Welcome!

News Feed Item

Amerigo Announces Q2-2014 Financial Results

- Revenues of $27.3 million

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/07/14 -- Amerigo Resources Ltd. (TSX:ARG) ("Amerigo" or the "Company") reported today results for the three months ended June 30, 2014 ("Q2-2014"). The Company posted revenues of $27.3 million, generated $1.5 million in cash flow from operations before changes in non-cash working capital and posted a loss of $8.3 million, which included a $6.2 million negative impact on earnings from changes in estimates(1) resulting from the recent extension of the Company's tailings processing contract from 2021 to 2037.

Rob Henderson, Amerigo's President and COO, commented "We experienced low copper and molybdenum production in the quarter due to low sulphide grades in both fresh and old tailings, together with wet conditions in the Colihues deposit which limited access to higher grade tailings located in deeper zones. Although we believe grades and production rates will improve during the second half of the year, we have revised our production guidance for 2014 to 40 million pounds of copper and 500,000 pounds of molybdenum. We generated $1.5 million in cash flow from operations in Q2-2014, and have implemented further cost reduction initiatives as of July 1st. As a result, 2014 cash cost guidance is being maintained at $2.15 to $2.25/lb Cu."

Amerigo's Chairman and CEO, Dr. Klaus Zeitler, added "We are extremely pleased to have now accomplished two of the three major milestones necessary for the Cauquenes expansion. The signing of the master agreement granting the Company the rights to the Cauquenes deposit and extending tailings processing rights to 2037, together with receipt of the environmental approvals from COREMA, Chile's Regional Environmental Commission, put the Company on track to begin construction of the expansion during the last quarter of this year. The final major milestone, completion of the expansion financing, is in its final stages with bank due diligence complete and negotiations currently taking place for the finalization of the terms of the loan agreement. Once completed, the expansion is projected to have a very significant and positive effect on the Company's financial results, with annual production projected to more than double to close to 90 million pounds of copper and cash costs expected to fall well below $2.00/lb."

(1) Changes in Estimates of $6.2 million include a gain of $2.4 million included as a component of cost of sales, a loss of $8.1 million included as a component of other expenses and a $0.5 million tax expense. Changes in Estimates are further explained in Note 4 of the Company's Q2-2014 financial statements and on page 12 of the Q2-2014 MD&A.

Comparative Financial Overview

----------------------------------------------------------------------------
                                           Three months ended June 30,      
                                           2014     2013            Change  
                                                                $        %  
----------------------------------------------------------------------------
Copper produced, million pounds            9.34     9.55    (0.21)      (2%)
Copper sold, million pounds                9.32     9.44    (0.12)      (1%)
Molybdenum produced, pounds             152,340  176,155  (23,815)     (14%)
Molybdenum sold, pounds                 153,970  177,845  (23,875)     (13%)
Percentage of copper production from                                        
 old tailings                                38%      37%       -        1% 
Revenue ($ thousands)                    27,325   31,446   (4,121)     (13%)
Cost of sales(1) ($ thousands)           26,127   31,203   (5,076)     (16%)
El Teniente royalty costs ($ thousands)   6,250    7,317   (1,067)     (15%)
Gross profit ($ thousands)                1,198      243      955      393% 
Net loss(2) ($ thousands)                (8,290)    (837)  (7,453)     890% 
Operating cash flow ($ thousands)(3)      1,473    4,142   (2,669)     (64%)
Cash flow paid for plant expansion ($                                       
 thousands)                              (2,723)  (3,676)     953      (26%)
Cash and cash equivalents ($ thousands)   7,265    3,881    3,384       87% 
Bank debt ($ thousands)                       -        -        -        -  
Average realized copper price per pound    3.16     3.40    (0.24)      (7%)
Cash cost per pound                        2.22     2.24    (0.02)      (1%)
Total cost per pound                       3.23     3.48    (0.25)      (7%)
----------------------------------------------------------------------------
(1)  Includes El Teniente royalty costs                                     
(2)  Includes $6.2 million in Changes in Estimates.                         
(3)  Excluding working capital changes                                      

Financial results

--  Revenue was $27.3 million, compared to $31.4 million in Q2-2013.
    Revenues decreased 13% due to lower copper and molybdenum sales volume
    and lower average copper prices. 

--  Cost of sales was $26.1 million compared to $31.2 million in Q2-2013, a
    decrease of 16% driven by lower production levels and a $2.4 million
    gain from Changes in Estimates. 

--  Gross profit was $1.2 million, compared to $243,000 in Q2-2013. 

--  Net loss was $8.3 million, compared to $837,000 in Q2-2013 and included
    Changes in Estimates of $6.2 million.  

--  In Q2-2014, the Company generated cash flow from operations before
    changes in non-cash working capital of $1.5 million, compared to $4.1
    million in Q2-2013. 

Production

--  The Company produced 9.3 million pounds of copper, 2% lower than the 9.6
    million pounds produced in Q2-2013. 

--  Molybdenum production was 152,340 pounds, 14% lower than the 176,155
    pounds produced in Q2-2013. 

--  Copper production in Q2-2014 was below target due to low grades for both
    fresh and old tailings. Sulphide content in the fresh tailings was also
    low and negatively impacted recovery. Low grades have persisted in
    Colihues for longer than originally anticipated, as wet conditions in
    the extraction zone have limited access to better grades located in
    deeper layers. 

Revenue

--  Revenue decreased to $27.3 million, compared to $31.4 million in Q2-
    2013, due to lower production levels and lower copper prices. The
    Company's copper selling price before smelting, refining and other
    charges was $3.16/lb compared to $3.40/lb in Q2-2013, and the Company's
    molybdenum selling price was $13.33/lb compared to $11.00/lb in Q2-2013.

Costs

--  Cash cost (a non-GAAP measure equal to the aggregate of smelting,
    refining and other charges, production costs net of inventory
    adjustments and molybdenum and tolling-related net benefits,
    administration and transportation costs), before El Teniente royalty was
    $2.22/lb, compared to $2.24/lb in Q2-2013.  

--  Total cost (a non-GAAP measure equal to the aggregate of cash cost, El
    Teniente royalty, depreciation and accretion) was $3.23/lb compared to
    $3.48/lb in Q2-2013, mainly as a result of lower depreciation charges. 

--  Power costs in Q2-2014 were $5.4 million ($0.0896/kwh) compared to $5.1
    million ($0.0858/kwh) in Q2-2013. Similar power cost levels are expected
    to December 31, 2017, the end of the term of MVC's current power
    contract. 

--  Total El Teniente royalties were $6.3 million in Q2-2014, compared to
    $7.3 million in Q2-2013, due to lower production and metal prices. 

Cash and Financing Activities

--  Cash balance was $7.3 million at June 30, 2014 compared to $13.1 million
    at December 31, 2013. 

Investments

--  Cash payments for capital expenditures ("Capex") were $2.7 million,
    compared to $3.7 million in Q2-2013, and were funded from operating cash
    flow and cash on hand. YTD cash payments for Capex were $6.1 million,
    compared to $7.3 million in 2013. 

--  Capex incurred in Q2-2014 totaled $2 million (Q2-2013: $3 million) and
    included project investments in connection with Cauquenes engineering
    and permitting and sustaining Capex projects. YTD-2014 incurred Capex
    totaled $4.8 million (YTD-2013: $5 million). 

--  The Company's investments in Candente Copper Corp. and Los Andes Copper
    Ltd. had an aggregate fair value of $3.5 million at June 30, 2014
    (December 31, 2013: $3.2 million). 

Outlook

--  Production YTD-2014 has been lower than anticipated, mostly due to low
    grades. Although the grades of tailings are expected to improve in the
    second half of the year, MVC's 2014 production guidance has been revised
    from 45 to 40 million pounds of copper and from 800,000 to 500,000
    pounds of molybdenum. 

--  Cash cost continues to be projected to be between $2.15/lb and $2.25/lb
    in 2014. 

--  2014 sustaining Capex at MVC is estimated to be approximately $3.8
    million. Capex for the Cauquenes expansion project is estimated to be
    approximately $140 million excluding escalation, contingencies and
    finance costs, of which $8.7 million has been incurred to June 30, 2014.

The information in this news release and the Selected Financial Information contained in the following page should be read in conjunction with the Unaudited Condensed Consolidated Interim Financial Statements and MD&A for the three and six months ended June 30, 2014 and the Audited Consolidated Financial Statements and MD&A for the year ended December 31, 2013, which will be available at the Company's website at www.amerigoresources.com and at www.sedar.com.

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. Listing: (TSX:ARG)

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, 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 and in Management's Discussion and Analysis in the Company's financial statements.

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.

                           AMERIGO RESOURCES LTD.                           
                       SELECTED FINANCIAL INFORMATION                       
                                                                            
                    QUARTERS ENDED JUNE 30, 2014 AND 2013                   
        All figures expressed in US Dollars and presented under IFRS        
----------------------------------------------------------------------------

Consolidated Statements of Financial Position

                                                      June 30,  December 31,
                                                          2014          2013
                                                             $             $
                                                ----------------------------
Cash and cash equivalents                                7,265        13,148
Property, plant and equipment                          128,109       116,601
Other assets                                            32,106        56,360
                                                ----------------------------
                                                                            
Total assets                                           167,480       186,109
                                                ----------------------------
                                                ----------------------------
                                                                            
Total liabilities                                       53,373        64,370
Shareholders' equity                                   114,107       121,739
                                                ----------------------------
                                                                            
Total liabilities and shareholders' equity             167,480       186,109
                                                ----------------------------

Consolidated Statements of Comprehensive Loss

                                              Quarter ended   Quarter ended 
                                                   June 30,        June 30, 
                                                       2014            2013 
                                                          $               $ 
                                            --------------------------------
Revenue                                              27,325          31,446 
Cost of sales                                       (26,127)        (31,203)
Other expenses                                         (955)         (1,176)
Change in estimates                                  (8,066)              - 
Finance expense                                         (95)           (114)
Income tax expense                                     (372)            210 
                                            --------------------------------
Loss for the period                                  (8,290)           (837)
Other comprehensive income (loss)                       325         (10,610)
                                            --------------------------------
Comprehensive loss                                   (7,965)        (11,447)
                                            --------------------------------
                                            --------------------------------

Consolidated Statements of Cash Flows

                                              Quarter ended   Quarter ended 
                                                   June 30,        June 30, 
                                                       2014            2013 
                                                          $               $ 
                                            --------------------------------
Net cash provided by (used in) operating                                    
 activities                                           1,609          (4,764)
Net cash used in investing activities                (2,617)         (3,676)
Net cash provided by (used in) financing                                    
 activities                                             157            (993)
                                            --------------------------------
Net cash inflow outflow during the period              (851)         (9,433)
                                            --------------------------------
                                            --------------------------------

Contacts:
Amerigo Resources Ltd.
Dr. Klaus Zeitler
Chairman & CEO
(604) 218-7013

Amerigo Resources Ltd.
(604) 697-6201 or (604) 681-2802
(604) 682-2802 (FAX)
www.amerigoresources.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, will provide a fun and simple way to introduce Machine Leaning to anyone and everyone. Together we will solve a machine learning problem and find an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intellige...
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
We all know that end users experience the Internet primarily with mobile devices. From an app development perspective, we know that successfully responding to the needs of mobile customers depends on rapid DevOps – failing fast, in short, until the right solution evolves in your customers' relationship to your business. Whether you’re decomposing an SOA monolith, or developing a new application cloud natively, it’s not a question of using microservices – not doing so will be a path to eventual b...
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
In his session at 21st Cloud Expo, Michael Burley, a Senior Business Development Executive in IT Services at NetApp, will describe how NetApp designed a three-year program of work to migrate 25PB of a major telco's enterprise data to a new STaaS platform, and then secured a long-term contract to manage and operate the platform. This significant program blended the best of NetApp’s solutions and services capabilities to enable this telco’s successful adoption of private cloud storage and launchi...
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, will go over the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, applicatio...