The second quarter of the year is now well behind us, and most companies have started to release their production results ahead of their financial results. Amerigo Resources (ARG.TO) has now also shared its production and cash cost results, and with a total copper production of 16.3 million pounds of copper, the company is doing substantially better than the previous quarters, despite a lower copper output from the Maricunga toll processing operations.
The strong production results appear to be driven by higher recovery rates for both the fresh and historic tailings. The positive production results also pushed the cash costs down to just $1.53 per pound of copper which results in a healthy operating margin of in excess of a dollar per pound of copper (which is a blessing compared to the 30 cent margin before the copper price started to increase).
Amerigo also confirmed the engineering work for the Phase II expansion plan has reached a completion level of 44%, and this expansion will increase the production to 85-90 million pounds of copper per year (compared to this year’s production guidance of 60-65 million pounds of copper (and 1.5 million pounds of molybdenum).
Americo has also confirmed BBVA (BBVA) has approved a $35.3M loan facility to fund the construction of additional flotation cells to increase the recovery rates. The construction will be completed in the third quarter of next year.