Quarterly Dividends Outlook
Over $25M
Amerigo's cash balance is currently over the Company's desired cash target of $25M.
The quarterly dividends of Cdn$0.03 per share are the cornerstone of Amerigo’s capital return strategy, and under current copper prices, Amerigo considers them secure.
Performance Dividends Outlook
Performance dividends allow Amerigo to return excess cash over $25M to shareholders flexibly. They are paid in addition to regular quarterly dividends and depend on Amerigo’s assessment of the global macro environment and the copper price outlook. In a stable global business environment with strong copper prices, performance dividends can be declared from time to time. Amerigo declared its first performance dividend of Cdn$0.04 per share in July 2024.
Performance dividends are a flexible way to deploy excess cash from higher copper prices. A secondary benefit of a performance dividend is its unexpected nature. Because short sellers do not receive, but instead must pay, all declared dividends, the simple possibility of an unexpectedly declared performance dividend should help to minimize short selling of Amerigo shares.
Our analysis indicates that long-term structural supply issues in the copper industry will support higher copper price levels. In that environment, Amerigo can remain a leader in returning capital and offering best-of-class total returns to investors. Our quarterly dividend is the foundation of our capital return policy, and performance dividends are a flexible tool to transfer the benefits of solid copper performance to Amerigo’s shareholders. This combination is powerfully and predictably generating a strong ROIC for Amerigo and its shareholders.
Share Buybacks Outlook
In 2021, 2022, 2023 and 2024, Amerigo completed four share repurchase programs, a Substantial Issuer Bid (SIB) and three Normal Course Issuer Bids (NCIB), which reduced common shares outstanding by 12%.
An NCIB may be implemented for up to one year and limits the number of shares repurchased daily under the program. Amerigo determines the timing of the purchases. This allows the Company to take advantage of discounted valuations during periods of market weakness.
Amerigo's current NCIB was launched on December 2, 2024. This is the Company's fifth consecutive buyback program and runs until December 1, 2025. Depending on copper prices and market conditions, Amerigo will opportunistically utilize this NCIB. At a minimum, the Company intends to buy back enough shares to eliminate annual shareholder dilution.
A SIB is used more infrequently but is a powerful way to quickly return capital to shareholders when the Company perceives its share price as undervalued. If large shareholders have met their investment objectives, a SIB is a valuable tool to remove large share volumes from the market while minimizing downward pressure on Amerigo's share price.
Under NCIBs and SIBs, all shares purchased by Amerigo are cancelled, leaving fewer shares outstanding to receive future dividends.
Our Track Record
$52.5 M Dividends | $25.5 M Share Buybacks
Since starting the capital return strategy in September 2021, Amerigo has paid cumulative dividends of Cdn$0.42 per share ($52.5 million) and used $25.5 million to purchase and cancel 21.58 million common shares. The Company initiated a fourth Normal Course Issuer Bid share buyback program on December 2, 2024, which ends on December 1, 2025.
Reducing Share Count with Buybacks
A share buyback program is a valuable component of a multi-faceted capital return strategy. A share buyback program allows the Company to opportunistically take advantage of periods of share price weakness and reduce the number of shares available in the market. This lends positive support to the Company’s share price.
Over time, a sustained commitment to reducing the number of outstanding shares will have recognizable benefits to remaining shareholders. All else being equal, a fixed amount of capital being returned to fewer shares means more cash for those remaining shareholders.
