Clarification Regarding Use of Production Estimates from Colihues
March 7, 2006
VANCOUVER, BRITISH COLUMBIA – March 7/CNW/Amerigo Resources Ltd. (TSX:ARG) ("Amerigo" or the "Company") has been engaged in discussions with the British Columbia Securities Commission in connection with Amerigo’s short form prospectus filing relating to an underwritten financing announced on February 21, 2006. These discussions relate to Amerigo’s prior disclosure of estimated copper production from the processing of tailings from the Colihues tailings impoundment and the estimated cost of such production (the "Colihues Estimates"). Over the past two years, the Colihues tailings impoundment, located approximately one kilometre south of the Minera Valle Central ("MVC") plant, and having a surface area of approximately 368 hectares, has been the source of less than 4,000 tonnes per day (tpd) of tailings, representing less than 3% of the total tailings processed daily at MVC. Amerigo has the right to extract up to 45,000 tpd of feed material from the Colihues impoundment.
The tailings in the Colihues impoundment were produced from the El Teniente mine between 1977 and 1987, and the estimates of tonnage and grade in the Colihues impoundment from which the Colihues Estimates were derived were provided to MVC in January, 2001 by Corporacion Nacional del Cobre de Chile ("Codelco"), the operator of the El Teniente mine and one of the largest copper producers in the world. Codelco’s estimates of tonnage and grade in Colihues are historical estimates and do not constitute a National Instrument 43-101 compliant mineral resource calculated to CIM definition standards. The copper grades obtained from the processing of the Colihues tailings over the past two years have been consistent with the estimates of grade supplied by Codelco, and therefore Amerigo considers the Codelco data to be relevant and reliable. However, a qualified person has not done sufficient work to classify the historical estimates or the Colihues Estimates as current mineral resources or mineral reserves. Amerigo is not treating the historical estimates or the Colihues Estimates as current mineral resources or mineral reserves as defined in National Instrument 43-101 and therefore such historical estimates and Colihues Estimates should not be relied upon.
Amerigo has retained Roger Moss, Ph.D, P.Geo, a "qualified person" under National Instrument 43-101, to review the historical estimates regarding Colihues and to determine if such estimates can be classified as current mineral resources under National Instrument 43-101. The results of Dr. Moss’ work, as well as a description of the current production facilities at MVC, will be contained in a technical report to be prepared jointly by Dr. Moss and Anthony R. Maycock, P.Eng., the latter of Amec International (Chile) S.A. and the author of the technical report dated May, 2003 and entitled "Technical Review of Operations of Mineral Valle Central".
This news release has been reviewed by Roger Moss, Ph.D, P.Geo.
Amerigo is a Canadian copper and molybdenum producing company with operations near Santiago, Chile. Tel.: (604) 681-2802; Fax: (604) 682-2802; Web: www.amerigoresources.com; 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 forwarding-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.