Amerigo goes for moly

Vancouver — Soaring molybdenum prices have induced Amerigo Resources (ARG-T) to add facilities to recover the metal at its Minera Valle Central plant, near Santiago, Chile.

Construction is expected to last six months at a total cost of US$2.1 million. The operation will use existing equipment and infrastructure.

Amerigo recovers copper from tailings at the El Teniente mine, owned by Corporacion Nacional del Cobre de Chile (CODELCO). El Teniente’s copper ore also contains molybdenum.

The junior plans to produce 700,000 lbs. moly per year at an operating cost of US$2 per lb. The current world price of molybdenum oxide is about US$16 per lb. Production plans are based on a 5-year average price of US$4.20 per lb.

Amerigo currently produces an average of 140 tonnes of concentrate daily, containing 29.8% copper and 0.894% moly.

In operation since 1904, El Teniente has a reserve in excess of 3 billion tonnes, sufficient for more than 60 years at present rates. The mine produces about 90,000 tonnes of ore daily at an average grade of 1.16% copper. It is expected the operation will produce 1.14 billion tonnes of tailings over the next 25 years averaging 0.112% total copper.

Molybdenum prices have risen dramatically this year, owing to supply shortages and surging Chinese demand. The metal is used predominantly in the steel industry as a hardening alloy.

Amerigo has 62.8 million shares outstanding.