Business
Molybdenum plant commissioned ahead of schedule - One-off operating events impact bottomline earnings
Molybdenum plant commissioned ahead of schedule - One-off operating events impact bottomline earnings.
About this update from Amerigo Resources Ltd
[{"type":"text","content":"\n\n\n\n\nVANCOUVER, May 6 /CNW/ - AMERIGO RESOURCES LTD. (Vancouver, British\nColumbia) reported results of the three-month period ended March 31, 2005\ntoday. Significant events are as follows:\n\n- Net earnings after tax for the quarter ended March 31, 2005 were\n US$1,644,722 compared to earnings of $2,578,907 in the immediately\n preceding quarter.\n\n Earnings were impacted by an annual charge of US$504,760 for\n stock-based compensation, as prescribed under a recently enacted\n accounting standard. This is a non-cash expense to the Company arising\n from the annual stock option grant to employees, officers and\n directors. Net earnings for the quarter ended March 31, 2005 before\n stock-based compensation were $2,149,482, compared to earnings of\n $2,578,907 in the immediately preceding quarter.\n\n Earnings were also impacted by the following one-off operating events:\n\n - 9 days downtime due to El Teniente maintenance shutdown in January\n\n - Shell failure in Mill no. 4 resulted in reduced grinding capacity\n and lower recoveries for 2 weeks\n\n - Flotation cells taken offline to install new aeration equipment as\n part of expansion to optimize future recoveries\n\n - Below budget Colihues extraction due to late delivery of new\n extraction equipment\n\n- Production under budget - Despite the one-off events mentioned above,\n production was down by only 14% compared to the previous quarter and\n 11% higher than Q1-2004 production. Copper produced in Q1-2005 was\n 7.50 million pounds, compared to 6.78 million pounds of copper\n produced in Q1-2004.\n\n- Cash costs before El Teniente royalty were higher at US$0.91 per pound\n in Q1 - 2005 compared to US$0.76 in the preceding quarter and US$0.64\n in Q1-2004. Lower production and a high percentage of fixed costs\n result in higher cash cost per pound.\n\n Cost increases are also due to higher energy and steel costs, and\n significantly higher smelter and refinery charges in 2005 consistent\n with industry-wide increases to treatment, refining and shipping\n charges. Smelter and refinery charges were US$0.35/lb in the quarter,\n compared to an average cost of US$0.20/lb in 2004. Since MVC does not\n ship concentrate overseas, smelter and refinery charges include the\n participation by the smelter in MVC's cost savings for shipping.\n\n MVC management also took the opportu...