VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/24/13 -- Amerigo Resources Ltd. (TSX: ARG) ("Amerigo" or the "Company") announces operations and capital guidance for the year 2013 from Minera Valle Central ("MVC"), the Company's operations located near Rancagua, Chile.
Production in 2013 is anticipated to be between 45 and 50 million pounds of copper and one million pounds of molybdenum from the processing of both fresh tailings from El Teniente and historic tailings from Colihues. The Colihues material to be extracted in 2013 is projected to be lower grade than the material extracted in 2012 due to the fact that the area to be mined contains recent tailings deposited by El Teniente in 2006.
In 2013, MVC's copper concentrates will be sold to the smelter at the average LME market price for the month preceding delivery ("M-1") except for the January 2013 quota which is subject to pricing.at the average LME price of the month ("M").
Cash cost (the aggregate of smelting, refining and other charges, production costs net of molybdenum-related net benefits, administration and transportation costs) before El Teniente royalty is projected to be between $1.95/lb and $2.15/lb in 2013. The Company's contract with its power provider changed on January 1, 2013 from a variable to a much lower fixed rate. This change will contribute towards net savings over 2012 levels of approximately $0.40/lb, significantly improving MVC's operating cash flow.
Excluding the Cauquenes Project, 2013 capital expenditures at MVC are estimated to be approximately $7 million, which is significantly lower than the $22 million invested in 2012 and will positively impact the Company's cash resources.
Management anticipates the feasibility study and basic engineering work for the Cauquenes Project to be completed in Q2-2013 and, subject to the successful conclusion to negotiations with Codelco/El Teniente, a production decision made shortly thereafter. In the event MVC and Codelco/El Teniente are unable to reach a definitive agreement for the processing of tailings from Cauquenes, Codelco/El Teniente has agreed to reimburse permitting and engineering costs incurred by MVC for this stage of the project. The Cauquenes Project Environmental Impact Assessment study was filed with the Chilean authorities on January 7, 2013.
Dr. Klaus Zeitler, Amerigo's President and CEO, stated, "2013 will be a pivotal year for the Company, with significantly lower operating costs and replacement capital costs that we believe will reduce the Company's cash outlays by up to $35 million compared to 2012. We are also proceeding with optimization studies, permitting and engineering, and financing discussions for the Cauquenes project, which will extend our operations in Chile by decades. This will ensure MVC can start project development without delay once an agreement is reached with Codelco/El Teniente."
Amerigo Resources Ltd. produces copper and molybdenum under a long term partnership with the world's largest copper producer, Codelco, by means of processing fresh and old tailings from the world's largest underground copper mine, El Teniente near Santiago, Chile. Tel: (604) 681-2802; Fax: (604) 682-2802; Web: www.amerigoresources.com; Listing: (TSX: ARG)
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