MVC pushes Amerigo into the black

Vancouver — Copper producer Amerigo Resources (ARG-T) rode surging copper and molybdenum prices to post strong second quarter profits.

Amerigo reported earnings of US$4.6 million for the quarter ended June 30, up substantially from US$1.6 million in the corresponding quarter of 2004.

In light of the robust earnings, the company declared an interim dividend payment of 4.5 per share.

Copper production in the latest quarter amounted to 7.07 million lbs., down slightly from the 7.5 million lbs. in the first quarter of 2005, owing mostly to mechanical problems with the tailings extraction equipment at the Minera Valle Central (MVC) operation in Chile.

With early commissioning of its molybdenum circuit in May, production tallied to 156,000 lbs. for what was effectively two months of operation.

Credits from moly production contributed to lower overall cash costs, before the El Teniente royalty of US60 per lb. copper, versus US91 per lb. in the earlier quarter. Total costs (after royalties, depreciation and accretion) came in at US90 per lb., well below US$1.14 per lb. in the first quarter of 2005.

MVC has been producing copper concentrate for several years through the reprocessing of tailings from Codelco’s El Teniente mine in central Chile. Amerigo’s MVC operation is slated to produce 15,000 tonnes copper (33 million lbs.) and 600,000 lbs. molybdenum in 2005.