Amerigo Resources Ltd (ARREF) Q1 2025 Earnings Call Highlights: Strong Financial Performance …

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Amerigo Resources Ltd (ARREF, Financial) reported a strong financial performance in Q1 2025, with a net income of $3.3 million and earnings per share of $0.02.
• The company generated substantial cash from operations amounting to $11.6 million, highlighting its strong cash flow position.
• Amerigo Resources Ltd (ARREF) successfully completed its annual maintenance shutdown in Q1, which is part of its normal operations, ensuring continued operational efficiency.
• The company maintained a record of 3 years and 3 months without lost time accidents, demonstrating a strong commitment to safety.
• Amerigo Resources Ltd (ARREF) returned $4.6 million to shareholders in Q1 through dividends and share buybacks, showcasing its effective capital return strategy.

Negative Points

• The Q1 2025 production was lower due to the timing of the annual maintenance shutdown, which affected quarterly production and cash costs.
• Copper prices experienced considerable volatility during Q1, with daily prices ranging from a low of $3.94 to a high of $4.53, impacting revenue predictability.
• The company faced a working capital deficiency of $4.6 million as of March 31, 2025, although it improved from the previous quarter.
• There was a decrease in the grade of fresh tailings in Q1, attributed to weather conditions in Chile, which could affect future production levels.
• CapEx was front-loaded in Q1, resulting in higher expenditures compared to previous quarters, which may impact cash flow management throughout the year.

Q & A Highlights

Q: Given the maintenance shutdown in Q1, how should we expect the cadence of revenue for the remainder of the year to align with the 62.9 million pound guidance?
A: The only effect on production and revenue was in Q1 due to the maintenance shutdown. We completed the shutdown in March and resumed normal operations. Q2 is expected to be a regular production and revenue generation quarter. – Aurora Davidson, CEO

Q: The grade from fresh tailings dropped in Q1. What was the reason, and what should we expect going forward?
A: The lower grade in Q1 is typical due to weather conditions in Chile, affecting mining areas. This is the first time in years that both the maintenance shutdown and lower grades occurred in the same quarter. This was anticipated in our budget. – Aurora Davidson, CEO

Q: CapEx was elevated in Q1 compared to previous quarters. What should we expect for the rest of the year?
A: The CapEx for 2025 is budgeted at $13 million, with a significant portion front-loaded in Q1 due to the maintenance shutdown. The full-year guidance remains at $13 million. – Aurora Davidson, CEO

Q: Should we expect a decline in shares outstanding by year-end, or is the buyback just to offset stock-based compensation?
A: Our minimal commitment is to prevent dilution. We have surpassed this in Q1 and will continue buybacks, seeing opportunities to buy back shares at good prices. This does not preclude performance dividends under favorable copper price conditions. – Aurora Davidson, CEO

Q: With no debt obligations by year-end, is the board considering increasing the permanent dividend?
A: Once debt is eliminated, the funds previously allocated to debt repayment will benefit shareholders. Revisiting the quarterly dividend amount is a logical step forward. – Aurora Davidson, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.