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Amerigo posts Q1 profit

Chile copper producer Amerigo Resources (TSX: ARG) is more than halfway towards completing its phase two expansion project at its Minera Valle Central (MVC) concentrator, near Codelco’s major El Teniente copper-molybdenum mine, and says the project aimed at lifting copper output to 85-90 million pounds a year is on track for delivery in the second half of this year.
Amerigo posts Q1 profit Amerigo posts Q1 profit Amerigo posts Q1 profit Amerigo posts Q1 profit Amerigo posts Q1 profit

Amerigo’s MVC plant sources fresh and historic copper and moly tailings from Codelco’s giant El Teniente mine

Staff reporter

The Vancouver-based company this week reported net income of US$1.2 million on copper and moly sales revenue of $33.9 million for the March quarter, when it generated $5.9 million of surplus cash from operations. It had a cash balance of $29.9 million at the end of the period.

MVC, which processes tailings from El Teniente under a long-term tolling arrangement between Amerigo and Codelco, yielded 14.2Mlb of copper in Q1 2018 at total costs of US$2.83/lb, including higher copper and molybdenum royalties.

The average copper price received by Amerigo in Q1 2018 was US$3.09/lb, and molybdenum US$12.12/lb.

Amerigo CEO Rob Henderson said the company continued to expect 2018 full year production of 65-70Mlb of copper at a cash cost of $1.45-1.60/lb, with molybdenum production at 1.5Mlb. Stronger production and lower cash costs were expected in the second half of 2018 when better quality material from El Teniente's Cauquenes tailings facility was accessed and plant recoveries improved on completion of Phase Two.

Henderson said phase two construction was on track for completion in the September quarter, with full production expected in Q4.

"MVC expects to complete the project within budget of $35.3 million including contingencies. Phase two will improve flotation recovery efficiency, allowing MVC to increase production to 85-to-90Mlb of copper per year."

Amerigo shares were up nearly 1% Wednesday to C$1.04, giving the company a market capitalisation of of C$189.16 million.

The shares were trading at C59c this time last year, and reached a high of $1.30 in January this year.