ARG: EBITDA Up 116% YoY on a 29% YoY Increase in Copper Price
What you need to know:• Amerigo reported Q1/26 revenue of $66.2M (+50% YoY) compared to our estimate of $56.8M, driven by a realized copper price of $5.70/lb and positive settlement adjustments.
• EBITDA came in at $32.8M (50% margin), well ahead of our 25.1M estimate and more than double the $15.2M reported in Q1/25.
• ARG generated $14.5M in FCFF (vs. $4.8M in Q1/25) and ended the quarter with $57.2M in cash and no debt.
• ARG returned $16.5M to shareholders during Q1, consisting of $5.9M in buybacks, $5.8M in a performance dividend, and $4.7M in dividends.
This morning, Amerigo Resources (ARG:TSX, ARREF:OTC) reported its Q1/26 results that came in largely ahead of our expectations. The highlight of the quarter was ARG’s leverage to the copper price, where a 29% YoY increase in the copper price led to a 116% increase in EBITDA. Amerigo remains well-positioned to benefit from the structural tailwinds in copper and to generate substantial cashflow, which will be returned to shareholders. Management highlighted a trifecta in Q1 of strong production, lower cash costs, and high copper price. We are maintaining our BUY rating and our target price of C$8.50/share on Amerigo Resources.
Key Highlights
• Copper produced came in at 14.3Mlbs (+8% YoY) for the quarter, which was pre-announced on April 13th. Please refer to our production note here.
• Revenue for Q1 was $66.2M compared to our expectation of $56.8M (+50% YoY). The beat was due to a $7.6M adjustment to the fair value of settlement receivables within copper revenue. The realized copper price was $5.70/lb, well above the $4.80/lb guidance and the $4.42/lb in Q1/25.
• Gross margin came in at 41% for the quarter, compared to our estimate of 34%. This is flat QoQ and significantly higher than historical levels of 20-30%.
• EBITDA for the quarter came in at $32.8M (50% margin, +116% YoY) compared to our estimate of $25.1M and $15.2M in Q1/25. This showcases the leverage to copper, where the copper price increased just 29% YoY, leading to EBITDA increasing 116% YoY.
• Cash costs came in at $1.82/lb, and AISC came in at $5.03/lb, compared to $2.22/lb and $4.28/lb in Q1/25, respectively. AISC increased due to larger sustaining capex of $5.1M.
• OCF (before working capital) came in at $20.2M (30% of revenue), compared to our estimate of $19.0M and $11.6M in Q1/25. OCF (after working capital) was a staggering $40.1M as ARG’s trade receivables declined $22.5M QoQ.
• Capex was $5.7M (vs. $6.0M expected) for the quarter, leading to Q1 FCFF of $14.5M compared to $4.8M in the same quarter of 2025. Management highlighted that annual capex could reach $19.3M (vs. guidance of $17.5M).
• Amerigo returned $16.5M to shareholders in Q1/26, consisting of $5.9M in NCIB buybacks, $5.8M performance dividend, and $4.7M quarterly dividend.
• ARG ended the quarter with $57.2M in cash and no debt. x
Amerigo Resources is engaged in the production of copper and molybdenum concentrates with operations in Chile. Through its subsidiary, Minera Valle Central S.A., Co. has a contract with Chile's state-owned copper producer National Copper Corporation to process the tailings from El Teniente underground copper mine.
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