Amerigo Reports at AGM
- Warrants Exercised
- Moly Production Higher
- Copper Production Lower
- New Chilean Copper Royalty Does Not Apply
AMERIGO RESOURCES LTD. (Vancouver, British Columbia) announced today that substantially all of its outstanding listed warrants were exercised prior to expiry on June 20, 2005, and proceeds were received for the $0.70 exercise price. The warrants were originally issued in June and July 2003 to finance the acquisition of Minera Valle Central, S.A. As a result, the Company has a net cash balance at a consolidated level of approximately US$14.5 million.
On June 22 the Company held its annual general meeting at which Dr. Klaus Zeitler, President of the Company, provided an update to shareholders with respect to the Company’s operations and specifically with reference to copper and molybdenum production.
Based on production experience to date, Dr. Zeitler indicated that copper production for 2005 is expected to be approximately 15% to 20% below the 18,000 tonnes projected at the beginning of the year, substantially as a result of underperformance of extraction equipment at the Colihues tailings dam. Management has initiated a new strategy for Colihues tailings extraction utilizing hydraulic monitors, with projected start-up in early 2006.
Dr. Zeitler also told the meeting that molybdenum production is expected to exceed by 20% the original estimate of 500,000 pounds in 2005. This increase is mainly due to substantially higher recovery rates than originally expected. At current copper and molybdenum prices, the financial advantage of the increased molybdenum production is likely to offset the deficit in copper production through the balance of 2005.
The economic performance of the newly commissioned molybdenum plant will be further enhanced by a tolling arrangement with the Chuquicamata division of Codelco, under which MVC will initially process 4,000 tonnes of molybdenum-copper bulk concentrate to produce a saleable molybdenum concentrate and copper concentrate. This material is expected to start arriving at MVC within the next few days and will be processed in Q3-2005. Based on current molybdenum prices and the tolling arrangement, the capital cost for the molybdenum plant will be repaid from less than 3 months of operating profit.
The Company also announced that it has been advised by its Chilean counsel that MVC’s operations will not be affected by new Chilean royalty legislation to be effective January 1, 2006. MVC is exempted from the royalty as it is not a “mine operator” as defined by the legislation.
Amerigo Resources Ltd. is a Canadian copper and molybdenum producing company forecasting 15,000 tonnes of copper production and 600,000 pounds of molybdenum in 2005 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:
Jeffrey Giesbrecht, Secretary
Amerigo Resources Ltd.
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.