Amerigo Resources Molybdenum Plant Ahead of Schedule
January 28, 2005
AMERIGO RESOURCES LTD. (Vancouver, British Columbia) announced today that construction of its molybdenum concentrate plant is ahead of schedule. The concentrate plant will extract molybdenum from copper concentrate already being produced by Amerigo’s subsidiary Minera Valle Central at its plant near Santiago, Chile. MVC is a copper producing company with a long-term contract to process tailings from Codelco’s El Teniente copper mine.
Construction of the molybdenum plant is now scheduled for completion next month, approximately 3 months ahead of schedule. Commissioning of the plant is expected to occur in March 2005 followed by a period whereby concentrate grade and specifications will be optimized. MVC estimates production in excess of 500,000 pounds of molybdenum in concentrates in 2005, and expects to increase molybdenum production to approximately 800,000 to 1,000,000 pounds in 2006.
A sales agreement has been reached with Molybdenos y Metales S.A. (known as “Molymet”), the world's largest molybdenum producer with a conversion facility only 75 km from the MVC plant. The agreement has an initial period of 3 years with a base treatment charge plus a price participation factor. MVC will also pay Codelco a flat 10% royalty on molybdenum production.
Demand for molybdenum, or “moly”, is booming in part because of demand from China. Molybdenum is generally found as a by-product of copper and is used in steel alloys, particularly stainless steel. Recent prices for molybdenum oxide have exceeded US$34 per pound, as compared to an average price for 2004 of about US$15 per pound and a five-year average of about US$4.20 per pound.
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.
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.