Amerigo earnings jump to $10-million (U.S.) in 2004
2005-02-18 09:57 ET - News Release
Mr. Jeffrey Giesbrecht reports
AMERIGO REPORTS EARNINGS OF US$11 MILLION IN 2004 UP FROM US$1.5 MILLION IN 2003
Amerigo Resources Ltd. has provided results of the year ended Dec. 31, 2004. Significant events are as follows:
Net earnings after tax for the year ended Dec. 31, 2004, were $10,941,198 (U.S.), 707 per cent higher from earnings of $1,546,502 (U.S.) in the 10 months ended Dec. 31, 2003. Earnings were higher due to higher copper prices and increased production.
Earnings per share for the year ended Dec. 31, 2004, were 17 U.S. cents non-diluted. In the same period cash flow from operations was $14,029,775 (U.S.).
Thirty-one million one hundred twenty thousand pounds of copper were produced in 2004, compared with 14.36 million pounds of copper produced in the period July to December, 2003, after MVC was acquired.
Cash costs before El Teniente royalty were higher at 69 U.S. cents per pound in 2004 compared with 57 U.S. cents in fiscal 2003. The cost increase is mainly due to higher power and steel prices and below-budget production, which result in higher costs per pound. Amerigo expects cash costs to improve as copper production increases.
Total costs after royalty, depreciation and accretion were 88 U.S. cents per pound in the year ended Dec. 31, 2004, compared with 63 U.S. cents in fiscal 2003. The increase is mainly due to higher royalty payments at higher copper prices.
Earnings per share were four U.S. cents for the three months ended Dec. 31, 2004. Cash flow per share was seven U.S. cents in the same period.
Cash balances increased to $8,239,089 (U.S.) at Dec. 31, 2004, after capital expenditures of $4,837,277 (U.S.) in the fourth quarter.
Production under budget -- lower sulphide grade material from El Teniente during the second quarter and third quarter contributed to production being below budget in 2004.
Recovery of tailings from Colihues was also below budget in the year. MVC started to self-operate the Colihues extraction pond in the fourth quarter following unsatisfactory performance by the subcontractor. Significant improvements are expected following the commissioning of new extraction equipment in the first quarter of 2005.
New agreement for increased Colihues extraction -- during the year MVC entered into an agreement in principle with El Teniente to increase the rate of agreed extraction of feed material from the Colihues deposition site from the present 10,000 tonnes per day to 45,000 tonnes per day. Through 2005 and 2006 the company expects to ramp up annual production capacity to approximately 65 million pounds of copper. The company is working with El Teniente to finalize a detailed agreement in the next few months.
Molybdenum plant commissioning ahead of schedule -- construction for the molybdenum plant is scheduled for completion in February, 2005, approximately three months ahead of schedule. Commissioning is expected to occur in March, 2005. Production in excess of 500,000 pounds of molybdenum in concentrates is anticipated for 2005, with an increase to 800,000 pounds to one million pounds in 2006. A three-year sales agreement will be signed on Feb. 22, 2005, with Molymet for a base treatment charge plus a price participation factor. A flat 10-per-cent royalty to Codelco will also be paid on MVC's net revenue received from the sale of molybdenum concentrates.
Warrants exercised -- subsequent to Dec. 31, 2004, and up to the date of this release, 4,273,000 of the company's stock purchase warrants were exercised for proceeds of $2,934,200, strengthening Amerigo's ability to finance continuing capital expenditures. The warrants had exercise prices ranging from 25 cents to 70 cents.
SELECTED FINANCIAL INFORMATION
(In U.S. dollars)
Year Ten months
ended ended
Dec. 31, Dec. 31,
2004 2003
Revenue $41,583,363 $12,243,150
Cost of sales 27,245,685 10,036,820
Other expenses 1,313,054 1,457,304
Non-operating
items (628,929) (219,878)
Income tax
expense, net of
(tax recoveries) 2,245,523 (766,337)
Minority interest 466,832 188,739
---------- ----------
Net earnings 10,941,198 1,546,502
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EPS -- basic 0.1726 0.0375
EPS -- diluted 0.1258 0.0254
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