Amerigo Resources Ltd. (TSX:ARG) ("Amerigo" or the "Company")
announces operations and capital guidance for the year 2013 from
Minera Valle Central ("MVC"), the Company's operations located near
Rancagua, Chile.
Production in 2013 is anticipated to be between 45 and 50
million pounds of copper and one million pounds of molybdenum from
the processing of both fresh tailings from El Teniente and historic
tailings from Colihues. The Colihues material to be extracted in
2013 is projected to be lower grade than the material extracted in
2012 due to the fact that the area to be mined contains recent
tailings deposited by El Teniente in 2006.
In 2013, MVC's copper concentrates will be sold to the smelter
at the average LME market price for the month preceding delivery
("M-1") except for the January 2013 quota which is subject to
pricing.at the average LME price of the month ("M").
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
is projected to be between $1.95/lb and $2.15/lb in 2013. The
Company's contract with its power provider changed on January 1,
2013 from a variable to a much lower fixed rate. This change will
contribute towards net savings over 2012 levels of approximately
$0.40/lb, significantly improving MVC's operating cash flow.
Excluding the Cauquenes Project, 2013 capital expenditures at
MVC are estimated to be approximately $7 million, which is
significantly lower than the $22 million invested in 2012 and will
positively impact the Company's cash resources.
Management anticipates the feasibility study and basic
engineering work for the Cauquenes Project to be completed in
Q2-2013 and, subject to the successful conclusion to negotiations
with Codelco/El Teniente, a production decision made shortly
thereafter. In the event MVC and Codelco/El Teniente are unable to
reach a definitive agreement for the processing of tailings from
Cauquenes, Codelco/El Teniente has agreed to reimburse permitting
and engineering costs incurred by MVC for this stage of the
project. The Cauquenes Project Environmental Impact Assessment
study was filed with the Chilean authorities on January 7,
2013.
Dr. Klaus Zeitler, Amerigo's President and CEO, stated, "2013
will be a pivotal year for the Company, with significantly lower
operating costs and replacement capital costs that we believe will
reduce the Company's cash outlays by up to $35 million compared to
2012. We are also proceeding with optimization studies, permitting
and engineering, and financing discussions for the Cauquenes
project, which will extend our operations in Chile by decades. This
will ensure MVC can start project development without delay once an
agreement is reached with Codelco/El Teniente."
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. Tel: (604) 681-2802; Fax: (604) 682-2802; Web:
www.amerigoresources.com; 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, favourable 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.
Contacts: Amerigo Resources Ltd. Dr. Klaus Zeitler President
(604) 218-7013 Amerigo Resources Ltd. (604) 697-6201
www.amerigoresources.com
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