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Amerigo acquires option on Chilean copper producer

Amerigo Resources Ltd. reported today that it has acquired an option to purchase a copper production facility located near Santiago, Chile.

Amerigo has acquired an option (the 'Option') to purchase approximately 95% of the outstanding shares and debt of Minera Valle Central S.A. (MVC). Amerigo intends to acquire 100%, and negotiations are ongoing with one remaining holder for the acquisition of the balance of the shares and shareholder loans. MVC, a private Chilean company, has a contract with Chile's state owned copper producer Codelco through 2021 to process tailings from the El Teniente mine. Under the contract, the tailings from the El Teniente concentrator are supplied to MVC under a schedule. MVC's plant has operated since 1992, and produced approximately 35,000 tonnes of copper concentrate and 10,000 tonnes of copper during calendar 2002. The MVC plant currently processes approximately 90,000 tonnes of tailings per day.

El Teniente has produced copper since the beginning of the last century and at present is one of the largest copper producing mines in the world with production of approx. 350,000 tonnes of copper metal per year and an expansion program under way to increase production to 420,000 tonnes. Ore reserves and resources are sufficient for several decades production at this expanded rate.

MVC also has the contractual right to augment the supply of tailings by 10,000 tonnes per day with material from one of the former tailings deposition sites for the El Teniente operations. This tailings pond, known as the Collihues dam, is located immediately adjacent to the MVC facilities. These tailings are proposed to be recovered by a dredge process and pumped to the MVC plant by pipeline. This would result in a significant increase in the production of MVC.

In addition, Codelco is undertaking an expansion of the El Teniente facilities which is expected to be completed in September, 2003. This expansion will increase the fresh tailings supply from 90,000 to approximately 120,000 tonnes per day.

Should Amerigo be successful in the acquisition of MVC, it plans to re-optimize the flowsheet of the MVC plant, and may invest in additional processing equipment with the objective of increasing recovery of copper from these two additional sources.

The Option has been assigned to Amerigo by Steven G. Dean and Klaus Zeitler, both of West Vancouver, British Columbia and both of whom will join the board of Amerigo. Mr. Dean was President and a Director of Teck Cominco Limited until July 2002, and previously was Founder and Chief Executive Officer of PacMin Mining Corporation Limited. Dr. Zeitler was Senior Vice President of Teck Cominco Limited from 1997 until 2002, and previously was on the Board of Directors of Teck Corp. from 1981 to 1997 and Cominco Limited from 1986 to 1996. Mr. Dean and Dr. Zeitler are at arm's length to Amerigo.

The Option to purchase MVC may be exercised by Amerigo until June 30, 2003 by payment of approximately US$16,600,000, representing the amount of shareholder loans owed by MVC. The balance of the purchase price (US$3,400,000, for a total purchase of US$20,000,000) will be paid in cash or shares of Amerigo in three years if the average price of copper is over US$0.82 per pound during the period, or in five years if the average price of copper is under US$0.82 per pound. The payment of cash or shares is at the option of Amerigo, and will be made at the then 30 day average trading price of Amerigo if made in shares. As consideration for the assignment of the Option to Amerigo, upon exercise of the Option by Amerigo, Mr. Dean and Dr. Zeitler will receive at their election, either a total of 7,500,000 shares of Amerigo at a deemed price of CDN$0.20, or a royalty on production of MVC, being US$0.01 per pound if the copper price is below US$0.80 per pound, and US$0.015 per pound if the copper price is above US$0.80 per pound.

The shares and shareholder loans of MVC will be acquired from seven shareholders, of which six are Chilean private investors and of which one shareholder, holding 51% of the shares of MVC, is a Chilean construction conglomerate. All existing shareholders of MVC are at arm's length to Amerigo and to Mr. Dean and Dr. Zeitler.

The exercise of the Option will be financed by a proposed equity financing. This equity financing will be of a size sufficient to finance the acquisition, upgrades to the plant, and to refinance approximately US$3,000,000 in debt of MVC and is to be undertaken once Amerigo has completed due diligence on MVC. In the short term, in order to finance ongoing due diligence costs, Amerigo is completing a private placement financing in the amount of CDN$250,000, consisting of units at CDN$0.16 each. Each unit will consist of one common share of Amerigo and one-half of one warrant, with each full warrant entitling the holder to purchase an additional common share for two years at CDN$0.32. The shares and warrants will be subject to a four-month hold period from the date of issue. This financing will be a 'part and parcel'financing under the rules of the TSX Venture Exchange. A finder's fee may be payable.

Amerigo is pleased with the addition of Steven Dean and Klaus Zeitler to the board of directors as well as the Option on the copper production facility. If and when the Option is exercised, the project will provide Amerigo with excellent cash flow to continue exploration for Olympic Dam style deposits on their Ontario properties.

Completion of the transaction is subject to a number of conditions including, but not limited to, TSX Venture Exchange acceptance and completion by Mr. Dean and Dr. Zeitler of their due diligence review of Amerigo. There can be no assurance that the transaction will be completed as proposed or at all.

Amerigo Resources Ltd. is a Canadian junior exploration company with properties in Ontario and Quebec. Amerigo is currently exploring for Olympic Dam style copper-gold deposits on four properties in the Sault Ste. Marie area of Ontario. Please refer to Amerigo's previous news releases regarding exploration on these properties.

For further information, please contact:

Roger Moss, President, Tel: (416) 516-6050 E-Mail:

Ian E. Gallie, Director, Tel: (250) 598-9091 E-Mail:

or visit our website at:

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.