Amerigo Resources Ltd.

Amerigo Resources Ltd.

January 26, 2010 09:00 ET

Amerigo Announces Q4 2009 Production Results and Provides 2010 Production Guidance

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 26, 2010) - Amerigo Resources Ltd. (TSX:ARG) ("Amerigo" or the "Company") is pleased to announce production results for the fourth quarter of 2009 from Minera Valle Central ("MVC"), the Company's operations located near Rancagua, Chile. For the three months ended December 31, 2009 MVC produced 12.12 million pounds of copper and 246,636 pounds of molybdenum.

Key operating and sales metrics are shown below.

Production Metrics: Q4-2008 Q1-2009 Q2-2009 Q3-2009 Q4-2009
Copper Production (million lbs) 9.53 7.12 9.61 10.12 12.12
Molybdenum Production (lbs) 211,729 97,184 99,683 151,310 246,636
Ore milled (Tonnes 000's) 13,299 10,859 12,292 12,889 13,576
Copper Grade (%) 0.134 0.12 0.14 0.14 0.15
Copper Recovery (%) 24.26 24.78 24.51 26.03 27.00
Molybdenum Grade in copper concentrates (%) 0.79 0.49 0.44 0.59 0.73
Molybdenum Recovery (%) 83.96 80.77 69.53 74.13 82.59
Sales Metrics: Q4-2008 Q1-2009 Q2-2009 Q3-2009 Q4-2009
Copper sales (Million lbs) 9.56 7.12 9.49 10.19 12.59
Copper price at end of period ($US/lb) 1.31 1.83 2.27 2.79 3.33
Prior period copper sales subject to final pricing during period (Million lbs) 9.11 7.91 10.10 N/A1 1.41
Average final settlement price for prior period copper sales ($US/lb) 1.8345 1.5032 2.1153 N/A1 2.8522
Company's Recorded Copper Price2 1.31 1.82 2.06 2.43 2.79
Molybdenum sales (lbs) 219,215 101,661 92,065 147,894 252,761
Molybdenum price at end of period ($US/lb) 9.250 8.325 10.125 14.125 11.230
Power Costs (per kwh) $0.1261 $0.1468 $0.1247 $0.0989 $0.0963

1 Although the Company's Q3-2009 copper production was being priced on the basis of M+1, production was behind delivery quotas therefore all copper production in Q3-2009 was finally priced.
2 Copper price recorded for the Company's financial statements for the quarter before smelter and refinery charges and settlement adjustments to prior periods' sales and after hedging.

Amerigo's president, Dr. Klaus Zeitler, stated, "MVC set a new record for quarterly copper production at 12.12 million pounds in Q4-2009, and molybdenum production of 246,636 pounds was at the highest level since record production of 261,234 pounds in Q3-2008. The Company's decision to redesign the old tailings extraction plan continues to positively affect results. MVC suspended mining of old tailings in Q1-2009 in order to reposition equipment to access higher grade material, resulting in increased production and higher grades of old tailings. MVC is currently processing approximately 30,000 tonnes per day of old tailings, up more than 50% from the Q3-2009 level. Processing of old tailings will continue to increase in the coming quarters as MVC moves to the contractual rate of 45,000 tonnes per day."

The copper price rose again in the quarter and power costs remained relatively stable, both of which have a favorable effect on the Company's financial results. The molybdenum price, although now rising again in 2010, unfortunately fell during the quarter which adversely affects the Company's results.

With respect to 2010 production guidance, Dr. Zeitler added, "Despite a slow start to 2009, copper production was above budget for the year mainly due to much improved production levels in the last two quarters, a trend we expect will continue throughout 2010. Although Q1-2010 production will be lower than that of Q4-2009, as is the case each year due mainly to maintenance shutdowns at El Teniente and MVC, it is expected to be substantially higher than Q1-2009. Copper production for the full year is projected to be 47 million pounds, approximately 20% higher than 2009, and to be at an annualized rate of close to 55 million pounds by the end of the year. In addition, molybdenum production is anticipated to be more than 25% higher than in 2009, and should be in excess of 800,000 pounds."

Amerigo Resources Ltd. produces copper and molybdenum under a long term partnership with the world's largest copper producer, Codelco, by means of processing fresh and old tailings from the world's largest underground copper mine, El Teniente near Santiago, Chile.

Certain of the information and statements contained herein that are not historical facts, constitute "forward-looking information" within the meaning of the Securities Act (British Columbia), Securities Act (Ontario) and the Securities Act (Alberta) ("Forward-Looking Information"). Forward-Looking Information is often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend"; statements that an event or result is "due" on or "may", "will", "should", "could", or might" occur or be achieved; and, other similar expressions. More specifically, Forward-Looking Information contained herein includes, without limitation, information concerning future tailings production volumes and the Company's copper and molybdenum production, all of which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such Forward-Looking Information; including, without limitation, material factors and assumptions relating to, and risks and uncertainties associated with, the supply of tailings from El Teniente and extraction of tailings from the Colihues tailings impoundment, the achievement and maintenance of planned production rates, the evolving legal and political policies of Chile, the volatility in the Chilean economy, military unrest or terrorist actions, metal price fluctuations, favourable governmental relations, the availability of financing for activities when required and on acceptable terms, the estimation of mineral resources and reserves, current and future environmental and regulatory requirements, the availability and timely receipt of permits, approvals and licenses, industrial or environmental accidents, equipment breakdowns, availability of and competition for future mineral acquisition opportunities, availability and cost of insurance, labour disputes, land claims, the inherent uncertainty of production and cost estimates, currency fluctuations, expectations and beliefs of management and other risks and uncertainties, including those described under Risk Factors in the Company's Annual Information Form dated March 31, 2008, and in each subsequent Management's Discussion and Analysis. Such Forward-Looking Information is based upon the Company's assumptions regarding global and Chilean economic, political and market conditions and the price of metals, including copper and molybdenum, and future tailings production volumes and the Company's copper and molybdenum production. Among the factors that have a direct bearing on the Company's future results of operations and financial conditions are changes in project parameters as plans continue to be refined, interruptions in the supply of fresh tailings from El Teniente, further delays in the extraction of tailings from the Colihues tailings impoundment, a change in government policies, competition, currency fluctuations and restrictions and technological changes, among other things. Should one or more of any of the aforementioned risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from any conclusions, forecasts or projections described in the Forward-Looking Information. Accordingly, readers are advised not to place undue reliance on Forward-Looking Information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise Forward-Looking Information, whether as a result of new information, future events or otherwise.

Contact Information

  • Amerigo Resources Ltd.
    Dr. Klaus Zeitler
    (604) 681-2802 or (604) 218-7013
    (604) 682-2802 (FAX)