EQS-News: Amerigo Resources Ltd
Net loss of $4.4 million, Free Cash Flow to Equity1 of $0.6 million EBITDA1 of $1.6 million, ending quarter cash & restricted cash of $48.2 million Quarterly dividend of Cdn$0.03 per share declared, representing 12.4% yield2 Amerigo Resources Ltd. (TSX: ARG; OTCQX: ARREF) (“Amerigo” or the “Company”) is pleased to announce financial results for the three months ended September 30, 2022 (“Q3-2022”). Dollar amounts in this news release are in U.S. dollars unless indicated otherwise. Quarterly results included a net loss of $4.4 million, loss per share (“LPS”) of $0.03 (Cdn$0.03) and EBITDA of $1.6 million. Following year-to-date return of capital to shareholders of $24.3 million and debt repayments of $3.5 million, cash and restricted cash on September 30, 2022 were $48.2 million, compared to starting 2022 cash and restricted cash of $64.0 million. Amerigo’s quarterly financial results were impacted by $8.6 million in negative price settlement adjustments to prior quarter copper sales. “We are pleased to report another strong operational quarter where we continued to meet production and cost objectives. We also successfully negotiated a three-year collective labour agreement that will lend further visibility to our forward costs. However, Amerigo’s financial results were negatively affected by copper prices that appeared to be bottoming towards the end of the quarter,” said Aurora Davidson, Amerigo’s President and CEO. “Despite the lower copper prices, Amerigo generated positive free cash flow to equity1. We remain committed to our policy of returning capital to shareholders while we wait for global sentiment to stabilize and copper prices to re-establish their positive historical correlation with inflation,” she added. On October 31, 2022, Amerigo’s Board of Directors declared a quarterly dividend of Cdn$0.03 per share, payable on December 20, 2022, to shareholders of record as of November 30, 2022. Amerigo designates the entire amount of this taxable dividend to be an “eligible dividend” for purposes of the Income Tax Act (Canada), as amended from time to time. Based on the September 30, 2022, share closing price of Cdn$0.97, this represents an annual dividend yield 12.4%2. This news release should be read in conjunction with Amerigo’s interim consolidated financial statements and Management’s Discussion and Analysis (“MD&A) for the three and nine months ended September 30, 2022, available at the Company’s website at www.amerigoresources.com and at www.sedar.com.
Highlights and Significant Items
Investor Conference Call on November 3, 2022 Amerigo’s quarterly investor conference call will take place on Thursday, November 3, 2022 at 11:00 am Pacific Daylight Time/2:00 pm Eastern Daylight Time. To join the call, please dial 1-888-664-6392 (Toll-Free North America) and enter confirmation number 99826991. 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. Contact Information: Aurora Davidson Graham Farrell President and CEO Investor Relations (604)697-6207 (416)842-9003 ad@amerigoresources.comgraham.farrell@harbor-access.com
1 Non-IFRS Measures This news release includes five non-IFRS measures: (i) EBITDA, (ii) operating cash flow before changes in non-cash working capital, (iii) free cash flow to equity (“FCFE”), (iv) free cash flow (“FCF”) and (v) cash cost. These non-IFRS performance measures are included in this news release because they provide key performance measures used by management to monitor operating performance, assess corporate performance, and to plan and assess the overall effectiveness and efficiency of Amerigo’s operations. These performance measures are not standardized financial measures under IFRS and, therefore, amounts presented may not be comparable to similar financial measures disclosed by other companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. (i) EBITDA refers to earnings before interest, taxes, depreciation, and administration and is calculated by adding back depreciation expense to the Company’s gross profit or loss.
(ii) Operating cash flow before changes in non-cash working capital is calculated by adding back the decrease or subtracting the increase in changes in non-cash working capital to or from cash provided by operating activities.
(iii) Free cash flow to equity (“FCFE”) refers to operating cash flow before changes in non-cash working capital less capital expenditures plus new debt issued less debt and lease repayments. FCFE represents the amount of cash generated by the Company in a reporting period that can be used to pay for: a) potential distributions to the Company’s shareholders, and b) any additional taxes triggered by the repatriation of funds from Chile to Canada to fund these distributions. Free cash flow (“FCF”) refers to FCFE plus repayments of borrowings and lease repayments.
(iv) Cash cost is a performance measure commonly used in the mining industry that is not defined under IFRS. Cash cost is the aggregate of smelting and refining charges, tolling/production costs net of inventory adjustments and administration costs, net of by-product credits. Cash cost per pound produced is based on pounds of copper produced and is calculated by dividing cash cost over the number of pounds of copper produced.
2 Dividend yield The disclosed annual yield of 12.4% is based on four quarterly dividends of Cdn$0.03 per share each, divided over Amerigo’s September 30, 2022 share price of Cdn$0.97. 3MVC’s copper price MVC’s copper price is the average notional copper price for the period, before smelting and refining, DET notional copper royalties, transportation costs and excluding settlement adjustments to prior period sales. MVC’s pricing terms are based on the average LME copper price for the third month following delivery of copper concentrates produced under the tolling agreement with DET (“M+3”). This means that when final copper prices are not yet known, they are provisionally marked-to-market at the end of each month based on the progression of the LME published average monthly M and M+3 prices. Provisional prices are adjusted monthly using this consistent methodology, until they are settled. Q2-2022 copper deliveries were marked-to-market at June 30, 2022 at $4.10/lb and were settled in Q3-2022 as follows: • April 2022 sales settled at the July 2022 LME average price of $3.41/lb • May 2022 sales settled at the August 2022 LME average price of $3.61/lb • June 2022 sales settled at the September 2022 LME average price of $3.51/lb Q3-2022 copper deliveries were marked-to-market at September 30, 2022 at $3.50/lb and will be settled at the LME average prices for October, November and December 2022.
Cautionary Statement on Forward-Looking Information This news release contains certain forward-looking information and statements as defined in applicable securities laws (collectively referred to as "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 is intended to identify forward-looking statements. These forward-looking statements include but are not limited to, statements concerning:
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, adverse weather conditions, 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. Notwithstanding the efforts of the Company and MVC, there can be no guarantee that the Company’s or MVC’s staff will not contract COVID-19 or that the Company’s and MVC’s measures to protect staff from COVID-19 will be effective. Many of these risks and uncertainties apply not only to the Company and its operations, but also to 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 in turn have a material effect on the Company. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such statements are based on several assumptions which may prove to be incorrect, including, but not limited to, assumptions about:
Future production levels and cost estimates assume there are no adverse mining or other events which significantly affect 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. We caution you that the foregoing list of important factors and assumptions is not exhaustive. Other events or circumstances could cause our actual results to differ materially from those estimated or projected and expressed in, or implied by, our forward-looking statements. You should also carefully 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 and except as required by law, we undertake no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise. Contact DetailsAurora Davidson, President and CEO +1 604-697-6207 Graham Farrell +1 416-842-9003 graham.farrell@harbor-access.com Company Websitehttp://www.amerigoresources.com/ News Source: News Direct
02.11.2022 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG. |
Language: | English |
Company: | Amerigo Resources Ltd |
United States | |
ISIN: | CA03074G1090 |
EQS News ID: | 1477527 |
End of News | EQS News Service |
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1477527 02.11.2022 CET/CEST