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Amerigo reports earnings of US$4.6 million in Q1-2006

Earnings per share are US$0.0524 up from EPS of US$0.0237 in Q1-2005

Financing closed in March 2006 strengthens cash position to US$15.5 million

Purchase of strategic stake in Chariot Resources

Dividend of US$3.6M declared in the quarter

VANCOUVER, BRITISH COLUMBIA – May 4/CNW/Amerigo Resources Ltd. (TSX:ARG) (“Amerigo” or the “Company”) reported results for the quarter ended March 31, 2006 today.  Significant events are as follows:

  • for the quarter ended March 31, 2006 were US$4,606,768, 180% higher than earnings of US$1,644,722 in Q1-2005 due to stronger revenue from higher copper prices and from molybdenum sales and revenue pursuant to a tolling contract, both of which were nil in Q1-2005 and 11% lower than earnings of US$5,208,567 in Q4-2005 due primarily to lower molybdenum sales and lower tolling contract revenue partly offset by higher copper prices.
  • Earnings per share for the quarter ended March 31, 2006 were US$0.0524 non-diluted, compared to earnings per share of US$0.0237 in Q1-2005 and US$0.0604 in Q4-2005.
  • Cash flow from operations was US$4,085,418 in Q1-2006 compared to cash flow from operations of US$1,765,989 in Q1-2005.
  • Copper production in Q1-2006 was 6.75 million pounds, compared to 7.49 million pounds produced in Q1-2005 and 7.73 million pounds produced in Q4-2005. Copper production was lower than expected arising from a longer than anticipated annual maintenance shutdown at El Teniente, other plant shutdowns following a small fire and for the integration of new equipment and lower recoveries from Colihues. For Q2-2006 a previously announced production shortfall of approximately 500 tonnes of copper and 30,000 pounds of molybdenum is expected following a temporary plant shutdown.
  • Molybdenum production in Q1-2006 was 176,967 pounds, which is below projected production due to lower molybdenum content in the El Teniente tailings. In Q4-2005, molybdenum production was 245,950 pounds.
  • Cash costs (the aggregate of smelter, refinery and other charges, production costs net of molybdenum-related net benefits, administration and transportation costs) before El Teniente royalty were US$1.39/lb in Q1-2006, compared to cash costs of US$0.91/lb in Q1-2005 and US$0.67/lb in Q4-2005. The increase in cash costs from Q1-2005 is derived from lower production, which results in higher per unit costs, from higher smelter and refinery costs due to the effect of the copper price participation in these costs, and from higher production and maintenance costs overall, partly as a result of a stronger Chilean peso. The increase in cash costs from Q4-2005 results from reduced molybdenum by-product credits and net tolling benefits.
  • Total costs (the aggregate of cash costs, El Teniente royalty, depreciation and accretion) for the quarter ended March 31, 2006 were US$1.84/lb compared to US$1.14/lb in Q1-2005 and US$1.11/lb in Q4-2005. The increase from Q1-2005 is driven by higher cash costs and higher royalty payments to El Teniente from higher copper prices and the molybdenum royalty; the increase from Q4-2005 is driven mostly from cash costs.
  • On March 17, 2006 the Company closed a financing for net proceeds of US$14.6M.
  • Capital plant expenditures for the final stages of the mill expansion project and for equipment for the extraction of tailings from Colihues was US$6.8M in Q1-2006 and were funded from cash flow from operations.
  • Cash balance was US$15.5M at March 31, 2006 after $6.8M of capital expenditures and a strategic investment in Chariot Resources Ltd. of US$10.3M.
  • Dividend – On February 16, 2006 the Board of Directors of Amerigo declared a dividend of Cdn 4.5 cents per share payable on April 7, 2006 to shareholders of record as of March 31, 2006. 

The information in this news release and the Selected Financial Information contained in the following page should be read in conjunction with the Consolidated Financial Statements and Management Discussion and Analysis for the year ended December 31, 2005, which will be available at the Company’s website at and at

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:; Listing: ARG:TSX

For further information, please contact:    

Michael J. Kuta, General Counsel & 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 within the meaning of 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.  Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made.  The Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change.

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