FREE

ARG: Strong Q1 Financials Led by Increased Copper Price

What you need to know:
• Amerigo reported strong Q1 financial results, generating revenue of $44.2M (-2% YoY) vs. our expectation of $39.5M, driven by the higher copper price. EBITDA was $15.2M vs. $12.5M expected while OCF was $11.6M vs. $10.2M expected.
• ARG returned $4.6M to shareholders in Q1, including $3.5M from dividends and $1.1M from buybacks.
• ARG remains on track for its annual guidance and to pay off its debt by year-end, freeing up additional cashflow to be returned to shareholders.

Amerigo Resources (ARG:TSX, ARREF:OTC) reported Q1 financial results that beat our expectations across the board. The quarter was driven by the copper price increasing to $4.42/lb as well as continued operational excellence by the ARG team. ARG remains focused on returning capital to shareholders, returning $3.5M from dividends and $1.1M from buybacks during the quarter. ARG pre-released its Q1 production highlights on April 9th, click here to read our note on the announcement. We are maintaining our BUY rating and C$2.50/share target price on Amerigo Resources.

Amerigo will be hosting its Q1 investor conference call on May 8th, 2025, at 11:00am PT (2:00pm ET). Investors interested in joining can do so by clicking here or dialling 1-888-510-2154.

Q1 Highlights
• Copper produced came in at 13.2Mlbs compared to our estimate of 14.9Mlbs (pre-reported). This was due to the scheduled annual maintenance shutdown, which affected operations more than we anticipated.
• Revenue was $44.2M compared to our expectation of $39.5M, representing a 2% decline YoY. The realized copper price for the quarter was $4.42/lb vs. our model which assumes $4.15/lb and $3.95/lb in Q1/24.
• Gross margin came in at 22%, beating our estimate of 17% as well as the 17% margin reported in Q1/24.
• EBITDA of $15.2M (34% margin) compared to our estimate of $12.5M and $10.2M in Q1/24 (30% margin). Cash costs came in at $2.22/lb and AISC came in at $4.28/lb.
• OCF (before working capital) came in at $11.6M (26% of revenue) compared to our estimate of $10.2M and $10.2M in Q1/24 (23% of revenue).
• Capex was $6.8M (vs. $4.0M expected) and ARG did not pay down any debt during the quarter, resulting in FCFF and FCFE of $4.8M.
• Amerigo returned $4.6M to shareholders in Q1 (vs. $3.7M in Q1/24), including $3.5M from the dividend and $1.1M from share buybacks.
• ARG ended the quarter with $30.8M in cash and $11.1M in debt.