Q1-2023 copper production of 16.5 million pounds, 4.5% over guidance

Q1-2023 cash cost¹ of $1.91 per pound, 11% lower than guidance due to strong molybdenum credits

$5.5 million returned to shareholders in Q1-2023

Amerigo Resources Ltd. (TSX: ARG) (OTCQX: ARREF) is pleased to announce production results for the quarter ended March 31, 2023 from Minera Valle Central the Company’s 100% owned operation located near Rancagua, Chile. Dollar amounts in this news release are in U.S. dollars (“USD”) unless indicated otherwise.

“We are pleased to report another strong operational quarter with production of 16.5 million pounds of copper at a cash cost¹ of $1.91 per pound. Copper production in the quarter was 4.5% over guidance. Strong credits from higher molybdenum prices reduced cash cost¹ by 11%, or $0.23 per pound, compared to our annual cash cost¹ guidance,” said Aurora Davidson, Amerigo’s President and CEO. “This is a solid start for 2023, and we look forward to reporting financial results on May 3.”

“In the first three months of 2023, we returned $5.5 million to Amerigo’s shareholders. This includes a sixth consecutive quarterly dividend of Cdn$0.03 per share and the repurchase of 1.6 million common shares for cancellation. Amerigo’s quarterly copper price was above $4 per pound for the first time since Q2-2022, and we anticipate continued strength in copper prices to allow us to deploy performance dividends in 2023,” stated Ms. Davidson.

In Q1-2023, MVC produced 16.5 million pounds of copper, with 61% of production coming from fresh tailings. Copper production was 4.5% over guidance due to higher grades from fresh tailings and higher grades and recoveries from historical tailings. Amerigo’s 2023 annual copper production guidance is 62.3 M lbs.

Quarterly molybdenum production was 0.3 M lbs, 5.2% over guidance. Amerigo’s 2023 annual molybdenum production guidance is 1.0 M lbs.

The annual plant maintenance shutdown at MVC and El Teniente is expected to last nine days and occur in May 2023. Our 2023 guidance factors in lower production from the shutdown.

Amerigo’s cash cost¹ in Q1-2023 was $1.91 per pound (“/lb”), 11% lower than Amerigo’s annual guided cash cost of $2.14/lb. The positive cash cost performance in the quarter was mainly driven by higher-than-guided molybdenum by-product credits from stronger molybdenum production and market prices.

Amerigo’s quarterly copper price in Q1-2023 was $4.02/lb, compared to $3.80/lb in Q4-2022, and the Company’s molybdenum price was $31.73/lb, up from $21.00/lb in Q4-2022.

On March 31, 2023, cash was $43.9 million (an increase of $6.1 million from December 31, 2022), and restricted cash was $6.4 million (an increase of $2.2 million from December 31, 2022). Outstanding bank debt was $24.5 million (unchanged from December 31, 2022, the lowest debt held since Q1-2015).

On March 31, 2023, MVC’s water reserves were 4.7 million cubic meters, 0.7 million lower than at year-end 2022. As MVC exits the southern hemispheric summer and prepares to enter the beginning of Chile’s wet season, water reserves remain sufficient to maintain projected Cauquenes processing rates for at least eighteen months, our maximum forecast horizon.

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¹ This is a non-IFRS measure. See “Non-IFRS Measures” for further information.

Capital Return Strategy

In Q1-2023, Amerigo returned $3.6 million to shareholders through the regular quarterly dividend of Cdn$0.03 per share, and $1.9 million was returned through the purchase of 1.6 million common shares for cancellation through Amerigo’s ongoing Normal Course Issuer Bid (“NCIB”). A further 9.5 million shares can be repurchased for cancellation under the NCIB before December 1, 2023.

Since the implementation of Amerigo’s Capital Return Strategy (the “Strategy”) initiated in September 2021, the Company has paid a cumulative dividend of Cdn$0.17 per share ($22.2 million) and used $23.0 million to purchase and cancel 19.5 million of its common shares, a 10.7% reduction in the number of common shares outstanding at the inception of the Strategy.

In addition to quarterly dividends of Cdn$0.03 per share and the opportunistic repurchase of common shares for cancellation under the NCIB, the Company is confident that higher copper prices will permit the deployment of performance dividends in 2023.

Release of Q1-2023 financial results on May 3, 2023

Amerigo will release Q1-2023 financial results at the market open on Wednesday, May 3, 2023.

About Amerigo and MVC

Amerigo is an innovative copper producer with a long-term relationship with Corporación Nacional del Cobre de Chile (“Codelco”), 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.