Amerigo Announces 2010 Financial Results - Earnings of $15.4 million- Operating cash flow of $30 million
- Earnings of $15.4 million
- Operating cash flow of $30 million
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/28/11 -- Amerigo Resources Ltd. (TSX: ARG) ('Amerigo' or the 'Company') reported today results for the year ended December 31, 2010.
Amerigo's President and CEO, Dr. Klaus Zeitler, stated, 'We are pleased to report that 2010 was an excellent year for Amerigo both in terms of production and financial results. Despite the effects of the devastating earthquake that struck Chile last February, the Company set annual production records for both copper and molybdenum. Revenues of $152 million were more than 70% higher than 2009, with net earnings of $15.4 million and operating cash flow of $30 million. Earnings and cash flow in Q4-2010 were equivalent to the combined results for the first three quarters of 2010. Cash and cash equivalents increased from $7.1 million to more than $35 million during the year. With the Company on solid financial ground and record production levels for both copper and molybdenum expected once again in the coming year, we are optimistic about Amerigo's prospects for 2011.'
Key achievements
The Company achieved substantial increases in copper production, which resulted in a significant improvement in financial performance and financial position compared to fiscal 2009. In fiscal 2010 the Company:
-- Produced 21,137 tonnes of copper, an increase of 20% from 2009
(including 5,947 tonnes in Q4-2010), and 777,304 pounds of molybdenum,
an increase of 31% from 2009 (including 244,912 pounds in Q4-2010).
Copper production from the processing of old tailings increased from
3,761 to 8,910 tonnes in the year.
-- Posted revenue of $152,120,143 and net earnings of $15,389,444, compared
to revenue of $89,473,248 and net earnings of $45,749 in 2009. Q4-2010
revenue of $50,725,991 and net earnings of $7,498,172 were,
respectively, 50% and 92% higher than Q4-2009.
-- Generated an operating profit of $26,338,090, compared to $8,893,803 in
2009.
-- Generated operating cash flow of $30,116,433 in 2010, almost triple the
$11,554,482 generated in 2009 ($12,170,194 in Q4-2010 compared to
$6,387,953 in Q4-2009). Including changes in non-cash working capital
accounts, operating cash flow was $34,909,053 in 2010, compared to
$5,637,930 in 2009 ($20,237,029 in Q4-2010 compared to $7,415,773 in Q4-
2009).
-- Increased cash and cash equivalents to $35,044,797, compared to
$7,191,093 on December 31, 2009.
Financial results
-- Revenue was $152,120,143 compared to $89,473,248 in 2009, due to higher
production levels and higher average copper and molybdenum prices. Cost
of sales was $125,782,053, compared to $80,579,445 in 2009, an increase
driven by higher production overall and higher input costs for power and
royalties to El Teniente. Royalty costs are based on production levels
and monthly average copper prices.
-- Operating profit was $26,338,090, compared to $8,893,803 in 2009. The
improvement in operating profit was driven by higher production and
copper and molybdenum prices, offset by higher production costs. Net
earnings were $15,398,444, compared to $45,749 in 2009.
Production
-- The Company produced 46.60 million pounds of copper, 20% higher than the
38.96 million pounds produced in 2009.
-- Molybdenum production was 777,304 pounds, 31% higher than the 594,813
pounds produced in 2009, mainly as a result of increased processing of
old tailings and improved recovery rates.
Revenue
-- Revenue increased to $152,120,143 compared to $89,473,248 in 2009. The
Company's copper selling price before smelting, refining and other
charges was $3.25/lb compared to $2.35/lb in 2009, and the Company's
molybdenum selling price was $15.60/lb compared to $11.20/lb in 2009.
Copper sales volume increased 18% and molybdenum sales volume was 26%
higher than in 2009.
Costs
-- Cash cost (the aggregate of smelting, refining and other charges,
production costs net of molybdenum-related net benefits, administration
and transportation costs) before El Teniente royalty was $1.86/lb,
compared to $1.62/lb in 2009. Cash costs increased in 2010 mostly as a
result of higher power costs.
-- Total cost (the aggregate of cash cost, El Teniente royalty,
depreciation and accretion) was $2.76/lb compared to $2.21/lb in 2009.
The increase in total cost was driven by higher cash cost and higher El
Teniente royalty due to higher copper and molybdenum prices.
-- Power costs in 2010 were $39,836,166 ($0.1560/kwh) compared to
$23,336,113 ($0.1135/kwh) in 2009. Chilean electricity costs in 2010
were higher than expected due to a drought in Chile and the fact that
the Company's generators were operational for only a part of the year,
not fully mitigating MVC's exposure to high power grid costs.
Cash and Financing Activities
-- Cash balance was $35,044,797 at December 31, 2010 compared to $7,191,093
at December 31, 2009.
Investments
-- Payments for capital expenditures were $11,302,271 compared to
$11,557,454 in 2009. Capital expenditures incurred in 2010 totalled
$10,728,233 (2009: $10,784,059).
-- The Company's investments in Candente Copper Corp., Candente Gold Corp.
and Los Andes Copper Ltd. had aggregate fair values of $25,583,511 at
December 31, 2010 (December 31, 2009: $6,754,790). The $18,828,721
before-tax fair value increase in these investments (2009: increase of
$3,723,479) does not affect net earnings but is included as other
comprehensive income on a net of tax basis of $15,159,897 (2009:
$3,693,041).
Outlook
-- In 2011 copper production is expected to be at least 50 million pounds
and molybdenum production close to 1 million pounds.
The information in this news release and the Selected Financial Information contained in the following page should be read in conjunction with the Audited Consolidated Financial Statements and Management Discussion and Analysis for the years ended December 31, 2010 and 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.
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
YEARS ENDED DECEMBER 31, 2010 AND 2009
All figures expressed in US Dollars
Consolidated Balance Sheets
December 31, December 31,
2010 2009
$ $
------------------------------
Cash and cash equivalents 35,044,797 7,191,093
Mineral property, plant and equipment 127,154,030 121,783,483
Other assets 54,821,435 37,220,851
------------------------------
Total assets 217,020,262 166,195,427
------------------------------
------------------------------
Total liabilities 66,504,181 58,999,428
Shareholders' equity 150,516,081 107,195,999
------------------------------
Total liabilities and shareholders' equity 217,020,262 166,195,427
------------------------------
------------------------------
Consolidated Statements of Operations and Comprehensive
Income
Year ended Year ended
December 31, December 31,
2010 2009
$ $
------------------------------
Total revenue, net of smelter and refinery
charges 152,120,143 89,473,248
Cost of sales (125,782,053) (80,579,445)
Other expenses (5,948,476) (4,852,442)
Non-operating gains (losses), net 797,438 (1,737,589)
Income tax expense (5,045,849) (1,632,655)
Non-controlling interests (751,759) (625,368)
------------------------------
Net earnings 15,389,444 45,749
Other comprehensive income 15,160,167 3,693,041
------------------------------
Comprehensive income 30,549,611 3,738,790
------------------------------
EPS - Basic and Diluted 0.09 0.00
Consolidated Statements of Cash Flows
Year ended Year ended
December 31, December 31,
2010 2009
$ $
------------------------------
Net cash provided by operating activities 34,909,053 5,637,930
Net cash used in investing activities (11,302,271) (11,557,454)
Net cash provided by financing activities 4,246,922 9,923,533
------------------------------
Net cash inflow during the period 27,853,704 4,004,009
------------------------------
AMERIGO RESOURCES LTD.
SELECTED TRAILING DATA
All figures expressed in US Dollars
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Q4-2010 Q3-2010 Q2-2010 Q1-2010 Q4-2009
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Copper
production
(tonnes) 5,947 6,074 5,220 3,896 5,498
Copper
sales
(tonnes) 5,926 6,071 5,149 3,855 5,713
Molybdenum
production
(lbs) 244,912 233,266 155,755 143,371 246,636
Molybdenum
sales
(lbs) 222,533 231,837 156,514 137,094 252,761
Company's
recorded
copper
price
($/lb) 3.75 2.92 3.09 3.20 2.79
(i)Before
smelting
and
refining
costs
and
settlement
adjustments
to
prior
quarters'
sales
Revenue $ 50,725,991 $ 39,303,405 $ 32,433,982 $29,656,765 $ 33,852,105
Power
costs 11,484,684 10,670,960 9,639,946 8,040,576 5,985,090
El
Teniente
royalty 11,057,260 8,733,791 7,722,758 6,321,273 6,875,447
All other
cost of
sales 15,745,543 13,544,604 11,549,199 11,271,459 12,697,674
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Operating
profit 12,438,504 6,354,050 3,522,079 4,023,457 8,293,894
All other
expenses,
including
taxes 4,940,332 4,071,952 1,489,069 447,293 4,382,128
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Net
earnings $ 7,498,172 $ 2,282,098 $ 2,033,010 $ 3,576,164 $ 3,911,766
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Earnings
per share
(basic) 0.04 0.01 0.01 0.02 0.03
Cash cost
($/lb) 2.01 1.71 1.81 1.92 1.58
Total
cost
($/lb) 3.02 2.53 2.66 2.86 2.21
Cash flow
provided
by
operat-
ions $20,237,029 $ 5,934,831 $ 8,367,459 $ 925,926 $ 7,415,773
Cash flow
used in
investing $ 3,629,488 $ 2,287,851 $ 2,987,409 $ 2,953,714 $ 3,307,744
Cash flow
provided
by (used
in)
financing $ 640,868 $(3,062,285) $(2,894,225) $ 9,562,564 $ 201,232
Closing
cash
position $35,044,797 $17,796,388 $17,211,693 $14,725,869 $ 7,191,093
Working
capital 22,454,265 13,965,416 9,511,805 10,246,413 (6,353,737)
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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 and CEO
(604) 218-7013
Amerigo Resources Ltd.
(604) 697-6201
www.amerigoresources.com