Amerigo Resources Ltd. Reports Operating Profit up 88% on Q2-2003 to US$1,164,960
AMERIGO RESOURCES LTD. (Vancouver, British Columbia) reported its third quarter results today. Highlights are as follows:
- Net Earnings after tax for the third quarter were US$1,017,089 up from earnings of US$47,921 in the previous corresponding quarter.
- Amerigo acquired the Chilean MVC copper project on July 3, 2003. As Amerigo has a February year-end, the third quarter is the period September 1 to November 30, 2003. Accordingly this report includes the first full quarter of Operating results from MVC
- Amerigo produced and sold 7.13 million pounds of Copper in the quarter, for a cash cost before El Teniente royalty of 57.5c per pound, and a total cost after royalty and depreciation of 63.9c per pound.
- The average copper price received during the quarter was 86.6c per pound.
- Copper production for the quarter represents an annualized rate of approximately 13,000 tonnes, up 18% on production rates prior to Amerigo’s acquisition.
- Operating cashflow from MVC for the quarter ended November 30 was US$1,331,429, up 73% on Q2-2003.
- Earnings per share were US1.77c (2.30c Canadian) for the quarter and US4.20c (5.46c Canadian) for the year to date.
- US Dollar Reporting and Year-end Change - due to the change in the Amerigo asset base, all financial reports are expressed in US dollars. Amerigo has received regulatory approval to change to a December 31 year-end effective December 31, 2003.
- Warrant Listing - On December 18, 2003, certain warrants issued by Amerigo in June and July 2003 began trading on the TSX Venture Exchange under the symbol ARG.WT. Each warrant is exercisable into a common share of Amerigo until June 20, 2005 at an exercise price of CDN$0.70.
- Production expansion plans remain on track with the installation and commissioning of the additional classification and flotation equipment in the first quarter of 2004 and a budgeted production rate for 2004 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. Preliminary indications are that this stage will also require less investment than originally budgeted. 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 2000 tonnes of plant feed per day trial operation to a fully commercial rate of 10,000 tonnes per day. Further studies are planned for 2004 to examine the potential to increase production from Colihues beyond this rate.
- New business – Amerigo is in discussions with several parties regarding acquisition opportunities in both sulphide and oxide copper projects within Chile. Chile is the world’s largest copper producer, and for several years this region has been short of capital to develop projects which typically are not large enough to capture the attention of the world’s major copper producers. Amerigo believes it can participate in such opportunities provided they offer similar potential for rates of return to the Company’s MVC acquisition.
- Disposition of Canadian Exploration Properties – Amerigo has entered into an agreement to sell its Canadian exploration properties to Nikos Explorations Ltd. (NIK-TSX-V) for 5,000,000 shares of Nikos, and the requirement to issue an additional 5,000,000 shares to Amerigo if Nikos holds any interest in the properties after June 2005. The transaction is subject to stock exchange approval. The sale will enable Amerigo to focus on its Chilean copper production at Minera Valle Central, while maintaining an interest in the upside in the Coppercorp, Island Copper
and Bellevue properties.
Complete financial statements may be found with the Company’s filings on SEDAR.
Amerigo Resources Ltd. is a Canadian junior copper production company currently producing approximately 13,000 tonnes of copper per annum from its MVC operations near Santiago, Chile.
Tel: (604) 681-2802; Fax: (604) 682-2802; Web:
For further information, please contact:
Jeffrey Giesbrecht, Secretary
Amerigo Resources Ltd. (604) 697-6201
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.