Amerigo Resources (ARG:TSX)
Reported year end and Q4 2016 financial results. Gross tolling revenue for 2106 grew to US$124.4m from US$73.8m for 2015. The increase in revenue was due to a 52% increase in copper production to 56.8m lbs versus 37.3m lbs in 2015. Cash costs declined to US$1.73/lb from US$2.18/lb in 2015 due to the higher production. The net loss for 2016 was US$7.5m compared to a net loss of US$16.9m for 2015; net loss per share was US$0.04 compared to US$0.10 respectively.
The ramp-up in production from Cauquenes in 2016 averaged 61,615 tpd exceeding design rates of 60k tpd with average plant recovery rates of 31.1% in the year. In Q4-2016 phase one of Cauquenes expansion achieved the project completion criteria set by the lenders. Debt financing discussions for phase two of Cauquenes expansion to 87m lbs of copper per year, at an estimated cash cost of US$1.40/lb in Q2 2018, are underway. Molybdenum production was 0.5 million lbs after being restarted in august 2016.
President and CEO, Rob Henderson stated: “The increase in copper price and the good production from the high grade historic Cauquenes deposit are starting to translate into positive earnings performance. In 2017, we plan to invest $30 million at MVC to substantially increase copper production and reduce cash costs. We remain focused on reducing costs, improving liquidity and delivering against our targets to build value. “
The Group’s cash balance as at December 31, 2016 was US$15.9m. The outlook for 2017 production is 60 – 65 million lbs of copper at an annual cash cost of US$1.60 – $1.75/lb; and production of 1.5 million lbs of molybdenum.