Q1-2024 net income of $4.3 million
Quarterly EBITDA1 of $13.6 million – free cash flow to equity1 of $7.3 million
Current copper prices substantially above Q1-2024 average
Quarterly dividend of Cdn$0.03 per share declared, representing a 7.7% yield3
Amerigo Resources Ltd. (TSX: ARG) (OTCQX: ARREF) is pleased to announce financial results for the three months ended March 31, 2024. Dollar amounts in this news release are in U.S. dollars unless indicated otherwise.
Amerigo’s Q1-2024 financial results included net income of $4.3 million, earnings per share of $0.03, EBITDA1 of $13.6 million and free cash flow to equity1 of $7.3 million. In Q1-2024, Amerigo returned $3.7 million to shareholders2.
“We are pleased to report a strong operational first quarter, with production trending over guidance and excellent cost management at MVC. During the first quarter, our average copper price was $3.95 per pound, and we generated free cash flow to equity of $7.3 million. Since the end of the quarter, copper prices have substantially appreciated, confirming our long-standing view on the strength of copper supply and demand fundamentals,” said Aurora Davidson, Amerigo’s President and CEO.
“Amerigo’s Capital Return Policy has the tools to return surplus cash to shareholders in a timely manner. As stated last quarter, we are growing cash balances to our desired target level. This cash rebuild is accelerating under current copper prices, where the latest spot copper prices exceed our Q1-2024 provisional price by $0.50 per pound. With respect to our first quarter results, Amerigo’s Board of Directors declared another quarterly dividend of Cdn$0.03 per share,” she added.
On May 6, 2024, Amerigo’s Board of Directors declared its eleventh consecutive quarterly dividend. The dividend will be in the amount of Cdn$0.03 per share, payable on June 20, 2024, to shareholders of record as of May 30, 20244. Amerigo designates the entire amount of this taxable dividend to be an “eligible dividend” for purposes of the Income Tax Act (Canada), as amended from time to time. Based on Amerigo’s March 31, 2024, share closing price of Cdn$1.55, this represents an annual dividend yield of 7.7%3.
This news release should be read with Amerigo’s interim consolidated financial statements and Management’s Discussion and Analysis for Q1-2024, available on the Company’s website at www.amerigoresources.com and on the SEDAR+ website at www.sedarplus.ca.
Q1-2024 | Q1-2023 | ||||
MVC’s copper price ($/lb)4 | 3.95 | 4.02 | |||
Revenue ($ millions) | 44.9 | 52.6 | |||
Net income ($ millions) | 4.3 | 9.1 | |||
EPS ($) | 0.03 | 0.05 | |||
EPS (Cdn) | 0.03 | 0.07 | |||
EBITDA1($ millions) | 13.6 | 18.5 | |||
Operating cash flow before changes in non-cash working capital1($ millions) | 10.2 | 13.2 | |||
FCFE1($ millions) | 7.3 | 8.6 | |||
March 31, 2024 | Dec. 31, 2023 | ||||
Cash ($ millions) | 13.8 | 16.2 | |||
Restricted cash ($ millions) | 6.2 | 6.3 | |||
Borrowings ($ millions) | 19.0 | 20.7 | |||
Shares outstanding at end of period (millions) | 165.4 | 164.8 | |||
Highlights and Significant Items
About Amerigo and Minera Valle Central
Amerigo Resources Ltd. is an innovative copper producer with a long-term relationship with Corporación Nacional del Cobre de Chile, the world’s largest copper producer.
Amerigo produces copper concentrate, and molybdenum concentrate as a by-product at the MVC operation in Chile by processing fresh and historic tailings from Codelco’s El Teniente mine, the world’s largest underground copper mine.
Summary Consolidated Statements of Financial Position | ||
March 31, | December 31, | |
2024 | 2023 | |
$ thousands | $ thousands | |
Cash and cash equivalents | 13,801 | 16,248 |
Restricted cash | 6,214 | 6,282 |
Property plant and equipment | 151,274 | 156,002 |
Other assets | 28,348 | 21,027 |
Total assets | 199,637 | 199,559 |
Total liabilities | 93,805 | 94,706 |
Shareholders’ equity | 105,832 | 104,853 |
Total liabilities and shareholders’ equity | 199,637 | 199,559 |
Summary Consolidated Statements of Income and Comprehensive Income | ||
Three months ended March 31, | ||
2024 | 2023 | |
$ thousands | $ thousands | |
Revenue | 44,921 | 52,648 |
Tolling and production costs | (37,116) | (39,170) |
Other expenses | (1,329) | (36) |
Finance expense | (503) | (827) |
Income tax expense | (1,701) | (3,530) |
Net income | 4,272 | 9,085 |
Other comprehensive income (loss) | 9 | (163) |
Comprehensive income | 4,281 | 8,922 |
Earnings per share – basic & diluted | 0.03 | 0.05 |
Summary Consolidated Statements of Cash Flows | ||
Three months ended March 31, | ||
2024 | 2023 | |
$ thousands | $ thousands | |
Cash flow from operating acitivities | 10,189 | 13,192 |
Changes in non-cash working capital | (5,654) | 5,008 |
Net cash from operating activities | 4,535 | 18,200 |
Net cash used in investing acitivities | (1,129) | (4,383) |
Net cash used in financing acitivites | (5,263) | (7,717) |
Net (decrease) increase in cash and cash equivalents | (1,857) | 6,100 |
Effect of foreign exchange rates on cash | (590) | 2 |
Cash and cash equivalents, beginning of period | 16,248 | 37,821 |
Cash and cash equivalents, end of period | 13,801 | 43,923 |
1 Non-IFRS Measures
This news release includes five non-IFRS measures: (i) EBITDA, (ii) operating cash flow before changes in non-cash working capital, (iii) free cash flow to equity, (iv) free cash flow and (v) cash cost.
These non-IFRS performance measures are included in this news release because they provide key performance measures used by management to monitor operating performance, assess corporate performance, and plan and assess the overall effectiveness and efficiency of Amerigo’s operations. These performance measures are not standardized financial measures under International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”), and, therefore, amounts presented may not be comparable to similar financial measures disclosed by other companies. These performance measures should not be considered in isolation as a substitute for performance measures in accordance with IFRS Accounting Standards.
(Expressed in thousands) | Q1-2024 | Q1-2023 |
$ | $ | |
Gross profit | 7,805 | 13,478 |
Add: | ||
Depreciation and amortization | 5,773 | 4,986 |
EBITDA | 13,578 | 18,464 |
(Expressed in thousands) | Q1-2024 | Q1-2023 |
$ | $ | |
Net cash provided by operating activities | 4,535 | 18,200 |
Add (Deduct): | ||
Changes in non-cash working capital | 5,654 | (5,008) |
Operating cash flow before non-cash working capital | 10,189 | 13,192 |
(iii) Free cash flow to equity refers to operating cash flow before changes in non-cash working capital, less capital expenditures plus new debt issued less debt and lease repayments. FCFE represents the amount of cash generated by the Company in a reporting period that can be used to pay for the following:
Free cash flow refers to FCFE plus repayments of borrowings and lease repayments.
(Expressed in thousands) | Q1-2024 | Q1-2023 |
$ | $ | |
Operating cash flow before changes in non-cash working capital | 10,189 | 13,192 |
Deduct: | ||
Cash used to purchase plant and equipment | (1,129) | (4,383) |
Repayment of borrowings, net of new debt issue | (1,750) | – |
Lease repayments | – | (188) |
Free cash flow to equity | 7,310 | 8,621 |
Add: | ||
Repayment of borrowings, net of new debt issued | 1,750 | – |
Lease repayments | – | 188 |
Free cash flow | 9,060 | 8,809 |
(Expressed in thousands) | Q1-2024 | Q1-2023 |
$ | $ | |
Tolling and production costs | 37,116 | 39,170 |
Add (deduct): | ||
Smelting and refining charges | 6,237 | 6,661 |
Transportation costs | 403 | 464 |
Inventory adjustments | (169) | 166 |
By-product credits | (5,454) | (8,039) |
Depreciation and amortization | (5,773) | (4,986) |
DET royalties – molybdenum | (1,032) | (1,806) |
Cash cost | 31,328 | 31,630 |
Copper tolled (M lbs) | 16.00 | 16.52 |
Cash cost ($/lb) | 1.96 | 1.91 |
2 Capital returned to shareholders
The table below summarizes the capital returned to shareholders since Amerigo’s Capital Return Strategy was implemented in October 2021.
(Expressed in millions) | |||
Shares repurchased | Dividends Paid | Total | |
$ | $ | $ | |
2021 | 8.9 | 2.8 | 11.7 |
2022 | 12.3 | 15.7 | 28.0 |
2023 | 2.6 | 14.6 | 17.2 |
2024 | – | 3.7 | 3.7 |
23.8 | 36.8 | 60.6 | |
3 Dividend yield
The disclosed annual yield of 7.7% is based on four quarterly dividends of Cdn$0.03 per share each, divided over Amerigo’s March 31, 2024 closing share price of Cdn$1.55.
4 Dividend dates
A dividend of Cdn$0.03 per share will be paid on June 20, 2024, to shareholders of record as of May 30, 2024. Given the change to a “T+1 settlement cycle” effective May 27, 2024, the ex-dividend date will also be May 30, 2024. Shareholders purchasing Amerigo shares on the ex-dividend date or after will not receive this dividend, as it will be paid to selling shareholders. Shareholders purchasing Amerigo shares before the ex-dividend date will receive the dividend.
5 MVC’s copper price
MVC’s copper price is the average notional copper price for the period before smelting and refining, DET notional copper royalties, transportation costs and excluding settlement adjustments to prior period sales.
MVC’s pricing terms are based on the average LME copper price of the third month following the delivery of copper concentrates produced under the DET tolling agreement (“M+3”). This means that when final copper prices are not yet known, they are provisionally marked to market at the end of each month based on the progression of the LME-published average monthly M and M+3 prices. Provisional prices are adjusted monthly using this consistent methodology until they are settled.
Q4-2023 copper deliveries were marked-to-market on December 31, 2023 at $3.83/lb and were settled in Q1-2024 as follows:
Q1-2024 copper deliveries were marked to market on March 31, 2024, at $3.97/lb and will be settled at the LME average prices for April ($4.30/lb), May, and June 2024.
Concurrent $11.5 Million Private Placement Equity Financing and P... READ MORE
Highlights: Integrated North Island Project resource estimate dem... READ MORE
Brixton Metals Corporation (TSX-V: BBB) (OTCQB: BBBXF) is pleased... READ MORE
Drillhole WMA082-11 Intersected 6.47% U3O8 Over 25.8 Metres; Including 2... READ MORE
First Ever Drill Assays from the Road IP Target Return 104.7 metr... READ MORE