Annou unces Filin ng of NI 43--101 Techn nical Report VAN NCOUVER, BRITISH COLUMBIA C
Marc
N.R. 2
VAN
"Ame
for M
com
flotat
per y
millio
Robe
for th
pers
Cana
the i
this r
In 20
kilom
curre
depo
In M
cont
impo
reso
grad
on t
extra
plan
moly
MVC
appl
Mo w
set o
10
h 30, 2017
2017-4
NCOUVER,
erigo" or the
Minera Valle
mence the C
tion recover
year. Phase
on.
ert D. Hende
he technical
on" for the
adian Secur
nformation t
release.
016, MVC p
metres south
ent productio
osit. El Tenie
Mr. Henders o
racts for t h
oundments (
urce. Histo r
de of materia
he Cauque
action of co p
presents an
ybdenum ove
C’s total infe
ication of m
with 1,461 m
out in the fol
Tailing
Depos
Colihue
Cauqu
Fresh
Total
Amer
BRITISH C
e "Company"
Central, S.A
Cauquenes
ry efficiency
e Two is ex p
erson, P. En
comments
purposes o f
rities Admini
that forms t h
roduced a r
h of Santiag
on of the El
ente is the w
on’s opinion
he processi n
(collectively,
rical record s
al stored in t
nes deposi t
pper and m
n economic
er the period
erred miner a
ining and m
million pound
lowing table
Tabl
gs
sit
es
enes
rigo Annou
COLUMBIA
") is pleased
A. (“MVC”), A
Phase Two
and expand
pected to be
ng, Presiden
related to th
f National I n
strators and
he basis for
record of 56
o, Chile an d
Teniente m
world’s larges
n, there is s
ng of Fres h
, the “Fres h
s of El Teni
the Cauquen
t in four s e
olybdenum
assessment
d 2017 to 20
al resource
mill recovery
ds of recov e
s:
le 1-1 MVC
Tonnes (t)
77,280,000
305,000,00
796,267,11
1,178,547,
unces Filin
– March 3
d to announc
Amerigo’s C
o Expansion
d the existing
completed
nt and CEO
he resource
nstrument 43
d has verified
the disclosu
.8 million p o
d has been
ine (“Fresh
st undergrou
sufficient ge o
h Tailings, a
h, Cauquen e
ente’s mill t
nes and Col
parate ca m
from El Te n
t of producin
037.
estimate fo
losses, is 1
erable coppe
Copper Infe
) Gr
0 0. 2
00 0. 2
15 0. 1
,115 0. 1
ng of NI 43-
30, 2017/C N
ce that it has
Chilean subs
project (“Ph
g facilities to
in the seco n
of Amerigo,
estimate an
3-101 Stand
d the data d
ure in this r e
ounds of co p
in operation
Tailings”) an
und copper m
ological an d
and tailing s
es and Coli h
tailings rep r
ihues impou
mpaigns. M V
niente’s tailin
ng 1,461 mill
r the Fresh
,179 million
er and 38 m
erred Miner
rade (% Cu)
229
267
111
159
-101 Techn
NW/ - Ame
s filed a tech
idiary in con
hase Two”).
o an output o
nd half of 2 0
, is the auth
d its parame
dards of Di s
isclosed in t
elease, and
pper. MVC' s
n since 199 2
nd tailings fr
mine and ha
d economic
s from the
hues Tailin g
resent a de t
undments. A
VC has a l o
ngs and M V
lion pounds
, Cauquen e
tonnes at a
million pound
ral Resourc
Mill
Recov
37
47
24
35
nical Repo
rigo Resou
hnical report
njunction wit
Phase Two
of 85 to 90 m
018 at an e s
or of the R e
eters. Mr. He
sclosure for
this release.
he has ap p
s plant is lo c
2. MVC pro c
rom the histo
as been in pr
evidence t o
Cauquenes
gs”), constitu
tailed acco u
A total of 30
ong operati n
VC’s Decem
of copper a
es and Coli h
a grade of 0
ds of recov e
e Estimate
very (%)
rt
rces Ltd. ( T
(the “Report
h Amerigo’s
o is planne d
million pound
stimated cos
eport and is
enderson is
Mineral Pro
. He has al s
proved the d
cated appro
cesses tailin
oric Cauque
roduction sin
o conclude
and Colih u
ute an infe r
unt of the t o
holes have
ng record o
mber 2016 d
and 38 millio
hues Tailin g
0.159% Cu a
erable molyb
– Dec 31, 2
Recovera
Copper (M
145
847
469
1,461
TSX: ARG,
t”) prepared
intention to
d to improve
ds of copper
st of US$30
responsible
a "qualified
ojects of the
so prepared
disclosure in
oximately 90
gs from the
enes tailings
nce 1904.
that MVC’s
ues tailings
rred mineral
onnage and
been drilled
of economi c
evelopment
n pounds of
gs and afte r
and 0.010%
bdenum, as
2016
able
M lbs)
f
Table 1-2 MVC Molybdenum Inferred Mineral Resource Estimate
– Dec 31, 2016
Tailings
Deposit
Tonnes (t) Grade (% Mo) Mill
Recovery (%)
Recoverable
Molybdenum
(M lbs)
Colihues 77,280,000 0.010 21 4
Cauquenes 305,000,000 0.021 20 28
Fresh 796,267,115 0.005 7 6
Total 1,178,547,115 0.010 15 38
The Environmental Impact Assessment study for the Cauquenes Expansion project (the “Cauquenes Project”)
was filed with the Chilean authorities in 2013, requesting an increase in historic tailings processing rate via an
expansion to the MVC plant. Environmental approval wa s received in 2014. MVC has the necessary sectorial
permits to commence construction of Phase Two. Phase One of the Cauquenes Project was completed in
2015 and has enabled MVC to extract Cauquenes tailings and process them at MVC’s existing plant. Phase
Two is planned to improve flotation recovery efficiency.
Annual production over the initial ten-year period ( 2019-2028) is estimated to be 85 to 90 million pounds of
copper per year at a cash cost of production of approximately $1.51/lb Cu, excluding royalties. Royalties are
estimated to be $0.88/lb Cu at the base case metal prices used in the Report’s economic analysis. At a 7%
discount rate, the unlevered after tax net present value for MVC’s operations is estimated to be approximately
US$480 million at an assumed long term copper price of $3.30/lb. Over the life of the contract, total EBITDA
for MVC is estimated to be $2.5 billion, of which $1.2 billion are the estimated El Teniente royalties.
Using these parameters, the preliminary financial analysis summary presented in Table 1-3 of the Report
indicates that MVC has a positive net cash flow and supports the further development of the Cauquenes
deposit.
The results of the preliminary economic assessment represent forward-looking information that is subject to a
number of known and unknown risks, uncertainties and other factors that may cause actual results to differ
materially from those anticipated in such information. This information speaks only as of the date of this
Technical Report, and is based on a number of assumptions which are believed to be true but which may
prove to be incorrect in future. The preliminary economic assessment is preliminary in nature and it includes
inferred mineral resources that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as mineral reserves. There is no
certainty that the preliminary economic assessment will be realized. Mineral resources that are not mineral
reserves do not have demonstrated economic viability.
In Mr. Henderson’s opinion, the data supporting the inferred mineral resource estimates were appropriately
collected, evaluated and estimated, and the objective of identifying tailings mineralization that could potentially
support future processing operations has been achieved. Mr. Henderson’s recommendation is to proceed
with construction of Phase Two.
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 (including the full funding for Phase Two 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 (including our plan to upgrade our existing plant and oper ations as part of Phase Two of the Cauquenes
Project) 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 Ph ase Two
Cauquenes 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.