Amerigo Resources ((TSE:ARG)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Amerigo Resources’ Q3 2025 Earnings Call: A Positive Outlook Amid Challenges
Amerigo Resources demonstrated a strong financial performance in the third quarter of 2025, achieving significant milestones such as debt elimination and a dividend increase. Despite challenges like the production impact from the El Teniente accident and increased costs, the overall outlook remains positive with stable copper prices and strong operational metrics.
Debt Elimination
On October 27, Amerigo Resources’ subsidiary MVC fully repaid its outstanding debt, which totaled $7.5 million at the end of September. This marks the end of a transformational 10-year period for the company and provides additional free cash flow capacity, positioning Amerigo for future growth and financial flexibility.
Increased Dividend
The Board of Directors announced a 33% increase in the quarterly dividend, raising it to CAD 0.04 per share. This decision reflects Amerigo’s financial strength and its commitment to returning value to shareholders, showcasing confidence in its ongoing performance and future prospects.
Stable Financial Performance
Amerigo reported a net income of $6.7 million and generated operating cash flow of $12.4 million for Q3 2025. The company maintained a high plant availability of 98% and operated without any lost time accidents or environmental incidents, underscoring its operational efficiency and safety standards.
Strong Revenue and Copper Prices
The company achieved a total revenue of $52.5 million in the third quarter, supported by stable copper prices and strong molybdenum contributions. LME copper prices averaged $4.44 per pound in Q3, peaking at $4.51 per pound in September, contributing to the robust revenue figures.
Production Impact from El Teniente Accident
An accident at El Teniente led to a temporary cessation of fresh tailings receipt for 10 days, causing a decline in monthly production in August. As a result, Amerigo adjusted its copper production guidance from 62.9 million pounds to a range of 60 million to 61.5 million pounds.
Increased Costs
Tolling and production costs increased by 4% from Q3 2024 to Q3 2025. The rise in costs was attributed to factors such as lime, inventory adjustments, and DET moly royalties, which impacted the overall cost structure.
Potential for Increased Royalties
With rising copper prices, there is the potential for renegotiation of the royalty scale with El Teniente. This could impact financial outcomes, presenting both opportunities and challenges for Amerigo in managing its financial strategy.
Forward-Looking Guidance
Amerigo Resources adjusted its copper production guidance due to the temporary suspension of fresh tailings at MVC following an accident at El Teniente. Despite this, the company maintained a high plant availability of 98% and reported strong financial performance with a total revenue of $52.5 million. The company also achieved a cash cost of $1.80 per pound, lower than the previous quarter, and maintained its annual cash cost guidance of $1.93 per pound. Significant developments in October included the full repayment of $7.5 million in outstanding debt and a 33% increase in the quarterly dividend.
In conclusion, Amerigo Resources’ Q3 2025 earnings call highlighted a robust financial performance with strategic achievements such as debt elimination and dividend increases. While challenges like production impacts and rising costs were noted, the company’s stable copper prices and strong operational metrics provide a positive outlook for the future.