Amerigo expects to produce at the higher copper output rate next year with cash costs at $1.45/lb.
It produced 14.7Mlb of copper and 0.4Mlb of molybdenum in the June 2018 quarter at a US$1.71/lb Cu cash cost and $2.74/lb total cost. Total revenue of $33 million was struck on an average copper price received of $3.16/lb (versus $2.59/lb in the same period last year) and a $11.51/lb average molybdenum price ($8.00/lb in Q2 2017).
Henderson said the Cauquenes Phase Two expansion project was on time and budget at the end of June. The project would improve flotation recovery efficiency and allow MVC to lift copper output by 36-44% on the 2017 level.
"MVC anticipates production of the first concentrates from the Phase Two expansion in Q3-2018 and expects full production to commence in Q4-2018," Amerigo said.
The company expects to finish this calendar year with total borrowings at $67.5 million after outlaying about $40 million in 2018 on expansion project capex, sustaining and other general capex, and molybdenum plant upgrades, the latter financed via a seven-year lease and operating contract.
"The group had a working capital deficiency of $9.7 million [at the end of June], caused by scheduled bank debt repayments in the following 12 months ($15.2 million) and the expected repayment of the balance of the DET Price Support Facility in Q3-2018 ($3.2 million)," Amerigo said.
"The group does not consider its working capital deficiency constitutes a liquidity risk, as it anticipates generating sufficient operating cash flow to meet current liabilities as they come due, including if copper prices were to remain in the short-term at current levels ($2.75/lb).
"Working capital deficiencies are not uncommon in companies with short-term debt."