance included an
increase of approximately US$0.04/lb from the appreciation of the Chilean peso against the U.S. dollar on a
quarter average basis, US$0.04/lb from lower molybdenum credits due to lower than expected molybdenum
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prices and production and $0.14/lb in aggregate from higher than anticipated power, lime, industrial water and
Cauquenes processing costs.
MVC’s operations continued through Q3-2020 without any significant disruptions due to Covid-19.
Production results for the most recent five quarters are summarized below:
Q3-2020 Q2-2020 Q1-2020 Q4-2019 Q3-2019
Fresh tailings
Tonnes per day 119,285 119,435 120,037 114,448 118,296
Operating days 92 91 78 92 92
Tonnes processed 10,974,235 10,868,556 9,306,854 10,529,332 10,883,200
Copper grade 0.136% 0.137% 0.125% 0.112% 0.110%
Copper recovery 20.3% 20.3% 19.9% 17.5% 18.8%
Copper produced (M lbs) 6.68 6.66 5.13 4.57 4.99
Cauquenes tailings
Tonnes per day 55,216 35,875 43,763 58,908 58,449
Operating days 79 89 67 91 90
Tonnes processed 4,362,040 3,164,898 2,976,621 5,365,311 5,226,443
Copper grade 0.245% 0.257% 0.261% 0.273% 0.270%
Copper recovery 34.0% 34.9% 33.4% 34.5% 35.7%
Copper produced (M lbs) 8.00 6.31 5.72 11.15 11.10
Fresh tailings +Cauquenes (M lbs) 14.68 12.97 10.85 15.72 16.09
Slag Processing
Tonnes processed - - 14,960 93,248 33,885
Copper grade - - 4.6% 5.3% 5.0%
Copper recovery - - 80% 79% 81%
Copper produced (M lbs) - - 1.23 8.62 3.0
Copper produced (M lbs) 14.68 12.97 12.08 24.34 19.09
Copper delivered (M lbs) 14.92 13.70 11.82 24.07 19.55
Cash cost(US$/pound copper) 1.80 1.72 1.94 1.79 1.56
Molybdenum produced (M lbs) 0.37 0.35 0.19 0.39 0.53
Molybdenum sold (M lbs) 0.37 0.36 0.23 0.41 0.51
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Water reserves at Colihues increased from a low point of 300,000 cubic meters earlier in 2020 to 10 million cubic
meters, a level not seen since January 2018. These existent water reserves are sufficient for MVC to maintain
Cauquenes tonnage processing into H1-2021.
The following figure shows the levels of water reserves at Colihues since January 2017:
0
2
4
6
8
10
12
14
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
WATER RESERVES [MM m3]
WATER RESERVES AT COLIHUES DAM
2017-2020
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The Company’s production forecast for Q4 -2020 assumes the known impact of debottlenecking initiatives
implemented to date. MVC is finalizing with its technical consultants an implementation plan of additional
initiatives to improve plant performance.
Under these assumptions, MVC now estimates that it will produce 56.8 M lbs of copper in 2020, an increase
from prior guidance of 55.7 M lbs. Annual cash cost is projected at US$1.78/lb compared to prior guidance of
US$1.67/lb due to the appreciation of the Chilean peso in response to stronger copper prices . Additional
information is included in the following table.
Q1-2020 Q2-2020 Q3-2020 Q4-2020 2020
Actual Actual Actual Est.
Fresh tailings
Tonnes per day 120,037 119,435 119,285 132,582 122,796
Operating days 78 91 92 92 353
Tonnes processed 9,306,854 10,868,556 10,974,235 12,197,499 43,347,144
Copper grade 0.125% 0.137% 0.136% 0.135% 0.134%
Copper recovery 19.9% 20.3% 20.3% 20.6% 20.3%
Copper produced (M lbs) 5.13 6.66 6.68 7.49 25.96
Cauquenes tailings
Tonnes per day 43,763 35,875 55,216 55,000 47,741
Operating days 67 88 79 92 326
Tonnes processed 2,976,621 3,164,898 4,362,040 5,060,000 15,563,559
Copper grade 0.261% 0.257% 0.245% 0.245% 0.250%
Copper recovery 33.4% 34.9% 34.0% 34.9% 34.3%
Copper produced (M lbs) 5.72 6.31 8.00 9.53 29.56
Fresh tailings +Cauquenes (M lbs) 10.85 12.97 14.68 17.02 55.52
Slag Processing
Tonnes processed 14,960 - - - 14,960
Copper grade 4.6% - - - 4.6%
Copper recovery 80% - - - 80%
Copper produced (M lbs) 1.23 - - - 1.23
Copper produced (M lbs) 12.08 12.97 14.68 17.02 56.75
Cash cost(US$/pound copper) 1.94 1.72 1.80 1.65 1.78
Molybdenum produced (M lbs) 0.19 0.35 0.37 0.42 1.33
Release of Q3-2020 results on November 4, 2020
The Company will release its Q3-2020 financial results at market open on Wednesday, November 4, 2020.
Investor conference call on November 5, 2020
Amerigo’s quarterly investor conference call will take place on Thursday, November 5, 2020 at 11:00 am Pacific
Time/2:00 pm Eastern Time.
To join the call, please dial 1-800-806-5484 (Toll-Free North America) and enter passcode 8944713# to
participate in the Amerigo Resources conference call.
The analyst and investment communities are welcome to ask questions of management. Media can attend on a
listen-only basis.
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About Amerigo and MVC
Amerigo Resources Ltd. is an innovative copper producer with a long-term relationship with C orporación
Nacional del Cobre de Chile (“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:
• Aurora Davidson, President and CEO (604) 697-6207
• Klaus Zeitler, Executive Chairman (604) 697-6204
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 C ompany’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", "shou ld", "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, operating days, tonnes processed, copper grade, copper recovery and cash cost for the remainder of the
year;
• the Colihues water reserves being sufficient for MVC to maintain Cauquenes tonnage processing into H1-2021;
• our strategies and objectives;
• our estimates of the availability and quantity of tailings;
• our planned production levels and future production; and
• our financial and operating objectives.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that are beyond our ability to predict
or control, including risks that may affect our operating or capital plans; water supply risk to MVC as a result of extreme drought conditions
in Chile; risks generally encountered in the permitting, development and operation 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, ground control problems, adverse weather conditions, process upsets and equipment malfunctions;
hazards inherent in the mining industry that may cause personal injury or loss of life, severe damage to or destruction of property and
equipment, pollution or environmental damage, claims by third parties and sus pension of operations; 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 subject to substantial price fluctuations; the risk of
production and transportation disruptions; 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 from tailings deposit; El Teniente mine plan estimates; risks posed by fluctuations in exchange rates and
interest rates, as well as general economic conditions; risks associated with environm ental compliance and changes in environmental
legislation and regulation; risks associated with our dependence on third parties for the provision of critical services; risks associated with
non-performance 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; risks associated with tax
reassessments and legal proceedings; and risks of disruptions to the Company's information technology systems, including those related
to cybersecurity. Notwithstanding the efforts of the Company and MVC, there can be no guarantee that 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, 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;
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• the supply and demand for, deliveries of, and the level and volatility of prices of copper and other commodities and products used in
our operations;
• the ongoing supply of material for processing 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 permits and other regulatory and governmental approvals;
• our costs of production and our production and productivity levels, as well as those of our competitors;
• the impact of debottlenecking initiatives implemented to date;
• 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;
• costs of closure of various operations;
• market competition;
• the accuracy of our preliminary economic assessment (including with respect to size, grade and recoverability) and the geolog ical,
operational and price assumptions on which these are based;
• our ability to comply with our loan covenants;
• 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 returning to 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 budgeted
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 difficult or impossible to predict and ar e beyond the Company’s control, the
Company cannot assure that it will achieve or accomplish the expectations, beliefs or projections described in the forward- looking
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.
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.