Amerigo Reports 2024 Operational Results & Provides 2025 Guidance

Rhea-AI Summary

Amerigo Resources reported strong 2024 operational results, with copper production reaching 64.6 million pounds, exceeding guidance by 4%. The company achieved a record 65.0 million pounds of copper deliveries and 1.3 million pounds of molybdenum production, 8% above guidance.

The company's cash cost was $1.89 per pound in 2024, significantly better than guidance, with a normalized cash cost of $1.87 per pound. The average copper price in 2024 was $4.15 per pound. The company ended 2024 with a cash position of $35.9 million and outstanding bank debt of $11.5 million.

For 2025, Amerigo projects copper production of 62.9 million pounds and expects to be debt-free by year-end. The company's normalized cash cost is expected to be $1.93 per pound under assumed copper price of $4.15 per pound. Since September 2021, Amerigo has returned $78.1 million to shareholders through dividends and share buybacks.

Positive

• Copper production exceeded guidance by 4% reaching 64.6M pounds
• Cash cost reduced to $1.89/lb from $2.17/lb in 2023
• Strong cash position of $35.9M as of December 31, 2024
• Returned $21.2M to shareholders in 2024 through dividends and buybacks
• Plans to be debt-free by end of 2025

Negative

• 2025 copper production guidance of 62.9M pounds shows decrease from 2024
• Projected increase in normalized cash cost to $1.93/lb for 2025
• Higher expected costs for energy, environmental compliance, and operations in 2025

2024 Copper Production of 64.6 million pounds, Outperforming Guidance

2024 Cash Cost¹ $1.89 per pound, Outperforming Guidance

2025 Guidance Sees Amerigo Debt-Free by Year-end

VANCOUVER, British Columbia, Jan. 14, 2025 (GLOBE NEWSWIRE) -- Amerigo Resources Ltd. (TSX: ARG; OTCQX: ARREF) (“Amerigo” or the “Company”) is pleased to announce 2024 production results from Minera Valle Central (“MVC”), the Company’s 100% owned operation located near Rancagua, Chile. Dollar amounts in this news release are in U.S. dollars (“USD”) unless indicated otherwise.

Amerigo is pleased to report very strong 2024 production and cash cost¹ results at MVC, significantly beating production and cost guidance. Copper production was 64.6 million pounds, with a Company record of 65.0 million pounds of copper deliveries. Molybdenum production and sales were 1.3 million pounds, also significantly exceeding guidance.

“The operational team at MVC achieved a cash cost¹ of $1.89 per pound and a normalized cash cost¹ of $1.87 per pound, and there were no environmental incidents or lost time accidents in 2024. In addition to MVC’s operational excellence, MVC’s safety record is also world-class, with its employees having recorded no lost time accidents in over 2 years,” said Aurora Davidson, Amerigo’s President and CEO.

“For the fifth year in a row, we are also providing increased annual copper production guidance. This year, we expect to continue achieving solid and consistent results, and we will continue to optimize our operations with fiscal responsibility. Our return of capital strategy is fully deployed with the opportunity to use quarterly dividends, performance dividends, and share buybacks to return surplus cash to shareholders. In 2025, we also plan to repay MVC’s minimal outstanding debt fully, finishing 2025 debt-free,” she added.

In 2024, MVC produced 64.6 million pounds (“M lbs”) of copper (2023: 57.6 M lbs), 4% over the Company’s annual production guidance of 62.4 M lbs.

Amerigo produced 1.3 M lbs of molybdenum in 2024 (2023: 1.2 M lbs), 8% over the Company’s guidance of 1.2 M lbs.

Amerigo’s average annual copper price in 2024 was $4.15 per pound (“/lb”) (2023: $3.86/lb).

The Company’s 2024 cash cost¹ was $1.89/lb (2023: $2.17/lb), and 2024 normalized cash cost¹ was $1.87/lb, compared to guidance of $2.08/lb.

In Q4-2024, MVC produced 18.3 M lbs of copper at a cash cost¹ of $1.73/lb. Amerigo’s quarterly copper price was $4.06/lb in Q4-2024, compared to $4.22/lb in Q3-2024.

In 2024, the Company incurred $8.7 million in capital expenditures on projects (“Capex”) (2023: $14.3 million) and $3.5 million on sustaining Capex associated with the annual plant maintenance shutdown and strategic spares (2023: $3.7 million).

The Company repaid $9.8 million in debt (2023: $7.1 million in debt and lease repayments) and returned $21.2 million to shareholders through dividends and share buybacks (2023: $17.3 million).

On December 31, 2024, Amerigo’s cash position was $35.9 million ($10.8 million higher than September 30, 2024), and restricted cash was $4.4 million ($2.3 million lower than September 30, 2024). Outstanding bank debt was $11.5 million (a decrease of $4.0 million from September 30, 2024).

	2024	Q4-2024	Q3-2024	Q2-2024	Q1-2024
Fresh tailings
Tonnes per day	123,525	134,545	129,339	111,636	116,246
Operating days	356	91	92	82	90
Million tonnes processed	43.94	12.28	11.90	9.25	10.51
Copper grade	0.182%	0.182%	0.184%	0.184%	0.177%
Copper recovery	23.7%	25.9%	23.6%	23.6%	20.8%
Copper produced (M lbs)	41.69	12.78	11.38	8.98	8.55
Historic tailings
Tonnes per day	39,953	32,930	32,815	45,469	49,289
Operating days	332	92	88	62	90
Million tonnes processed	13.25	3.01	2.90	2.91	4.42
Copper grade	0.245%	0.241%	0.239%	0.245%	0.251%
Copper recovery	32.0%	34.6%	32.1%	31.3%	30.5%
Copper produced (M lbs)	22.87	5.53	4.89	5.00	7.45
Copper produced (M lbs)	64.56	18.31	16.27	13.98	16.00
Copper delivered (M lbs)	65.00	18.23	16.48	14.33	15.96
Cash cost1 ($/lb)	1.89	1.73	1.93	1.96	1.96
Normalized cash cost1 ($/lb)	1.87	1.73	1.93	1.96	1.89
Molybdenum produced (M lbs)	1.29	0.33	0.33	0.30	0.32
Molybdenum sold (M lbs)	1.29	0.33	0.33	0.30	0.32

2025 Guidance

In 2025, Amerigo expects to produce 62.9 M lbs of copper and 1.3 M lbs of molybdenum, marking the fifth year of increased production guidance.

The annual plant maintenance shutdown at MVC is scheduled for Q1-2025. The maintenance shutdown's lower production expected in Q1-2025 is factored into the annual production guidance.

In 2024, the London Metal Exchange average copper price was $4.15/lb, the average Platts molybdenum dealer oxide price was $20.89/lb, and the average exchange rate of the Chilean peso to the U.S. dollar was $944. While market consensus continues to support rising copper prices due to concentrate supply deficits in 2025, Amerigo has again taken a conservative approach to selecting economic assumptions for its annual budget, including an average market price of $4.15/lb for copper, $21/lb for molybdenum and an exchange rate of 940 Chilean pesos (“CLP”) to USD 1 (collectively, the “Assumptions”).

Under the Assumptions, Amerigo’s 2025 normalized cash cost¹ is expected to be $1.93/lb. Compared to 2024, Amerigo’s cash cost¹ is projected to benefit from approximately $0.16/lb in lower treatment and refinery charges. However, as a result of lower 2025 production guidance compared to 2024 actual production, other cash cost¹ components are expected to increase by $0.05/lb, and we expect higher energy pass-through charges to Chilean industrial consumers ($0.04/lb), lower price positive settlement adjustments to molybdenum credits ($0.03/lb), higher steel, reagent and input costs ($0.02/lb), inflationary adjustments to service contracts ($0.02/lb), higher projected environmental compliance costs ($0.02/lb) and higher projected historical tailings extraction costs ($0.02/lb).

Our normalized cash cost¹ guidance excludes the signing bonus associated with a 3-year collective labour agreement with MVC’s operators' union, which signing bonus will be negotiated and paid in Q4-2025.

Using a $4.15/lb copper price, the royalty to Codelco’s El Teniente Division (“DET”) in 2025 would be $1.24/lb. The DET royalty is calculated on a sliding scale based on copper prices. A $0.20/lb increase in copper price would have a $0.09/lb impact on the DET royalty.

A $2/lb change in molybdenum price would impact cash cost¹ by $0.03/lb, and a 10% change in the CLP to USD foreign exchange rate would impact cash cost¹ by $0.09/lb.

Projected 2025 EBITDA¹ under the Assumptions is expected to be $66.7 million (excluding the effect of 2024 settlement adjustments). Each $0.10/lb increase in copper price up to $4.80/lb would increase EBITDA¹ by approximately $3.0 million.

In 2025, MVC is expected to incur $8.8 million in capital expenditures on projects (“Capex”) and $4.2 million on capitalizable maintenance and strategic spares. Four process optimization projects worth $4.4 million are included in Capex.

Concerning financial obligations, MVC will repay the $1.0 million due on its working capital line of credit by October 2025 and will make two scheduled semi-annual bank debt repayments of $3.5 million plus interest in June and December 2025. Based on the guidance above, MVC plans to pre-pay the remaining $3.5 million due on its bank debt in December 2025 and end the year debt-free. This will be a significant milestone for MVC and Amerigo, adding at least $7.5 million annually in cash available to shareholders starting in 2026.

Capital Return Strategy

Since implementing its Capital Return Strategy (the “Strategy”) in September 2021, Amerigo has returned a total of $78.1 million to shareholders, $52.6 million through quarterly and performance dividends and $25.5 million through share buybacks, reducing by 11.9% the number of common shares outstanding at the inception of the Strategy.

Amerigo’s Strategy consists of three mechanisms: quarterly dividends, performance dividends, and share buybacks. These mechanisms ideally provide shareholders with a consistent return on invested capital and quickly transfer the benefits of rising copper prices to Amerigo’s shareholders.

Release of 2024 financial results on February 26, 2025

Amerigo will release 2024 financial results at the market open on Wednesday, February 26, 2025.

Investor conference call on February 27, 2025

Amerigo’s quarterly investor conference call will be held on Thursday, February 27, 2025, at 11:00 a.m. Pacific Standard Time/2:00 p.m. Eastern Standard Time.

Participants can join by visiting https://emportal.ink/3NOSCpK and entering their name and phone number. The conference system will then call the participants and place them instantly into the call.

Alternatively, participants can dial directly to be entered into the call by an Operator. Dial 1-888-510-2154 (Toll-Free North America) and state they wish to participate in the Amerigo Resources 2024 Earnings Call.

Interactive Analyst Center

Amerigo’s published financial and operational information is available for Excel download through Virtua’s Interactive Analyst Center (“IAC”). You can access the IAC by visiting www.amerigoresources.com under Investors > Interactive Analyst Center.

About Amerigo and MVC

Amerigo is an innovative copper producer with a long-term relationship with Corporación Nacional del Cobre de Chile (“Codelco”), the world’s largest copper producer.

Amerigo produces copper concentrate and molybdenum concentrate as a by-product at the MVC operation in Chile by processing fresh and historic tailings from Codelco’s El Teniente mine, the world's largest underground copper mine. Tel: (604) 681-2802; Web: www.amerigoresources.com; Listing: ARG: TSX.

Contact Information

Aurora Davidson President and CEO (604) 697-6207 ad@amerigoresources.com	Graham Farrell Investor Relations (416) 842-9003 Graham@northstarir.ca

¹ Non-IFRS Measures

This news release references three non-IFRS measures: cash cost, normalized cash cost and EBITDA.

These non-IFRS performance measures are included in this news release because they provide key performance measures used by management to monitor operating performance, assess corporate performance, and plan and assess the overall effectiveness and efficiency of Amerigo’s operations. These performance measures are not standardized financial measures under International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”), and, therefore, amounts presented may not be comparable to similar financial measures disclosed by other companies. These performance measures should not be considered in isolation as a substitute for performance measures in accordance with IFRS Accounting Standards.

Cash cost is a performance measure commonly used in the mining industry that is not defined under IFRS. Cash cost is the aggregate of smelting and refining charges, tolling/production costs net of inventory adjustments and administration costs, net of by-product credits. Cash cost per pound produced is based on pounds of copper produced and is calculated by dividing cash cost by the number of pounds of copper produced.

Normalized cash cost excludes the cost per pound paid to MVC’s workers as signing bonuses of 3-year collective labour agreements. In 2024, normalized cash cost excluded $0.02/lb paid to MVC’s supervisors for this concept.

EBITDA refers to earnings before interest, taxes, depreciation and administration and is calculated by adding depreciation expense to the Company’s gross profit.

The Company reconciles these performance measures against IFRS measures every quarter when financial results are reported. Reconciliations are included in the Company’s quarterly earnings release and Management’s Discussion and Analysis.

Cautionary Note Regarding Forward-Looking Information

This news release contains certain “forward-looking information” as such term is defined under applicable securities laws (collectively called "forward-looking statements"). This information relates to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "should", "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning:

• forecasted production, operating costs and Capex expenditures for 2025;
• our strategies and objectives;
• our estimates of the availability and quantity of tailings and the quality of our mine plan estimates;
• prices and price volatility for copper, molybdenum and other commodities and materials we use in our operations;
• our estimate as to projected EBITDA for 2025;
• our estimate as to the amount of the royalty to be payable to DET in 2025;
• the demand for and supply of copper, molybdenum and other commodities and materials that we produce, sell and use;
• sensitivity of our financial results and share price to changes in commodity prices;
• our financial resources and financial condition and our expected ability to redeploy other tools of our Strategy;
• our expectation to be debt-free as of the end of 2025;
• the expected negation and payment of signing bonuses to MVC’s operators;
• interest and other expenses;
• domestic and foreign laws affecting our operations;
• our tax position and the tax rates applicable to us;
• our ability to comply with our loan covenants;
• the production capacity of our operations, our planned production levels and future production;
• potential impact of production and transportation disruptions;
• hazards inherent in the mining industry causing personal injury or loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage, claims by third parties and suspension of operations
• estimates of asset retirement obligations and other costs related to environmental protection;
• our future capital and production costs, including the costs and potential impact of complying with existing and proposed environmental laws and regulations in the operation and closure of our operations;
• repudiation, nullification, modification or renegotiation of contracts;
• our financial and operating objectives;
• our environmental, health and safety initiatives;
• the outcome of legal proceedings and other disputes in which we may be involved;
• the outcome of negotiations concerning metal sales, treatment charges and royalties;
• disruptions to the Company's information technology systems, including those related to cybersecurity;
• our dividend policy; and
• general business and economic conditions, including, but not limited to, our assessment of strong market fundamentals supporting copper prices.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such statements. Inherent in forward-looking statements are risks and uncertainties beyond our ability to predict or control, including risks that may affect our operating or capital plans; risks generally encountered in the operation, permitting and development of mineral projects such as unusual or unexpected geological formations, negotiations with government and other third parties, unanticipated metallurgical difficulties, delays associated with permits, approvals and permit appeals, ground control problems, adverse weather conditions (including, but not limited, to heavy rains), process upsets and equipment malfunctions; risks associated with labour disturbances and availability of skilled labour and management; risks related to the potential impact of global or national health concerns; government or regulatory actions or inactions; fluctuations in the market prices of our principal commodities, which are cyclical and subject to substantial price fluctuations; risks created through competition for mining projects and properties; risks associated with lack of access to markets; risks associated with availability of and our ability to obtain both tailings DET current production and historic tailings from tailings deposit; the availability of and ability of the Company to obtain adequate funding on reasonable terms for expansions and acquisitions; mine plan estimates; risks posed by fluctuations in exchange rates and interest rates, as well as general economic conditions; risks associated with environmental compliance and changes in environmental legislation and regulation; risks associated with our dependence on third parties for the provision of critical services; risks associated with non-performance by contractual counterparties; risks associated with supply chain disruptions; title risks; social and political risks associated with operations in foreign countries; risks of changes in laws affecting our operations or their interpretation, including foreign exchange controls; and risks associated with tax reassessments and legal proceedings. Many of these risks and uncertainties apply to the Company and its operations, as well as DET and its operations. DET’s ongoing mining operations provide a significant portion of the materials the Company processes and its resulting metals production. Therefore, these risks and uncertainties may also affect the Company's operations and have a material effect.

Actual results and developments are likely to differ and may differ materially from those expressed or implied by the forward-looking statements contained in this news release. Such statements are based on several assumptions which may prove to be incorrect, including, but not limited to, assumptions about:

• general business and economic conditions;
• interest and currency exchange rates;
• changes in commodity and power prices;
• acts of foreign governments and the outcome of legal proceedings;
• the supply and demand for, deliveries of, and the level and volatility of prices of copper, molybdenum and other commodities and products used in our operations;
• the ongoing supply of material for processing from Codelco’s current mining operations;
• the grade and projected recoveries of tailings processed by MVC;
• the ability of the Company to profitably extract and process material from the historic tailings deposit;
• the timing of the receipt of and retention of permits and other regulatory and governmental approvals;
• our costs of production and our production and productivity levels, as well as those of our competitors;
• changes in credit market conditions and conditions in financial markets generally;
• our ability to procure equipment and operating supplies in sufficient quantities and on a timely basis;
• the availability of qualified employees and contractors for our operations;
• our ability to attract and retain skilled staff;
• the satisfactory negotiation of collective agreements with unionized employees;
• the impact of changes in foreign exchange rates and capital repatriation on our costs and results;
• engineering and construction timetables and capital costs for our expansion projects;
• costs of closure of various operations;
• market competition;
• tax benefits and tax rates;
• the outcome of our copper concentrate sales and treatment and refining charge negotiations;
• the resolution of environmental and other proceedings or disputes;
• the future supply of reasonably priced power;
• rainfall in the vicinity of MVC continuing to trend towards normal levels;
• average recoveries for fresh and historic tailings;
• our ability to obtain, comply with and renew permits and licenses in a timely manner; and
• our ongoing relations with our employees and entities we do business with.
  

Future production levels and cost estimates assume no adverse mining or other events affecting budgeted production levels.

Climate change is a global issue that could pose challenges that could affect the Company's future operations. This could include more frequent and intense droughts followed by intense rainfall. In the last several years, Central Chile has had drought conditions and also rain episodes of significant magnitude. The Company’s operations are sensitive to water availability and the reserves required to process projected historic tailings tonnage.

Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure that it will achieve or accomplish the expectations, beliefs or projections described in the forward-looking statements.

The preceding list of important factors and assumptions is not exhaustive. Other events or circumstances could cause our results to differ materially from those estimated, projected, and expressed in or implied by our forward-looking statements. You should also consider the matters discussed under Risk Factors in the Company`s Annual Information Form. The forward-looking statements contained herein speak only as of the date of this news release. Except as required by law, we undertake no obligation to revise any forward-looking statements or the preceding list of factors, whether due publicly or otherwise, to new information or future events.

Future-oriented financial information “FOFI” or financial outlooks included in this news release are based on the assumptions contained in the Company’s 2025 Budget, which was prepared consistently with the Company’s accounting policies. FOFI has been included in this news release to provide context to the Company’s 2025 guidance and may not be appropriate for other purposes.

FAQ

What was Amerigo Resources (ARREF) copper production in 2024?

Amerigo produced 64.6 million pounds of copper in 2024, exceeding their guidance by 4%.

What is ARREF's copper production guidance for 2025?

Amerigo's guidance for 2025 is 62.9 million pounds of copper production.

How much cash did ARREF return to shareholders in 2024?

Amerigo returned $21.2 million to shareholders through dividends and share buybacks in 2024.

What was Amerigo's (ARREF) cash cost per pound in 2024?

Amerigo's cash cost was $1.89 per pound in 2024, with a normalized cash cost of $1.87 per pound.

When does ARREF expect to become debt-free?

Amerigo expects to become debt-free by the end of 2025 after making final debt payments.