Earnings of US$39.3 million in 2006 up 119% from 2005
Earnings per share are US42 cents up from EPS of US23 cents in 2005
Cash flow from operations of US$26.6M in 2006
VANCOUVER, Feb. 21 /CNW/ - Amerigo Resources Ltd. (TSX:ARG) ("Amerigo" or the "Company") reported results for the year ended December 31, 2006 today. Significant events are as follows:
- Net earnings after tax for the year ended December 31, 2006 were
$39,283,683, 119% higher than earnings of $17,992,467 in 2005 due to
higher copper prices more than offsetting lower production and profit
from the sale of a strategic investment. Despite production
restrictions imposed by El Teniente, 2006 is an record earnings year
for Amerigo.
- Earnings per share for the year were 42 cents, compared to earnings
per share of 23 cents in 2005.
- Cash flow from operating activities was $26,576,910 or 29 cents per
share in 2006, compared to $21,874,229 or 28 cents per share in 2005.
- Production in 2006 was 24.67 million pounds of copper and
674,549 pounds of molybdenum, a copper production decrease of 17% due
to restricted tailings flow and various temporary plant shutdowns
imposed by El Teniente. Molybdenum production increased 7% due to a
full year of molybdenum production.
- Gross copper selling price was $3.33/lb after settlement adjustments,
compared to an LME average price of $3.05/lb during the year.
Realized copper price (copper revenue net of smelter and refinery
charges and including settlement adjustments to prior year sales
divided by copper pounds sold in the year) was $2.74/lb.
- Cash cost (the aggregate of smelter, refinery and other charges,
production costs net of molybdenum-related net benefits,
administration and transportation costs) before El Teniente royalty
was $1.20/lb in 2006, compared to 60 cents/lb in 2005. The increase
in cash cost was caused by lower copper production due to production
constraints, higher smelter and refinery costs due to the effect of
copper price participation with the smelter and higher power, steel
and maintenance costs.
- Total cost (the aggregate of cash cost, El Teniente royalty, MVC
stock-based compensation, depreciation and accretion) for the year
ended December 31, 2006 was $1.80/lb compared to 94 cents/lb in 2005.
The increase in total cost was driven by higher cash costs and higher
royalty payments to El Teniente caused by higher copper prices.
- Capital plant expenditures for the construction of two thickeners and
an industrial water recovery system required to meet Chilean
environmental regulations and for the final stages of the MVC plant
expansion were $31,943,881 in 2006, funded substantially from
operating cash flow.
- Cash balance was $26,574,059 at December 31, 2006 after $27,890,637
of cash payments for capital expenditures, dividend payments of
$7,449,203 and the repayment in full of a $3,736,979 note and
interest that was issued in 2003 in connection with the acquisition
of MVC.
- Dividend - In accordance with Amerigo's stated policy, two semi-
annual dividends of Cdn 4.5 cents per share each were paid in 2006,
for aggregate dividends of $7,449,203.
- Determination of dividend - Amerigo's Board of Directors will
consider and resolve on the level of the next semi-annual dividend at
its scheduled February 24, 2007 meeting.
- Cash and marketable securities are $27,581,427 at the date of this
report.
The information in this news release and the Selected Financial Information contained in the following page should be read in conjunction with the Audited Consolidated Financial Statements and Management Discussion and Analysis for the year ended December 31, 2006, which will be available at the Company's website at www.amerigoresources.com and at www.sedar.com.
-------------------------------
Amerigo Resources Ltd. is a Canadian junior company producing copper and molybdenum from its MVC operations near Santiago, Chile. Tel: (604) 681-2802; Fax: (604) 682-2802; Web: www.amerigoresources.com; Listing: ARG:TSX.
The Toronto Stock Exchange has not reviewed nor accepted responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management. Statements contained in this news release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties are detailed in the Company's filings with the TSX and on SEDAR. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other factors, should change.
AMERIGO RESOURCES LIMITED
SELECTED FINANCIAL INFORMATION
YEARS ENDED DECEMBER 31, 2006 and 2005
All figures are in US Dollars
Consolidated Balance Sheets
December 31, December 31,
2006 2005
$ $
----------------------------
Cash and cash equivalents 26,574,059 12,953,516
Mineral property, plant and equipment 83,414,103 52,725,600
Other assets 24,315,886 21,560,334
----------------------------
Total assets 134,304,048 87,239,450
----------------------------
----------------------------
Total liabilities 23,938,019 23,948,597
Shareholders' equity 110,366,029 63,290,853
----------------------------
Total liabilities and shareholders' equity 134,304,048 87,239,450
----------------------------
----------------------------
Consolidated Statements of Operations
Year ended Year ended
December 31, December 31,
2006 2005
$ $
----------------------------
Total revenue, net of smelter
and refinery charges 84,205,285 58,328,082
Cost of sales 45,735,527 36,173,834
Other expenses 3,140,918 2,025,005
Non-operating items (10,097,629) (2,873,344)
Income tax expense 5,690,569 4,390,854
Minority Interest 452,217 619,266
----------------------------
Net earnings 39,283,683 17,992,467
----------------------------
----------------------------
EPS - Basic 0.42 0.23
EPS - Diluted 0.42 0.20
Consolidated Statements of Cash Flows
Year ended Year ended
December 31, December 31,
2006 2005
$ $
----------------------------
Net cash provided by operating activities 26,576,910 21,874,229
Net cash used in investing activities (20,341,145) (26,682,309)
Net cash received from financing activities 6,915,814 9,512,174
Miscellaneous 468,964 10,333
----------------------------
Net cash inflow during the year 13,620,543 4,714,427
----------------------------
----------------------------