Amerigo Resources Ltd · TSX:ARG
Amerigo Resources — Investor Presentation (March 2023)
28 slides from Amerigo Resources's investor presentation, March 2023
Slide 1: Producing critical materials from waste – Sustainable copper for the green economy
Producing critical materials from waste – Sustainable copper for the green economy March 2023 TSX: ARG | OTCQX: ARREF
Slide 2: Forward Looking Information
Forward Looking Information ALL REFERENCES TO DOLLARS ARE US DOLLARS, UNLESS encountered in the permitting and development of mineral projects such as OTHERWISE INDICATED unusual or unexpected geological formations, negotiations with government and other third parties, unanticipated metallurgical di
Slide 3: Forward Looking Information
Forward Looking Information ALL REFERENCES TO DOLLARS ARE US DOLLARS, UNLESS OTHERWISE • tax benefits and tax rates; INDICATED • the outcome of our copper concentrate sales and treatment and refining charge negotiations; Actual results and developments are likely to differ, and may differ materially
Slide 4: Value Proposition
Value Proposition We recover copper in a “copper factory” Simple and sustainable business model; predictable operations and cash flow We pay a consistent yield with performance kickers Current yield: 7.5% on regular dividends(based on February 28, 2023, share price) We are opening relationships with
Slide 5: Corporate Structure
Corporate Structure CAPITALIZATION SHAREHOLDERS Shares outstanding2 165.9 M Retail Investors 11% Management & Options2 (average exercise price Cdn$1.22) 12.6 M Board 22% Share price2 Cdn$1.60 Aegis Market cap2 $193.7 M Financial Corp. Other Institutional 14% Yield2 7.5% Investors 53% Capital Returne
Slide 6: What We Do
What We Do We capture lost value through our operational excellence We provide critical building blocks for the green economy We eliminate the world’s need for a 30,000 TPA copper mine
Slide 7: How do we do it?
How do we do it? We receive We process the We get market We return profits waste streams waste streams to prices for the to shareholders. from one of recover copper recovered copper Chile’s largest and molybdenum and molybdenum copper mines 7
Slide 8: Amerigo is essentially a wastewater treatment plant
Amerigo is essentially a wastewater treatment plant – both are simple and proven technologies What is the wastewater treatment process? What is the Amerigo process? The Amerigo concentrator plant treats waste material An activated sludge treatment plant treats wastewater from a copper mine to produc
Slide 9: Amerigo's Comparatives to Wastewater Treatment Companies
Amerigo’s Comparatives to Wastewater Treatment Companies United Utilities PLC (4.22% yield) Amerigo Veolia (3.67% yield) (7.5% 4yield) Profitability derived from urbanization & Profitability derived from current lack of freshwater resources demand for critical materials Profitability constrained by
Slide 10: Our ESG Credentials (Established and Bona fide)
Our ESG Credentials (Established and Bona fide) Circular Economy Capturing lost value of critical materials Local Employment 1,100+ direct jobs in Chile Diversity Diverse Board and C-Suite representation Energy Renewable powered operations Environment Reduction of third-party environmental
Slide 11: We are not a Mining Company
We are not a Mining Company We have no environmental liabilities We do not explore for future reserves We employ no geologists We have minimal sustaining Capex We eliminate the world’s need for a 30,000 TPA copper mine 11
Slide 12: Chile
Copper is the “salary of Chile” – building block of the economy and social contract Operations located Amerigo has a 30- in Chile, the world’s year strategic leading copper relationship with producer Codelco’s El Teniente mine Chile Minimal Jurisdictional Codelco is Chile’s Risk state-owned copper A
Slide 13: We have Inexhaustible Material to Process
We have Inexhaustible Material to Process El Teniente began operating in 1905 Amerigo processes the daily waste material from the world’s largest underground copper mine – El Teniente El Teniente’s current life of mine is projected to run to 2082 Long-term strategic agreement to continue processing
Slide 14: Looking for Similar Opportunities
Looking for Similar Opportunities We are always We would We have proven Until we find the looking to prefer to operational/business right opportunity, replicate our expand with experience to capital goes to success at El our existing expand shareholders Teniente partner 14
Slide 15: A Simple Capital Return Model With Many Tools
A Simple Capital Return Model With Many Tools Quarterly dividends As we do not require (safe, predictable, growth capital, we will paid each quarter) continue to return capital to shareholders Performance dividends (flexible in all aspects) Share buybacks (Normal Course Issuer Bids, Substantial Bids
Slide 16: Foundations of the Capital Return Model
Foundations of the Capital Return Model • Return capital to shareholders when growth capital is not required • Use multiple tools to consistently and flexibly return capital to shareholders • Provide utility-like yields with kickers at higher product prices • Opportunistically reduce shares outstand
Slide 17: Pure Copper Play – High Leverage to Copper Prices
Pure Copper Play – High Leverage to Copper Prices Assumptions for 2023 Production Guidance (62.3 M lbs copper production) 1 Copper price ($/lb) 3.60 3.90 4.10 4.30 4.50 4.80 EBITDA2 ($M) 33.8 39.8 45.5 50.9 56.3 64.0 17 FCFE2 ($M) - 1.8 5.9 9.8 13.8 19.4 1 Excludes the effect of settlement adjustmen
Slide 18: Copper is Key to the Energy Transition
Copper prices may fluctuate – but since 2000 volatility has been at higher highs and higher lows Copper is Key to the Energy Transition In 2023, average $3.80/lb. copper prices guarantee regular quarterly dividends In 2023, average copper prices over $3.80/lb. enable share buybacks and/or performanc
Slide 19: Copper Price Volatility Does not Impact Quarterly Dividend
Copper Price Volatility Does not Impact Quarterly Dividend Amerigo Over a two-year Periods of copper price shareholders are timeframe, volatility weakness present immune to copper around the average opportunities for price volatility and copper price will investors to boost the its effects on not af
Slide 20: A Superlative Inflation Hedge
A Superlative Inflation Hedge Copper has historically performed as an excellent hedge against inflation. Why would it be different this time? 20
Slide 21: In Search of Yield?
In Search of Yield? High-Dividend Stocks in S&P 500 Amerigo provides an alternative to high-yield companies across Williams Cos. Inc. 5.95% Industries. Kinder Morgan Inc. 6.51% AT&T 5.87% Vanguard Utilities Index Fund Oneok Inc. 5.84% 2.96% Simon Property Group Inc. 5.90% Russell 2000 ETF Vornado Re
Slide 22: Summary
Summary Amerigo has invested +$300M to provide best-of-breed capital returns to shareholders - minimal ongoing Capex required Simple business model with world-class strategic partner Virtually inexhaustible access to source of input material Our operations reduce ongoing and historical envir
Slide 23: Appendices
Appendices TSX: ARG | OTCQX: ARREF
Slide 24: Management
Management Aurora Davidson Dr. Klaus Zeitler Carmen Amezquita Christian Cáceres President, CEO & Director Executive Chairman & Director Chief Financial Officer General Manager, MVC Ms. Davidson has been with Amerigo Dr. Zeitler founded Amerigo in 2003. He Ms. Amezquita is a Chartered Mr. Cáceres is
Slide 25: Directors
Directors Dr. Klaus Zeitler Robert Gayton George Ireland Alberto Salas Executive Chairman & Director Lead Independent Director Director Director Dr. Zeitler founded Amerigo in 2003. He Dr. Gayton, FCDA (FCA) is a Chartered George Ireland has almost 40 years of Alberto Salas is a mining entrepreneur,
Slide 26: Water Supply – A Managed and Controlled Risk
Water Supply – A Managed and Controlled Risk Chile has been facing drought conditions in recent years Amerigo has taken steps to mitigate water supply risk and has sufficient water reserves to operate at least for the next 18 months without curtailing operations Multiple sources of water: water from
Slide 27: El Teniente Royalties
El Teniente Royalties ($/lb) Sliding scale tied to copper prices Cu price Royalty $ 3.00 $ 0.71 Cu price Royalty Royalty ($/lb) factor ($/lb) $ 3.20 $ 0.79 Fresh tailings $ 1.95 13.5% $ 0.26 $ 3.40 $ 0.88 $ 4.80 28.4% $ 1.36 $ 3.50 $ 0.92 Cauquenes $ 1.95 16% $ 0.31 $ 3.60 $ 0.97 $ 5.50 39% $ 2.15
Slide 28: Moly by-product credit
Moly by-product credit ($/lb) MVC produces molybdenum as a by- Moly price Credit to Cash Cost product (2023 guidance: 1.0 M lbs) $ 14.00 $ (0.19) When talking about cash cost (a non- $ 16.00 $ (0.21) GAAP measure) moly is considered a $ 18.00 $ (0.24) “credit” to cash cost $ 20.00 $ (0.27) $ 22.
Amerigo Resources — Investor Presentation (March 2023) on 6ix