NEW YORK Amerigo Resources Ltd. is conducting a "detailed economic review of molybdenum production under current prices" given the "minimal profitability" of its molybdenum operations in the first quarter, it said.
The Vancouver, British Columbia, company has cut its output guidance for 2013, with a recent slide in one of the working areas at its Colihues Mine meaning that extraction rates and grades will be lower than thought for the second and third quarters.
"Copper production is now expected to be at the lower end of our previously announced guidance of 45 (million) to 50 million pounds, and guidance for molybdenum has been revised downward to 700,000 pounds for 2013," chief operating officer Rob Henderson said.
The company posted net income of $3.2 million, up 40.2 percent from $2.3 million a year earlier, despite revenue that fell 14.5 percent to $43.2 million from $50.5 million.
Revenue was weighed down by lower copper and molybdenum sales volumes and lower average metals prices, Amerigo said. Average copper selling prices fell to $3.52 per pound for the three months ended March 31 from $3.55 per pound in the year-ago quarter, while the average molybdenum selling prices dropped to $11.34 per pound from $14.10 per pound.
Molybdenum output of 258,301 pounds in the first quarter rose 19.4 percent from 216,292 pounds a year earlier; and copper output topped 12.8 million pounds, down 7.6 percent from nearly 13.9 million pounds.
Amerigo produces copper and molybdenum under a long-term partnership with Santiago, Chile-based Corporación Nacional del Cobre Chile (Codelco) by means of processing fresh and old tailings from the El Teniente Mine in Chile.