Amerigo Announces Additional Short Term Copper Hedging Program
October 23, 2009
VANCOUVER, BRITISH COLUMBIA â€" October 23/Amerigo Resources Ltd. (TSX:ARG) (â€śAmerigoâ€ť or the â€śCompanyâ€ť) announced that its fully owned subsidiary, Minera Valle Central (â€śMVCâ€ť), has extended its hedging facility with MVCâ€™s concentrate purchaser, Empresa Nacional de Minerίa (Enami), a Chilean state owned company, at higher prices through a zero cost minimum/maximum pricing structure. MVC has secured a minimum price of US$2.60 per pound for 800 tonnes per month of copper production for the months from December 2009 to May 2010, inclusive, representing approximately 45% of MVCâ€™s forecast copper production over that period. The facility sets a maximum price of US$3.20 per pound on this production. If the LME copper price trades between US$2.60 and US$3.20 per pound, MVC will receive the LME monthly average copper price for copper delivered under this facility. The facility includes standard provisions for a facility of this nature, including the potential requirement to provide to Enami additional guarantees subject to increases in the copper price.
Dr. Klaus Zeitler, President, stated "Although we are bullish on the copper price in the longer term, we believe that near term hedging is prudent risk management at this point in order to secure our short term cash requirements for servicing and repaying the debt the Company incurred as a result of the global financial crisis. As was the case with the first hedging facility, we maintain full upside potential on greater than 50% of our production that remains unhedged."
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:
Dr. Klaus Zeitler, President (604) 681-2802
Amerigo Resources Ltd. (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. This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Such risks and uncertainties are detailed in the Companyâ€™s filings with the TSX and on SEDAR. Factors that could cause actual results to differ materially from those in forward-looking statements include capital market conditions, commodities market prices, exploitation and exploration successes, lack of continuity of mineralization, continued availability of capital and financing, and general economic, market or business conditions. The Company undertakes no obligation to update these forward-looking statements if managementâ€™s beliefs, estimates or opinions, or other factors, should change.