Amerigo Resources Ltd. (TSX: ARG; OTCQX: ARREF)
(“Amerigo” or the “Company”) is pleased to provide an update
regarding operations at Minera Valle Central (“MVC”), the Company’s
100% owned operation located near Rancagua, Chile. MVC’s operations
were temporarily disrupted on June 23, 2023, following a
significant climatic event which affected central Chile. Repairs
are underway and are expected to be completed earlier than
originally estimated.
As reported in the Company’s news release of
June 26, 2023, torrential rainfall on the night of Friday, June 23,
2023, brought down three high-voltage towers connecting MVC to
Chile’s central power grid, causing a total power outage at the MVC
plant. MVC reported no further damage to critical infrastructure,
no injuries, and no accidents.
Earlier this year, MVC completed a
risk-mitigation project to install protective flotation equipment
around the pipes transporting water and slurry between the
Cauquenes historical tailings deposit and MVC’s concentrator plant.
Without this protection, there would have been material damage to
these connecting pipelines.
MVC received an initial estimate that replacing
the infrastructure to reconnect MVC to the power grid could take up
to four weeks. A leading Chilean power infrastructure provider has
begun sourcing and installing new towers, cables, aerial
conductors, and ancillary equipment. It is now expected that the
repair work will be completed by July 9, 2023, two weeks earlier
than originally estimated, enabling MVC to reconnect to the central
grid and resume normalized copper and molybdenum concentrates
production on July 10, 2023.
MVC’s daily production is approximately 180,000
pounds of copper and 3,000 pounds of molybdenum. It is estimated
that 2023 production will be lower by about 3 million pounds (“M
lbs”) of copper and 50,000 lbs of molybdenum because of the power
disruption. Before the power supply interruption, MVC’s copper and
molybdenum production had been over-performing guidance. The
Company now estimates that 2023 production will reach 60.5 M lbs of
copper, approximately 3% lower than the Company’s original guidance
of 62.3 M lbs pounds of copper. Amerigo’s annual guidance of 1.0 M
lbs of molybdenum remains unchanged.
“We have begun the work required to safely
resume operations at MVC. Our team in Chile moved quickly to ensure
the safety of employees and minimize the impact of lost production.
We now expect to resume operations considerably earlier than
originally thought,” said Aurora Davidson, Amerigo’s President and
CEO. She added, “Amerigo is well positioned to face this emergency,
backed by our proactive risk mitigation investments and a strong
balance sheet. Annual production guidance has been marginally
affected, and the Company’s quarterly dividend remains safe”, Ms.
Davidson added.
About Amerigo and Minera Valle Central
(“MVC”)
Amerigo Resources Ltd. 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; ARG:TSX; OTCQX:
ARREF
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Contact Information |
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Aurora Davidson |
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Graham Farrell |
President and CEO |
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Investor Relations |
(604)697-6207 |
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(416)842-9003 |
ad@amerigoresources.com |
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graham.farrell@harbor-access.com |
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Cautionary Note Regarding
Forward-Looking Information
This news release contains certain
forward-looking information and statements defined in applicable
securities laws (collectively called "forward-looking statements").
These statements relate 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:
- the estimated time to complete repairs to the damaged power
towers and to restore normal operations at MVC;
- the extent of the impact on the Company’s operations at MVC
caused by the damaged power towers;
- forecasted production and operating costs;
- our strategies and objectives;
- our estimates of the availability and quantity of tailings and
the quality of our mine plan estimates;
- the sufficiency of MVC’s water reserves to maintain projected
Cauquenes tonnage processing for a period of at least 18
months;
- prices and price volatility for copper, molybdenum and other
commodities and materials we use in our operations;
- 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 capital return
strategy;
- 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 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, including the potential deployment of
performance dividends in 2023; 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 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 (including, but not limited to, the condition of
the land on the banks of the Cachapoal river in the vicinity of
where the new power towers are to be installed), adverse weather
conditions (including, but not limited to, continued extreme
rainfall and unseasonal temperatures that could delay the
completion of the repairs to the damaged power towers), 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, including COVID-19, and the inability of employees to
access sufficient healthcare; 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 from Codelco’s Division El Teniente’s 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 and Codelco and its operations.
Codelco’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 their operations and have a material effect on the
Company.
Actual results and developments will likely
differ materially from those expressed or implied by the
forward-looking statements 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 Cauquenes 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
tailings and Cauquenes 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 significantly affecting
budgeted production levels.
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 publicly or otherwise revise any forward-looking
statements or the preceding list of factors, whether due to new
information or future events.
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