Amerigo Announces Q1-2010 Financial Results
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/12/10 -- Amerigo Resources Ltd. (TSX: ARG) -
-- Cash flow from operations of $5,149,866
-- Net earnings of $3,576,164
-- Production ramp up on track
Amerigo Resources Ltd. ('Amerigo' or the 'Company') reported today results for the quarter ended March 31, 2010.
Mr. Steven Dean, Amerigo's Chairman, stated, 'Notwithstanding Q1 being the seasonal low production quarter and the impact of the major earthquake in Chile, we are pleased to report strong earnings and cash flow in Q1-2010. Net earnings were $3.6 million and cash flow from operations was $5.1 million.'
Mr. Dean continued by saying, 'The outlook for Q2-2010, continues to be positive with the expectation that production will continue to ramp-up from old tailings. Copper production is expected to be 40% higher in Q2-2010 than in the first quarter.'
Key achievements
In Q1-2010 the Company continued to focus on strengthening operating profitability and improve both financial performance and its financial position. The Company:
-- Posted revenue of $29,656,765 and net earnings of $3,576,164 in Q1-2010,
compared to revenue of $13,021,611 and a net loss of $4,779,074 in Q1-
2009.
-- Generated an operating profit of $4,023,457 in the quarter, compared to
an operating loss of $2,601,186 in Q1-2009.
-- Generated operating cash flow (excluding changes in non-cash working
capital accounts) of $5,149,866 in Q1-2010, compared to cash used in
operations of $1,545,684 in Q1-2009.
-- Restored its Balance Sheet to positive working capital of $10,246,413 at
March 31, 2010 compared to a working capital deficiency of $6,353,737 at
December 31, 2009.
-- Held consolidated cash of $14,725,869.
-- Issued 36,404,400 shares on the exercise of warrants for proceeds of
$11,396,912.
-- Reached record Q1 copper production of 3,896 tonnes of copper, 21%
higher than the Company's Q1-2009 production of 3,228 tonnes of copper.
Copper production from the processing of old tailings increased from 93
tonnes in Q1-2009 to 1,476 tonnes in Q1-2010.
-- Made principal repayments of $3,742,334 on loans outstanding to Enami
($975,000), a Chilean bank ($874,144) and to El Teniente ($1,893,190).
Financial results
-- At an average copper sales price of $3.20/lb, the Company achieved
operating profit of $4,023,457 and net earnings of $3,576,164, compared
to an operating loss of $2,601,186 and a net loss of $4,779,074 in Q1-
2009.
-- Revenue was $29,656,765 compared to $13,021,611 in Q1-2009, due to
higher production and stronger copper and molybdenum prices. Cost of
sales in Q1-2010 was $25,633,308, compared to $15,622,797 in Q1-2009.
Cost of sales increased due to higher production and royalty costs.
Royalty costs are based on production levels and monthly average copper
prices.
-- Cash flow provided by operations, including changes in working capital
accounts, totaled $925,926 or 1 cents per share, compared to cash used
in operations of $8,639,787 or 8 cents per share in Q1-2009. The most
significant change in working capital accounts in Q1-2010 was the
$3,375,798 repayment of current and deferred royalties to El Teniente.
Production
-- The Company produced 8.59 million pounds of copper, 21% higher than the
7.12 million pounds produced in Q1-2009.
-- Molybdenum production was 143,371 pounds, 48% higher than the 97,184
pounds produced in Q1-2009, mainly as a result of improved grades and
increased processing of old tailings.
Revenue
-- Revenue increased to $29,656,765 compared to $13,021,611 in Q1-2009 due
to higher average copper and molybdenum prices and higher production.
The Company's copper selling price before smelter, refinery and other
charges was $3.20/lb compared to $1.82/lb in Q1-2009, and the Company's
molybdenum selling price was $16.16/lb compared to $8.63/lb in Q1-2009.
2,400 tonnes of copper sold in the quarter (63% of copper deliveries in
the quarter) were capped at $3.20/lb. Copper sales volume increased 20%
and molybdenum sales volume was 35% higher than in Q1-2009.
Costs
-- Cash cost (the aggregate of smelter, refinery and other charges,
production costs net of molybdenum-related net benefits, administration
and transportation costs) before El Teniente royalty was $1.92/lb,
compared to $1.94/lb in Q1-2009. Cash costs decreased slightly in Q1-
2010 as a result of higher production levels and higher molybdenum by-
product credits.
-- Total cost (the aggregate of cash cost, El Teniente royalty,
depreciation and accretion) was $2.86/lb compared to $2.42/lb in Q1-
2009. The increase in total cost was driven by higher El Teniente
royalty due to stronger copper and molybdenum prices.
-- Power costs in Q1-2010 were $8,040,576 ($0.1479/kwh) compared to
$5,842,586 ($0.1468/kwh) in Q1-2009. The increase in total power costs
in Q1-2010 was driven by higher energy consumption from higher
production levels. Chilean electricity costs in 2010 are expected to
remain at levels comparable to 2009.
-- Total operating costs such as power, steel and reagents increased from
Q1-2009 levels due to higher production. Unit costs were also higher due
to high plant maintenance costs in the quarter and costs for processing
of old tailings which were basically nil in Q1-2009.
Cash and Financing Activities
-- Cash balance was $14,725,869 at March 31, 2010 compared to $7,191,093 at
December 31, 2009.
-- The Company received proceeds of $11,396,912 from the exercise of
warrants in Q1-2010.
-- Subsequent to March 31, 2010, the Company structured a $5,449,891 demand
loan into a 3-year term loan.
Investments
-- Payments for capital expenditures were $2,953,714 compared to $2,965,313
in Q1-2009. Capital expenditures incurred in Q1-2010 totaled $2,096,676
(Q1-2009: $2,653,414).
-- The Company's investments in Candente Copper Corp. ('Candente Copper'),
Candente Gold Corp. ('Candente Gold') and Los Andes Copper Ltd. ('Los
Andes') had aggregate fair values of $7,885,675 at March 31, 2010
(December 31, 2009: $6,754,790). The $1,130,885 before-tax fair value
increase in these investments in Q1-2010 (Q1-2009: $1,872,143) does not
affect net earnings but is included as other comprehensive income for
the quarter on a net of tax basis of $1,002,212 (Q1-2009: $1,872,143).
Outlook
-- Copper production in Q2-2010 is expected to be 30 to 40% higher than in
Q1-2010. Molybdenum production in Q2-2010 is also expected to increase
from first quarter levels.
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 quarter ended March 31, 2010 and the Audited Consolidated Financial Statements and Management Discussion and Analysis for the year ended December 31, 2009, 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 company producing copper and molybdenum from its MVC operations near Santiago, Chile. Tel: (604) 681-2802; Fax: (604) 682-2802; Web: www.amerigoresources.com; Listing: ARG:TSX
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.
AMERIGO RESOURCES LTD.
SELECTED FINANCIAL INFORMATION
QUARTERS ENDED MARCH 31, 2010 AND 2009
All figures expressed in US Dollars
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Consolidated Balance Sheets
March 31, December 31,
2010 2009
$ $
------------------------------
Cash and cash equivalents 14,725,869 7,191,093
Mineral property, plant and equipment 122,282,190 121,783,483
Other assets 39,079,933 37,220,851
------------------------------
Total assets 176,087,992 166,195,427
------------------------------
------------------------------
Total liabilities 52,606,002 58,999,428
Shareholders' equity 123,481,990 107,195,999
------------------------------
Total liabilities and shareholders' equity 176,087,992 166,195,427
------------------------------
------------------------------
Consolidated Statements of Operations and Comprehensive Income (Loss)
Quarter ended Quarter ended
March 31, 2010 March 31, 2009
$ $
------------------------------
Total revenue, net of smelter and refinery 29,656,765 13,021,611
charges
Cost of sales (25,633,308) (15,622,797)
Other expenses (1,216,418) (1,234,692)
Non-operating gains( losses), net 994,295 (1,140,836)
Income tax recovery (expense) (85,949) 312,687
Non-controlling interests (139,221) (115,047)
------------------------------
Net earnings (loss) 3,576,164 (4,779,074)
Other comprehensive income 1,002,212 1,872,143
------------------------------
Comprehensive income (loss) 4,578,376 (2,906,931)
------------------------------
EPS (LPS) - Basic and Diluted 0.02 (0.04)
Consolidated Statements of Cash Flows
Quarter ended Quarter ended
March 31, 2010 March 31, 2009
$ $
------------------------------
Net cash provided by (used in) operating 925,926 (8,639,787)
activities
Net cash used in investing activities (2,953,714) (2,965,313)
Net cash provided by financing activities 9,562,564 11,880,666
------------------------------
Net cash inflow during the period 7,534,776 275,566
------------------------------
------------------------------
AMERIGO RESOURCES LTD.
SELECTED TRAILING DATA
All figures expressed in US Dollars
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Q1-2010 Q4-2009 Q3-2009 Q2-2009 Q1-2009
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Copper
production
(tonnes) 3,896 5,498 4,589 4,358 3,228
Copper
sales
(tonnes) 3,855 5,713 4,622 4,304 3,228
Molybdenum
production
(lbs) 143,371 246,636 151,310 99,683 97,184
Molybdenum
sales
(lbs) 137,094 252,761 147,894 92,065 101,661
Company's
recorded
copper
price
($/lb) (i) 3.20 2.79 2.43 2.06 1.82
(i)Before
smelter
and
refinery
costs and
settlement
adjustments
to prior
quarters'
sales
Revenue $ 29,656,765 $ 33,852,105 $ 24,532,499 $ 18,067,033 $ 13,021,611
Power costs 8,040,576 5,985,090 5,411,515 6,096,922 5,842,586
El Teniente
royalty 6,321,273 6,875,447 4,686,346 3,634,597 1,387,644
All other
cost of
sales 11,271,459 12,697,674 10,983,234 8,585,823 8,392,567
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Operating
profit
(loss) 4,023,457 8,293,894 3,451,404 (250,309) (2,601,186)
All other
expenses,
including
taxes 447,293 4,382,128 213,288 2,074,750 2,177,888
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Net
earnings
(loss) $ 3,576,164 $ 3,911,766 $ 3,238,116 $ (2,325,059)$ (4,779,074)
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Earnings
(loss) per
share
(basic) 0.02 0.03 0.02 (0.02) (0.04)
Cash cost
($/lb) 1.92 1.58 1.49 1.56 1.94
Total cost
($/lb) 2.86 2.21 2.14 2.14 2.42
Cash flow
provided
by (used
in)
operations$ 925,926 $ 7,415,773 $ (558,286)$ 7,420,230 $ (8,639,787)
Cash flow
used in
plant
expansion $ 2,953,714 $ 3,307,744 $ 2,039,630 $ 3,244,767 $ 2,965,313
Cash flow
provided
by (used
in)
financing $ 9,562,564 $ 201,232 $ (824,404)$ (1,333,961)$ 11,880,666
Closing
cash
position $ 14,725,869 $ 7,191,093 $ 2,881,832 $ 6,304,152 $ 3,462,650
Working
capital 10,246,413 (6,353,737) (7,468,463) (10,318,380) (8,094,959)
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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.
Contacts:
Amerigo Resources Ltd.
Dr. Klaus Zeitler
President
(604) 681-2802, (604) 218-7013
(604) 682-2802 (FAX)
www.amerigoresources.com