Profitable Long-Term Copper Producer with Recently Launched Payout Policy
TSX: ARG, OTCQX: ARREF
Amerigo’s 100% owned MVC operation in Chile produces copper (and molybdenum as a byproduct) by processing fresh and historic tailings from Codelco’s El Teniente mine.
Amerigo is a historical copper producer (MVC has been producing copper concentrates since 1992) with a strategic relationship with Codelco, the world’s largest copper producer. MVC’s contractual rights to process fresh and historic tailings from El Teniente currently run to 2037.
Amerigo’s business model is built on US$300M of investment since 2003 when Amerigo bought MVC. The operational objectives are to maximize production from fresh and historic tailings and manage costs to maximize margin. MVC has low sustaining capex requirements (US$6M/year) and predictable EBITDA and cash flow.
Amerigo is a pure play copper producer that is highly levered to the copper price and poised to meet an annual production target of 61M pounds of copper in 2021. At an average copper price of US$4 per pound, Amerigo would generate EBITDA of US$61M.
Amerigo has a robust ESG profile, producing copper which is the pillar of the emerging green economy, with operations driven to minimize environmental impact, foster a circular economy and reduce tailings footprints and environmental risk. Starting in 2020, all the electricity used at MVC is being supplied from renewable sources.
- Commencement of substantial return of capital to shareholders is imminent
- Amerigo is a pure play copper producer that is highly levered to the copper price
- Simple business model, predictable EBITDA/cash flow and low Capex
- Strategically positioned with the world’s largest copper producer in the world’s premier copper producing region
- Environmentally sustainable copper production with significant growth opportunities throughout Chile
- Excellent potential for world-class bulk-mineable deposit