VANCOUVER, May 6 /CNW/ - AMERIGO RESOURCES LTD. (Vancouver, British
Columbia) reported results of the three-month period ended March 31, 2005
today. Significant events are as follows:
- Net earnings after tax for the quarter ended March 31, 2005 were
US$1,644,722 compared to earnings of $2,578,907 in the immediately
preceding quarter.
Earnings were impacted by an annual charge of US$504,760 for
stock-based compensation, as prescribed under a recently enacted
accounting standard. This is a non-cash expense to the Company arising
from the annual stock option grant to employees, officers and
directors. Net earnings for the quarter ended March 31, 2005 before
stock-based compensation were $2,149,482, compared to earnings of
$2,578,907 in the immediately preceding quarter.
Earnings were also impacted by the following one-off operating events:
- 9 days downtime due to El Teniente maintenance shutdown in January
- Shell failure in Mill no. 4 resulted in reduced grinding capacity
and lower recoveries for 2 weeks
- Flotation cells taken offline to install new aeration equipment as
part of expansion to optimize future recoveries
- Below budget Colihues extraction due to late delivery of new
extraction equipment
- Production under budget - Despite the one-off events mentioned above,
production was down by only 14% compared to the previous quarter and
11% higher than Q1-2004 production. Copper produced in Q1-2005 was
7.50 million pounds, compared to 6.78 million pounds of copper
produced in Q1-2004.
- Cash costs before El Teniente royalty were higher at US$0.91 per pound
in Q1 - 2005 compared to US$0.76 in the preceding quarter and US$0.64
in Q1-2004. Lower production and a high percentage of fixed costs
result in higher cash cost per pound.
Cost increases are also due to higher energy and steel costs, and
significantly higher smelter and refinery charges in 2005 consistent
with industry-wide increases to treatment, refining and shipping
charges. Smelter and refinery charges were US$0.35/lb in the quarter,
compared to an average cost of US$0.20/lb in 2004. Since MVC does not
ship concentrate overseas, smelter and refinery charges include the
participation by the smelter in MVC's cost savings for shipping.
MVC management also took the opportunity offered by the El Teniente
shutdown to undertake annual maintenance of the MVC plant.
Accordingly, maintenance costs of US$0.15/lb are 27% above budget.
Maintenance costs per pound are expected to decrease in subsequent
quarters as a result of the "upfront" maintenance undertaken in Q1.
Total costs after royalty, depreciation and accretion were US$1.14 per
pound in the quarter ended March 31, 2005 compared to US$0.98 in the
preceding quarter and US$0.80 in Q1-2004. Contributing to the total
cost increase are higher royalty payments at higher copper prices.
The outlook for the remainder of the year should see lower operating
costs per pound due to higher expected production related to the plant
expansion and the benefit of molybdenum production as a by-product
credit.
- Cash balances increased to US$8,812,296 at March 31, 2005 after
capital expenditures of US$4,517,658 in Q1-2005 related to the copper
plant expansion and the molybdenum plant.
- Molybdenum plant completed in the quarter - Construction for the
molybdenum plant was completed on March 2005, 3 months ahead of
schedule. Production of saleable molybdenum concentrate started during
the commissioning phase in April 2005 and is expected to be in excess
of 500,000 pounds of molybdenum in concentrates in 2005, with an
increase to 800,000 to 1,000,000 pounds in 2006.
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 period ended March 31, 2005, which will be available at the Company's
website at www.amerigoresources.com and at www.sedar.com.
----------------------------
Amerigo Resources Ltd. is a Canadian copper and molybdenum producing
company forecasting 18,000 tonnes of copper production and 500,000 pounds of
molybdenum in 2005 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
THREE MONTHS ENDED MARCH 31, 2005 AND 2004
All figures are in US Dollars
Consolidated Balance Sheets
March 31, December 31,
2005 2004
$ $
--------------------------
Cash and cash equivalents 8,812,296 8,239,089
Mineral property, plant and equipment 38,699,872 34,479,801
Total assets 53,480,049 48,469,945
--------------------------
--------------------------
Total liabilities 10,588,322 11,067,001
Shareholders' equity 42,891,727 37,402,944
Total liabilities and shareholders' equity 53,480,049 48,469,945
--------------------------
--------------------------
Consolidated Statements of Operations
Three months Three months
ended ended
March 31, March 31,
2005 2004
$ $
--------------------------
Copper sales, gross 11,070,612 10,238,720
Net revenue 8,414,409 9,056,109
Cost of sales 5,897,027 4,361,182
Other expenses 788,838 415,011
Non-operating items (271,573) 158,269
Income tax expense, net of recoveries 243,176 243,760
Minority Interest 112,219 101,705
--------------------------
Net earnings 1,644,722 3,776,182
--------------------------
--------------------------
EPS - Basic 0.0237 0.0613
EPS - Diluted 0.0186 0.0435
Consolidated Statements of Cash Flows
Three months Three months
ended ended
March 31, March 31,
2005 2004
$ $
--------------------------
Net cash provided by operating activities 1,765,989 2,166,247
Net cash used in investing activities (4,517,658) (1,113,878)
Net cash provided by (used in) financing
activities 3,368,939 (210,679)
>>
