Amerigo Reports Net Earnings of US$3,776,182 up 271% against prior 3-month quarter
AMERIGO RESOURCES LTD. (Vancouver, British Columbia) reported results of the three-month quarter ended March 31, 2004 today. Significant events are as follows:
• Net earnings after tax for the three months ended March 31, 2004 were US$3,776,182, up 271% from earnings of US$1,017,089 in the quarter ended November 30, 2003 (which is the prior full three-month quarter). The increase in earnings primarily results from higher copper prices.
• MVC’s cashflow from operations for the 3 months ended March 31, 2004 was US$4,974,058.
• Earnings per share were US6c for the three months ended March 31, 2004.
• In the first three months of 2004 Amerigo sold 6.61 million pounds of copper for a cash cost before Codelco royalty of US 64c per pound, and a total cost after royalty, depreciation and asset retirement accretion cost of US 80c per pound. Production costs were higher than normal due to plant interruptions in connection with commissioning of MVC’s expansion project as well as scheduled and unscheduled maintenance at El Teniente.
• Copper price has increased by 76% from $0.776 (July 2003 average) to $1.365 (March 2004 average) since the acquisition of MVC. Strong operating cashflows during the period have funded capital expansion plans and have fully repaid the Enami loans: the original US$2,471,124 loan amount was repaid in March 2004.
• Production expansion plans are on track. Phase 1, the installation and commissioning of additional classification and flotation equipment, was completed on time and under budget on April 7, 2004, which will allow for budgeted 2004 production of 16,000 tonnes of refined copper.
• Further production increases – Planning is well underway for Stage 2 of the expansion which will increase copper production further in 2005 to an annual level of approximately 20,000 tonnes. Both stages of expansion position Amerigo well to take advantage of current higher prices due to strong demand from China and improving economies in other parts of Asia, the US, and Europe.
This Stage 2 production increase will be generated from the higher rate of extraction from the Colihues tailings project from the present 2,000 tonnes of plant feed per day trial operation to a fully commercial rate of 10,000 tonnes per day. Further studies to examine the potential to increase production from Colihues beyond this rate are being conducted.
• New accounting pronouncements – On January 1, 2004, Amerigo adopted three new accounting pronouncements: to account for changes in prices of copper during the settlement period; to measure and record an asset retirement obligation for MVC that will be accreted over time and to expense stock options issued to employees and directors.
Please click here to view the complete financial statements in PDF format
Amerigo Resources Ltd. is a Canadian junior copper producing company forecasting 16,000 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
For further information, please contact:
Jeffrey Giesbrecht, Secretary
Amerigo Resources Ltd. (604) 697-6201
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.