Amerigo Resources Q3 2004 Net Earnings Increase by 82% to US$2,960,651 Operating Cash Flow is US$3,612,139
November 4, 2004
AMERIGO RESOURCES LTD. (Vancouver, British Columbia) reported results of the period ended September 30, 2004 today. Significant events are as follows:
Net earnings after tax for the three months ended September 30, 2004 were US$2,960,651, 82% higher from earnings reported in the preceding quarter. Earnings were higher due to higher copper prices at quarter end.
Earnings for the nine months to September 30, 2004 were US$8,362,291 or US$0.13 non-diluted. In the same period operating cash flow was US$9,478,737 and total production was 22.34 million pounds of copper.
Cash flow from operations in the three months ended September 30, 2004 was US$3,612,139, down from US$3,700,531 in the second quarter. See MD&A for details on calculation.
Cash costs before El Teniente royalty were higher at US$0.73 per pound in the third quarter compared to US$0.59 in the second quarter and US$0.64 in the first quarter of 2004. The cost increase is mainly due to higher power and steel prices and below-budget production, which result in higher costs per pound. Amerigo expects cash costs to improve significantly as it moves to achieve budgeted production of copper and molybdenum in 2005. Cash costs in the month of September were US$0.64.
Total costs after royalty, depreciation and accretion were US$0.92 per pound in the three months ended September 30, 2004. Actual total production costs are below budget due to below budget production.
Earnings per share were US$0.05 for the three months ended June 30, 2004. Cash flow per share was US$0.06 in the same period.
Cash balances have increased to US$8,106,233 at September 30, 2004.
Production under budget - Continued lower sulphide grade material from El Teniente contributed to production being below budget and practically at the same volume as in the second quarter. As of the second half of October, sulphide grade materials in tailings from El Teniente have normalized.
Recovery of tailings from Colihues in the third quarter was also below budget. MVC has been dissatisfied with the performance of the subcontractor for the Colihues tailings project and terminated their contract on October 31, 2004. MVC is confident that under a different arrangement involving pumps most suited for the process, performance will improve significantly. However, improvements before the first quarter of 2005 will be limited until new pumps are fully operational.
Molybdenum processing plant update - Engineering for the molybdenum processing plant has been finalized and the equipment has been ordered. Commissioning is expected in the first half of 2005.
Further production increases - Work continues on schedule for the next stage of expansion. In July 2004 MVC purchased 4 used mills with a capacity of 140% of the presently installed mills to accelerate the implementation of the expansion process. Negotiations with El Teniente are progressing with respect to an increase of tailings supply from Colihues beyond the present limit of 10,000 tpd. Until these negotiations are finalized, the precise nature of the next expansion is under review to accommodate potential increased Colihues feed.
The information in this news release should be read in conjunction with the Consolidated Financial Statements and Management Discussion and Analysis for the quarter ended September 30, 2004, available at the Company’s website at www.amerigoresources.com and at www.sedar.com.
Amerigo Resources Ltd. is a Canadian junior copper producing company forecasting 14,000 tonnes of copper production in 2004 from its MVC operations near Santiago, Chile. Tel: (604) 681-2802; Fax: (604) 682-2802; Web: www.amerigoresources.com; Listing: ARG:TSX
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 as that term is defined in 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.