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Amerigo Resources (TSE:ARG)
:ARG

Amerigo Resources (ARG) AI Stock Analysis

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Amerigo Resources

(OTC:ARG)

Rating:75Outperform
Price Target:
C$2.00
▲(5.26%Upside)
Amerigo Resources scores well due to strong financial performance and effective management strategies. The valuation is attractive, and the recent earnings call supports a positive outlook. Technical indicators show a bullish trend, although some caution is warranted due to market volatility.
Positive Factors
Capital Return
The company returned $4.6M to shareholders, including dividends and share buybacks, demonstrating a commitment to returning capital to shareholders.
Debt Management
Amerigo remains on track for its annual guidance and to pay off its debt by year-end, potentially increasing cash flow available for shareholders.
Financial Performance
Amerigo reported strong Q1 financial results, generating revenue driven by the higher copper price.
Negative Factors
Cost Management
Cash costs came in at $2.22/lb, above our estimate of $1.88/lb.
Market Conditions
Copper prices rose substantially in Q1, followed by a sharp drop in recent days due to U.S. tariffs.
Operational Performance
Copper production was lower than estimated due to a scheduled annual maintenance shutdown, affecting operations more than anticipated.

Amerigo Resources (ARG) vs. iShares MSCI Canada ETF (EWC)

Amerigo Resources Business Overview & Revenue Model

Company DescriptionAmerigo Resources Ltd. (ARG) is a Canadian company engaged in the production of copper and other valuable metals. Operating primarily in the mining and metals sector, the company focuses on the extraction and processing of copper, with its main operations based in Chile. Amerigo Resources primarily produces copper concentrate and molybdenum as by-products, leveraging its expertise in sustainable mining practices and strategic partnerships.
How the Company Makes MoneyAmerigo Resources makes money through the extraction and sale of copper concentrate, which is produced from tailings, the materials left over after the initial processing of ore. The company's primary revenue stream comes from its MVC (Minera Valle Central) operations in Chile, where it processes tailings from the El Teniente mine, one of the world's largest underground copper mines. Revenue is generated through long-term agreements with major mining companies that provide a stable supply of tailings for processing. Additionally, the company earns income from the sale of molybdenum, a by-product of its copper production, which is used in various industrial applications. Strategic partnerships with local and international stakeholders also play a critical role in the company's ability to maintain and expand its operations.

Amerigo Resources Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 12.96%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The call highlighted strong financial performance, effective capital return strategy, and operational excellence, despite challenges such as lower production due to maintenance shutdown and volatile copper prices. The company is well-positioned to meet its annual goals and reduce its debt by the end of the year.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
Amerigo reported a net income of $3.3 million and earnings per share of $0.02. Cash generated from operations was substantial at $11.6 million, and free cash flow to equity was $4.8 million.
Capital Return Strategy Success
Amerigo returned $4.6 million to shareholders, including $3.5 million in dividends and $1.1 million in share buybacks. Since October 2021, the CRS has returned $83 million to shareholders.
Operational Excellence
MVC achieved a record of three years and three months without lost time accidents and operated with no environmental incidents, with a plant availability of 97.6%.
Copper Price and Market Performance
The average LME copper price in Q1 was $4.24, outperforming the budgeted price of $4.15. Copper prices responded positively to structural challenges, with a monthly increase from $4.05 in December to $4.41 in March.
Debt Reduction Plan
Amerigo is on track to make final debt payments of $10.5 million this year and aims to be debt-free by year-end.
Negative Updates
Lower Production Due to Maintenance Shutdown
Production was lower in Q1 due to the timing of MVC’s annual maintenance shutdown, which affected revenue generation.
Volatile Copper Prices
Copper prices showed considerable volatility, with daily prices ranging from a low of $3.94 to a high of $4.53 during the quarter.
Lower Fresh Tailings Grade
The grade from fresh tailings dropped in Q1, attributed to weather conditions affecting operations.
Company Guidance
During the Amerigo Resources Q1 2025 Earnings Conference Call, the company provided guidance on several key metrics. They reaffirmed their annual production target of 62.9 million pounds of copper, despite a maintenance shutdown during the first quarter. The company reported a net income of $3.3 million, earnings per share of $0.02, and cash generated from operations amounting to $11.6 million. Free cash flow to equity was $4.8 million, with $4.6 million returned to shareholders through dividends and share buybacks. The company maintained a strong safety record with no lost time accidents and achieved a plant availability of 97.6%. Amerigo plans to eliminate its remaining debt of $10.5 million by the end of the year. They anticipate a stronger than budgeted average LME copper price of $4.15, based on the Q1 average price of $4.24. The company also highlighted its capital return strategy (CRS), with a total return to shareholders of $83 million since October 2021.

Amerigo Resources Financial Statement Overview

Summary
Amerigo Resources shows a positive financial trajectory with strong cash flow and stable balance sheet metrics. The income statement reflects solid revenue growth and improving profitability, although further enhancements in net margins would be beneficial. Overall, the company is well-positioned financially within the copper industry, with room for strategic improvements.
Income Statement
75
Positive
The company has demonstrated consistent revenue growth over recent periods, showing a significant recovery in total revenue from 2023 to the TTM (Trailing-Twelve-Months). Gross profit margin and net profit margin have improved as well, indicating effective cost management. However, the net profit margin remains relatively modest, suggesting potential room for further profitability improvements.
Balance Sheet
70
Positive
Amerigo Resources maintains a strong equity base with a healthy equity ratio, reflecting financial stability. The debt-to-equity ratio is low, indicating conservative leverage practices. However, the decrease in total assets may pose a risk to future growth potential if not addressed.
Cash Flow
80
Positive
The company exhibits robust cash flow generation, with a strong operating cash flow to net income ratio. Free cash flow has shown consistent growth, which supports potential reinvestment and dividend distribution. The free cash flow to net income ratio is also favorable, underscoring efficient cash management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
264.29M294.99M157.46M264.19M300.58M178.38M
Gross Profit
47.29M45.41M13.86M28.32M72.09M15.39M
EBIT
35.95M34.11M9.63M22.90M64.27M11.78M
EBITDA
59.05M57.61M29.98M45.59M84.16M27.98M
Net Income Common Stockholders
18.26M19.24M3.38M4.37M39.82M6.06M
Balance SheetCash, Cash Equivalents and Short-Term Investments
27.66M35.86M17.15M37.82M59.79M7.99M
Total Assets
196.22M205.47M199.56M231.18M269.35M237.57M
Total Debt
3.36M3.23M20.71M25.91M33.85M59.50M
Net Debt
-24.29M-32.64M4.46M-11.91M-25.95M51.52M
Total Liabilities
92.53M100.68M94.71M112.48M130.55M126.89M
Stockholders Equity
103.69M104.79M104.85M118.70M138.79M110.68M
Cash FlowFree Cash Flow
42.67M50.44M3.39M13.82M81.17M16.98M
Operating Cash Flow
57.10M59.78M20.28M23.63M93.13M19.78M
Investing Cash Flow
-15.04M-9.34M-16.89M-9.81M-8.10M-2.72M
Financing Cash Flow
-27.42M-29.40M-24.91M-35.89M-36.82M-10.66M

Amerigo Resources Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.90
Price Trends
50DMA
1.75
Positive
100DMA
1.74
Positive
200DMA
1.68
Positive
Market Momentum
MACD
0.04
Negative
RSI
68.82
Neutral
STOCH
84.74
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ARG, the sentiment is Positive. The current price of 1.9 is above the 20-day moving average (MA) of 1.78, above the 50-day MA of 1.75, and above the 200-day MA of 1.68, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 68.82 is Neutral, neither overbought nor oversold. The STOCH value of 84.74 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ARG.

Amerigo Resources Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSARG
75
Outperform
C$311.78M12.4417.43%8.25%32.13%
53
Neutral
C$307.70M-7.46%1.26%
51
Neutral
$2.03B-1.13-21.36%3.65%2.87%-30.54%
TSFDY
48
Neutral
C$161.33M-85.57%5.34%
43
Neutral
C$534.17M-13.43%-83.79%
TSLA
39
Underperform
C$177.22M28.737.53%
TSCUU
39
Underperform
C$140.91M-0.74%42.11%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ARG
Amerigo Resources
1.89
0.30
19.02%
TSE:LA
Los Andes Copper
5.95
-3.80
-38.97%
TSE:MARI
Marimaca Copper
5.71
1.83
47.16%
TSE:CUU
Copper Fox Metals
0.26
-0.02
-7.14%
TSE:FDY
Faraday Copper
0.79
0.01
1.28%
TSE:ASCU
Arizona Sonoran Copper Co.
2.06
0.65
46.10%

Amerigo Resources Corporate Events

Executive/Board Changes
Amerigo Resources Strengthens Board with Ignacio Cruz Appointment
Positive
Jun 2, 2025

Amerigo Resources Ltd. has appointed Ignacio Cruz to its board of directors, bringing over forty years of experience in the Chilean mining, energy, and civil society sectors. Cruz’s extensive background includes leadership roles in major organizations such as TECHO International and Colbún S.A., as well as significant experience in the mining sector with Antofagasta Minerals. His expertise in strategic management, sustainability, and stakeholder engagement is expected to enhance Amerigo’s operations and long-term value creation.

The most recent analyst rating on (TSE:ARG) stock is a Buy with a C$2.50 price target. To see the full list of analyst forecasts on Amerigo Resources stock, see the TSE:ARG Stock Forecast page.

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Amerigo Resources Reports Strong Q1-2025 Financial Results Amid Maintenance Shutdown
Positive
May 7, 2025

Amerigo Resources Ltd. reported a strong financial performance in Q1-2025, with a net income of $3.3 million and an EBITDA of $15.2 million. Despite a 17.5% decrease in copper production due to the timing of its annual maintenance shutdown, the company maintained its annual production guidance and returned $4.6 million to shareholders through dividends and share buybacks. The company highlighted the impact of rising copper prices on its financial strategy, focusing on debt elimination and shareholder returns.

Shareholder Meetings
Amerigo Resources Reports Favorable AGM Voting Results
Positive
May 6, 2025

Amerigo Resources Ltd. announced the results of its 2025 Annual General Meeting, where shareholders voted in favor of all business items, including the election of all director nominees. The meeting saw 68,548,449 common shares voted, representing 41.70% of the total outstanding shares. This outcome reflects strong shareholder support and positions the company for continued stability and growth in its operations.

Shareholder MeetingsFinancial Disclosures
Amerigo Resources Announces Correction to Q1-2025 Financial Results Release Date
Neutral
Apr 29, 2025

Amerigo Resources Ltd. has corrected the date for the release of its Q1-2025 financial results, now scheduled for May 7, 2025, instead of the previously announced May 5, 2025. The company will hold its Annual General Meeting on May 5, 2025, and an investor conference call on May 8, 2025. This correction ensures stakeholders are accurately informed about the company’s financial reporting schedule, maintaining transparency and effective communication with investors.

Business Operations and StrategyFinancial Disclosures
Amerigo Resources Reports Q1-2025 Results, Maintains Annual Guidance
Positive
Apr 9, 2025

Amerigo Resources reported its Q1-2025 operational results, highlighting a copper production of 13.2 million pounds, aligning with its annual guidance. The company successfully completed its annual plant maintenance shutdown, which typically results in the lowest production quarter. Despite short-term volatility in copper prices due to global trade shifts, Amerigo remains on track with its production and cash cost guidance for 2025. The company returned $4.6 million to shareholders and maintained a strong cash position, supporting its goal to be debt-free by the end of the year.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.