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News

Amerigo Resources Ltd. Announces Results for the Quarter Ended June 30, 2007


August 1, 2007

Q2-2007 cash flow from operations of US$12.4M up 20% from $10.3M in Q2-2006

Copper production up 42% to 9.31M lbs

US$5.8M dividend or Cdn6.5¢ per share declared

Q2-2007 earnings of US$10.3M from earnings of US$12.4M in Q2-2006

Strategic investment of 10% in Candente Resource Corp.

VANCOUVER, BRITISH COLUMBIA - August 1/Amerigo Resources Ltd. (TSX:ARG) (“Amerigo” or the “Company”) reported today results for the quarter ended June 30, 2007 (“Q2-2007”). Significant events are as follows:

  • Cash flow from operating activities was $12,409,777 or 13¢ per share in Q2-2007, compared to $10,347,913 or 11¢ per share in Q2-2006.
  • Production in Q2-2007 was 9.31 million pounds of copper and 204,647 pounds of molybdenum, the highest quarterly copper production in the Company's history. Production increased 42% in copper and 1% in molybdenum from Q2-2006 as the full flow of fresh tailings was re-established in the first week of April.
  • Dividend - On July 30, 2007 the Company declared a dividend of $5,776,565 or Cdn 6.5¢ per share payable on August 31, 2007 to shareholders of record as of August 22, 2007.On February 24, 2007 the Company declared a dividend of $5,286,918 or Cdn 6.5¢ per share that was paid on April 4, 2007 to shareholders of record as of March 27, 2007.
  • Net earnings after tax for Q2-2007 were $10,332,687, 17% lower than earnings of $12,444,608 in Q2-2006 as a result of higher cost of sales overall primarily related to higher power costs in Chile and lower copper prices.
  • Earnings per share for the quarter ended June 30, 2007 were 11¢ fully diluted, compared to fully diluted earnings per share of 13¢ in Q2-2006.
  • Gross copper selling price was $3.27/lb after settlement adjustments, compared to an LME average price of $3.47/lb during the quarter. Realized copper price (copper revenue net of smelter and refinery charges and including settlement adjustments to prior quarter sales divided by copper pounds sold in the quarter) was $2.97/lb.
  • Cash costs (the aggregate of smelter, refinery and other charges, production costs net of molybdenum-related net benefits, administration and transportation costs) before El Teniente royalty were $1.19/lb in Q2-2007, compared to cash costs of $0.90/lb in Q2-2006. The increase in cash costs was caused by lower molybdenum by-product credits and higher power costs, mitigated by higher production levels and a significant reduction in smelter and refinery costs pursuant to the rate negotiated for 2007.
  • Total costs (the aggregate of cash costs, El Teniente royalty, MVC stock-based compensation, depreciation and accretion) for Q2-2007 were $1.85/lb compared to $1.51/lb in Q2-2006. The increase in total costs was driven fundamentally by higher cash costs and higher El Teniente royalties due to higher prices.
  • Investment in Candente - Amerigo acquired just below 10% of the issued and outstanding shares of Candente Resource Corp. (“Candente”) at a cost of $8,581,681 in Q2-2007.
  • Capital plant additions in Q2-2007 were $1,440,804, for ongoing mill refurbishing, Colihues engineering studies and civil works. Cash payments for capital expenditures in the quarter were $1,688,749 funded from operating cash flow.
  • Cash balance was $28,567,850 at June 30, 2007 after an investment of $8,581,681 in Candente, dividend payments of $5,286,918 and payments of $7,217,147 for capital expenditures on a year-to-date basis.

The information in this news release and the Selected Financial Information contained in the following page should be read in conjunction with the unaudited Consolidated Financial Statements and Management Discussion and Analysis for the quarter and six months ended June 30, 2007, which will be available at the Company's website at www.amerigoresources.com and at www.sedar.com.

Amerigo Resources Ltd. is a Canadian junior company producing copper and molybdenum from its MVC operations near Santiago, Chile.Tel: (604) 681-2802; Fax: (604) 682-2802; Web: www.amerigoresources.com; Listing: ARG:TSX

For further information, please contact:    

Klaus Zeitler, President  
Amerigo Resources Ltd. (604) 681-2802
  (604) 218-7013

The Toronto Stock Exchange has not reviewed nor accepted responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management.Statements contained in this news release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results.Such risks and uncertainties are detailed in the Company's filings with the TSX and on SEDAR.Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made.The Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change.

AMERIGO RESOURCES LIMITED
SELECTED FINANCIAL INFORMATION

QUARTERS ENDED JUNE 30, 2007 AND 2006
All figures are in US Dollars

Consolidated Balance Sheets

 

June 30,
2007
$

December 31,
2006
$

Cash and cash equivalents

28,567,850

26,574,059

Mineral property, plant and equipment

85,412,937

83,414,103

Other assets

36,483,898

24,315,886

Total assets

150,464,685

134,304,048

 

 

 

Total liabilities

26,022,137

23,938,019

Shareholders’ equity

124,442,548

110,366,029

Total liabilities and shareholders’ equity

150,464,685

134,304,048

 
Consolidated Statements of Operations and Comprehensive Income

 

Quarter ended

Quarter ended

 

June 30,
2007

June 30,
2006

 

$

$

Total revenue, net of smelter and refinery charges

 

32,011,648

 

27,482,949

Cost of sales

20,092,722

12,625,002

Other expenses

825,764

654,234

Non-operating income, net

(1,371,157)

(704,893)

Income tax expense

1,967,709

2,343,065

Minority Interest

163,923

120,933

Net earnings

10,332,687

12,444,608

 

 

 

EPS – Basic

0.11

0.13

EPS – Diluted

0.11

0.13

 

 

 


Consolidated Statements of Cash Flows

 

 

Quarter ended

Quarter ended

 

June 30,
2007

June 30,
2006

 

$

$

Net cash provided by operating activities

12,409,777

10,347,913

Net cash used in investing activities

(8,329,338)

(6.837,854)

Net cash used in financing activities

(4,260,151)

(97,924)

Miscellaneous

4,426

98,791

Net cash inflow/(outflow) during the quarter

(175,286)

3,510,926

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