Additional historic rains in central Chile have negatively impacted MVC operations Q3-2023 production is currently expected to be 2.7 M lbs lower than the revised plan Amerigo’s Capital Return Strategy remains in place
VANCOUVER, BRITISH COLUMBIA – September 11, 2023/Amerigo Resources Ltd. (TSX: ARG;
OTCQX: ARREF) (“Amerigo” or the “Company”) announced today that production for the quarter ending
September 30, 2023 (“Q3-2023”) from Minera Valle Central (“MVC”), the Company’s 100% owned operation
located near Rancagua, Chile, is currently expected to be approximately 2.7 million pounds (“M lbs”) lower
than the estimate set out in the Company’s revised plan because of ongoing historic levels of rainfall in
Chile.
MVC’s expected production in Q3-2023 was already lower than usual due to MVC losing its connection to
the central power grid from June 23 to July 21, 2023, following severe flooding from heavy rains in Central
Chile. While the extensive repairs required to reconnect to the power grid were underway, MVC successfully
produced 90,000 lbs of copper per day from July 6 to July 21, mitigating the negative production impact
from the flooding.
On July 22, 2023, MVC resumed normal operations processing fresh and historic Cauquenes tailings. As a
result of this flooding event, MVC reduced its annual copper production guidance by 3% to 60.5 million
pounds (“M lbs”), of which 13.8 M lbs were expected to be produced in Q3-2023 and 16.6 M lbs in Q4-2023.
Recently, heavy and sustained rainfall has precluded MVC’s ability to process historical tailings from
Cauquenes and necessitated all pumping equipment be utilized to remove water from Cauquenes rather
than provide historic tailings to the concentrator. Concurrently, MVC has continued to process fresh tailings
from El Teniente.
As a result of these massive rains, Q3-2023 copper production is now expected to be approximately 2.7 M
lbs lower than the estimate set out in the Company’s revised plan following the successful grid reconnection
at MVC on July 22. Because the rainy season at MVC typically ends in mid-September, the Company is
currently maintaining its revised target of 16.5 M lbs for Q4-2023.
“Ironically, after ten years of drought conditions during which we successfully adjusted operations to use
less water, the adage of when it rains, it pours has proven true for Amerigo in 2023,” said Aurora Davidson,
Amerigo’s President and CEO. She added, “The persistency and strength of these historic rains have forced
us to stay out of Cauquenes to ensure workers’ safety. It has also been necessary for us to pump more
than 1.5 million cubic meters of water from the deposit as soon as practically and safely possible”.
“Our team at MVC continues to work tirelessly to resume normal operations. While we cannot have final or
definite clarity on the effect of the rains on our current quarter’s production, we have estimated a decrease
of 2.7 million pounds of copper. We are evaluating all options to increase production in Q4-2023 to mitigate
this impact and will provide an update in due course. Although the operational conditions have been
unprecedented, other offsetting factors, such as a stronger U.S. dollar against the Chilean peso and the
Company’s untapped $15 million working capital line of credit, allow us to reaffirm that the Company’s return
of capital strategy remains in place”.
As of September 10, 2023, year-to-date cumulative rain at MVC has been 695 mm, compared to full-year
annual rainfall of 287 mm in 2022 and 247 mm in 2021. Recently, there have been numerous days when
rainfall has been over 20mm, 50 mm and even 100 mm, furthering the impact on normal operations. The
rain season typically ends in mid-September at MVC.
About Amerigo and Minera Valle Central (“MVC”)
Amerigo Resources Ltd. 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. Tel: (604) 681-2802; Web: www.amerigoresources.com; ARG:TSX; OTCQX:
ARREF
Contact Information
Aurora Davidson