Amerigo posts record earnings from Chilean operations

Vancouver – Robust copper prices pushed net earnings of Amerigo Resources (ARG-T) to a record US$12.4 million, or US$0.13 per share, in the latest quarter ended June 30. This represents a 168% increase from net earnings of US$4.6 million reported for the comparable period a year earlier.

Through wholly owned Chilean subsidiary Minera Valle Central (MVC), Amerigo produces copper and molybdenum concentrates from tailings generated from El Teniente, a 100-year-old copper mine owned and operated by state-owned Codelco.

Amerigo is presently treating fresh tailings from the large underground mine, which has reserves sufficient to last for many more decades. The company also has the right to treat higher-grade tailings from the Colihues tailing impoundment situated next to MVC’s processing facilities. The in situ tailings contained in this impoundment are estimated to total 200 million tonnes.

Amerigo produced 6.57 million lbs. of copper and 203,548 lbs. of molybdenum in the latest quarter, which represents a 31% increase in moly production and a 7% decrease for copper due to a temporary plant shutdown at El Teniente.

Cash costs increased in the latest quarter to US$0.90 per lb. copper (net of moly credits) from US$0.59 per lb. a year earlier, while total costs climbed to US$1.50 per lb. from US$0.89 per lb. over the same period.

Amerigo’s MVC operations produced almost 30 million lbs. copper and more than 680,000 lbs. of moly in 2005. Annualized production is projected to increase to about 60 million lbs. of copper and 1 million lbs. of moly by year-end 2007.

Amerigo eneded its latest quarter with a cash balance of US$18.96 million after US$5.8 million for capital expenditures and a US$1-million investment to increase its interest in Chariot Resources (CHD-T) to about 17% of Chariot’s issued and outstanding shares. Chariot is developing the Mina Justa deposit at its 70%-owned Marcona copper project in Peru.