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Earnings of US$8.3 million in Q3-2006 up 27% from Q3-2005
despite El Teniente production restraints
Earnings per share are US9 cents up from EPS of US8 cents in Q3-2005
Cash flow from operations of US$8.4M in Q3-2006
US$3.8M dividend payment in September 2006
VANCOUVER, Nov. 1 /CNW/ - Amerigo Resources Ltd. (TSX:ARG) ("Amerigo" or
the "Company") reported results for the quarter ended September 30, 2006
today. Significant events are as follows:
- Net earnings after tax for the quarter ended September 30, 2006 were
US$8,251,071, 27% higher than earnings of US$6,503,415 in Q3-2005 due
to a combination of higher copper prices offsetting lower production.
Even with production restrictions imposed by El Teniente, Q3-2006
results were an earnings record for the third quarter.
- Earnings per share for the quarter ended September 30, 2006 were
US9 cents non-diluted, compared to earnings per share of US8 cents
in Q3-2005.
- Cash flow from operations was US$8,390,718 or US9 cents per share in
Q3-2006, compared to cash flow from operations of US$7,768,731 or
US9 cents in Q3-2005.
- Production in Q3-2006 was 4.72 million pounds of copper and
163,497 pounds of molybdenum, a production decrease of 38% in copper
and 29% in molybdenum from Q3-2005 due to ongoing restricted tailings
flow and various temporary plant shutdowns imposed by El Teniente.
- Gross copper selling price was US$3.67/lb after settlement
adjustments, compared to an LME average of US$3.48/lb during the
quarter. Realized copper price (copper revenue net of smelter and
refinery charges and including settlement adjustments to prior
quarter sales divided by copper pounds sold in the quarter) was
US$3.04/lb.
- Cash costs (the aggregate of smelter, refinery and other charges,
production costs net of molybdenum-related net benefits,
administration and transportation costs) before El Teniente royalty
were US$1.03/lb in Q3-2006, compared to cash costs of US$0.22/lb in
Q3-2005. The increase in cash costs 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 production and maintenance costs overall.
- Total costs (the aggregate of cash costs, El Teniente royalty, MVC
stock-based compensation, depreciation and accretion) for the quarter
ended September 30, 2006 were US$1.84/lb compared to US$0.57/lb in
Q3-2005. The increase in total costs was driven by higher smelter and
refinery charges and higher royalty payments to El Teniente, both
related to higher copper prices.
- Capital plant expenditures mainly for the construction of two
thickeners and an industrial water recovery system required to meet
Chilean environmental regulations were US$9,946,500 in Q3-2006,
funded substantially from operating cash flow.
- Cash balance was US$12,562,294 at September 30, 2006 after
US$9,946,500 of capital expenditures, a dividend payment of
US$3,818,896 and an increase in Amerigo's strategic investment in
Chariot Resources Limited "Chariot") of US$1,170,263, which increased
Amerigo's interest in Chariot to approximately 18% of Chariot's
issued and outstanding share capital as at September 30, 2006.
- Dividend - In accordance with Amerigo's stated dividend policy, on
September 1, 2006 a dividend of US$3,818,896 or CDN 4.5 cents per
share was paid to shareholders of record as of August 18, 2006.
Amerigo has paid aggregate dividends of US$7,449,203 in 2006.
- Subsequent event - A gain on sale of investment of US$8,530,377
(CDN$9,679,857) was realized on the sale of 31,812,500 Chariot common
shares and 11,532,000 Chariot warrants on October 20, 2006. The gain
will be recognized in earnings in Q4-2006.
- Cash and marketable securities are US$32M 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 Consolidated Financial Statements and Management Discussion and Analysis
for the quarter ended September 30, 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
QUARTERS ENDED SEPTEMBER 30, 2006 and 2005
All figures are in US Dollars
Consolidated Balance Sheets
September 30, December 31,
2006 2005
$ $
------------------------------
Cash and cash equivalents 12,562,294 12,953,516
Mineral property, plant and equipment 74,011,180 52,725,600
Total assets 121,176,849 87,239,450
------------------------------
------------------------------
Total liabilities 24,032,641 23,948,597
Shareholders' equity 97,144,208 63,290,853
------------------------------
Total liabilities and shareholders' equity 121,176,849 87,239,450
------------------------------
------------------------------
Consolidated Statements of Operations
Qtr ended Qtr ended
September 30, September 30,
2006 2005
$ $
------------------------------
Total revenue, net of smelter and refinery
charges 19,739,861 17,702,172
Cost of sales 10,151,182 9,551,278
Other expenses 819,217 288,278
Non-operating items (1,063,069) (1,234,036)
Income tax expense 1,492,571 2,418,269
Minority Interest 88,889 174,968
------------------------------
Net earnings 8,251,071 6,503,415
------------------------------
------------------------------
EPS - Basic 0.0877 0.0757
EPS - Diluted 0.0868 0.0735
Consolidated Statements of Cash Flows
Qtr ended Qtr ended
September 30, September 30,
2006 2005
$ $
------------------------------
Net cash provided by operating activities 8,390,718 7,768,731
Net cash used in investing activities (11,384,963) (8,197,486)
Net cash used in financing activities (3,706,868) (2,751,214)
>>
