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Amerigo reports earnings of US$11 million in 2004 up from US$1.5 million in 2003
02.18.2005
Production increases to 31 million pounds in 2004
Molybdenum plant to be completed ahead of schedule
New agreement targets future annual production above 65 million pounds of copper
AMERIGO RESOURCES LTD. (Vancouver, British Columbia) reported results of the year ended December 31, 2004 today. Significant events are as follows:
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Net earnings after tax for the year ended December 31, 2004 were US$10,941,198, 707% higher from earnings of $1,546,502 in the ten months ended December 31, 2003. Earnings were higher due to higher copper prices and increased production.
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Earnings per share for the year ended December 31, 2004 were US$0.17 non-diluted. In the same period cash flow from operations was US$14,029,775.
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31.12 million pounds of copper were produced in 2004, compared to 14.36 million pounds of copper produced in the period July to December 2003 after MVC was acquired.
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Cash costs before El Teniente royalty were higher at US$0.69 per pound in 2004 compared to US$0.57 in fiscal 2003. The cost increase is mainly due to higher power and steel prices and below-budget production, which result in higher costs per pound. Amerigo expects cash costs to improve as copper production increases.
Total costs after royalty, depreciation and accretion were US$0.88 per pound in the year ended December 31, 2004 compared to US$0.63 in fiscal 2003. The increase is mainly due to higher royalty payments at higher copper prices. -
Earnings per share were US$0.04 for the three months ended December 31, 2004. Cash flow per share was US$0.07 in the same period.
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Cash balances increased to US$8,239,089 at December 31, 2004 after capital expenditures of US$4,837,277 in Q4.
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Production under budget - Lower sulphide grade material from El Teniente during Q2 and Q3 contributed to production being below budget in 2004.
Recovery of tailings from Colihues was also below budget in the year. MVC started to selfoperate the Colihues extraction pond in Q4 following unsatisfactory performance by the subcontractor. Significant improvements are expected following the commissioning of new extraction equipment in Q1 2005. -
New agreement for increased Colihues extraction – During the year MVC entered into an agreement in principle with El Teniente to increase the rate of agreed extraction of feed material from the Colihues deposition site from the present 10,000 tonnes per day to 45,000 tonnes per day. Through 2005 and 2006 the Company expects to ramp up annual production capacity to approximately 65 million pounds of copper. The Company is working with El Teniente to finalize a detailed agreement in the next few months.
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Molybdenum plant commissioning ahead of schedule - Construction for the molybdenum plant is scheduled for completion in February 2005, approximately 3 months ahead of schedule. Commissioning is expected to occur in March 2005. Production in excess of 500,000 pounds of molybdenum in concentrates is anticipated for 2005, with an increase to 800,000 to 1,000,000 pounds in 2006. A 3-year sales agreement will be signed on February 22, 2005 with Molymet for a base treatment charge plus a price participation factor. A flat 10% royalty to Codelco will also be paid on MVC’s net revenue received from the sale of molybdenum concentrates.
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Warrants exercised – Subsequent to December 31, 2004 and up to the date of this release, 4,273,000 of the Company’s stock purchase warrants were exercised for proceeds of C$2,934,200, strengthening Amerigo’s ability to fund ongoing capital expenditures. The warrants had exercise prices ranging from C$0.25 to C$0.70.
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, 2004, which will be available at the Company’s website at www.amerigoresources.com and at www.sedar.com.
Amerigo Resources Ltd. is a Canadian junior copper and molybdenum producing company forecasting 18,000 tonnes of copper production 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.
(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 as that term is defined in 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.
