NEW YORK Lower copper and
molybdenum prices helped push Amerigo Resources Ltd. $8.19
million into the red last year in contrast to net income of
$8.7 million in 2011.
"Results were also adversely
affected by the one-time payment of $4.6 million in bonuses on
the signing of a new four-year union agreement and higher
extraction costs and lower metal recoveries in the Colihues
tailings pond (in Chile) due to extremely difficult mining
conditions during the latter part of the year," Amerigo
president and chief executive officer Klaus Zeitler said in a
Amerigos sales increased
9.4 percent to $181.76 million in 2012 from $166.07 million the
previous year on higher copper and molybdenum production (
amm.com, Jan. 16).
The Vancouver, British
Columbia-based companys wholly owned subsidiary in Chile,
Minera Valle Central (MVC), treats fresh and old tailings from
Codelcos El Teniente copper mine. It has the rights to
process El Tenientes tailings from the Caren tailings
deposit and the Colihues tailings pond and is in discussions to
obtain the rights to process tailings from the Cauquenes
deposit, which is adjacent to Colihues.
Zeitler said he remains
confident that MVC will reach an agreement on the Cauquenes
tailings pond during 2013. "(An agreement) will allow the
company to substantially increase copper and molybdenum
production," he said.
Zeitler said that although
challenging mining conditions in Colihues are expected to
continue for the first few months of this year, the company
expects to reduce cash costs in 2013 to between $1.95 and $2.15
per pound due mainly to a change in the remaining five years of
its power contract from a variable to a lower fixed rate. Power
costs in January 2013 were half those in January last year,
Amerigo paid $50.6 million in
power costs last year at a rate of $0.1895 per kWh compared
with $45.5 million, or $0.1903 per kWh, in 2011.
The company expects 2013 production to total between 45
million and 50 million pounds of copper, down from 51.7 million
pounds last year, and 1 million pounds of molybdenum, down from
nearly 1.06 million pounds in the same comparison.