Amerigo Reports Q3-2020 Production Results

VANCOUVER, British Columbia, Oct. 16, 2020 (GLOBE NEWSWIRE) — Amerigo Resources Ltd. (“Amerigo” or the “Company”) (TSX: ARG) is pleased to announce Q3-2020 production results from Minera Valle Central (“MVC”), the Company’s 100% owned operation located near Rancagua, Chile.

MVC produced 14.7 million pounds (“M lbs”) of copper at a cash cost of US$1.80 per pound (“/lb”) and 0.4 M lbs of molybdenum.

MVC’s copper production from fresh and Cauquenes tailings increased 13% compared to Q2-2020 and was 9% higher than the Q3-2020 guidance provided in the Q2-2020 production results.

Q3-2020 copper production was positively impacted by an increase in tonnage processed at Cauquenes as more water became available in MVC following a return to almost normal rainfall levels. MVC had reduced Cauquenes tonnage processing in February 2020 in response to severe drought conditions then present in central Chile.

In Q3-2020, processing rates averaged 119,285 tonnes per day (“TPD”) for fresh tailings and 55,216 TPD for Cauquenes, higher than expected in both cases. Copper grade in fresh tailings and Cauquenes copper recovery were slightly higher than expected. Operating days in Q3-2020 were 92/92 for fresh tailings and 79/92 for Cauquenes, where 13 days of operation were lost in July due to strong rainfall.

Q3-2020 cash cost was US$1.80/lb, US$0.08/lb higher than cash cost in Q2-2020 and US$0.24/lb higher than guidance. Cash cost in Q3-2020 included $0.02/lb of one-time labour costs from severance paid to MVC workers. 7 positions were permanently eliminated. Other factors affecting cash cost compared to guidance included an increase of approximately US$0.04/lb from the appreciation of the Chilean peso against the U.S. dollar on a quarter average basis, US$0.04/lb from lower molybdenum credits due to lower than expected molybdenum prices and production and $0.14/lb in aggregate from higher than anticipated power, lime, industrial water and Cauquenes processing costs.

MVC’s operations continued through Q3-2020 without any significant disruptions due to Covid-19.

Production results for the most recent five quarters are summarized below:

Water reserves at Colihues increased from a low point of 300,000 cubic meters earlier in 2020 to 10 million cubic meters, a level not seen since January 2018. These existent water reserves are sufficient for MVC to maintain Cauquenes tonnage processing into H1-2021.

The following figure shows the levels of water reserves at Colihues since January 2017: