ARG: Strong Q1 Production & Largest Performance Dividend To Date
What you need to know:• Amerigo reported Q1/26 production of 14.3Mlbs (+8% YoY) compared to our estimate of 14.2Mlbs despite the 10-day annual maintenance shutdown.
• Cash cost came in at $1.82/lb, well below our estimate of $2.11/lb and ARG’s annual guidance of $1.98/lb.
• ARG declared its largest-ever performance dividend of C$0.16/share, equal to the past four regular quarterly dividends, driven by record LME copper prices of $5.83/lb in Q1.
• The Company bought back $5.9M worth of shares in the quarter.
This morning, Amerigo Resources (ARG:TSX, ARREF:OTC) reported its Q1/26 production results from its MVC processing facility in Chile. Results slightly beat our estimates despite the scheduled annual maintenance shutdown, with copper production of 14.3Mlbs just exceeding our 14.2Mlbs estimate. Cash cost came in significantly below annual guidance at $1.82/lb, and the Company declared its largest-ever performance dividend of C$0.16 per share, equivalent to four consecutive quarterly dividends and a 2.8% additional dividend yield on the base dividend. We are maintaining our BUY rating and increasing our target price to C$8.50/share (prev. C$7.25/share) on ARG.
Q1 Production Highlights
• Q1 copper production came in at 14.3Mlbs, above our estimate of 14.2Mlbs, a notable achievement given the scheduled annual maintenance shutdown, which caused a 10-day production hiatus. MVC completed the maintenance on time and without incidents. Plant availability for the quarter was 98.5%, and there were no lost-time accidents.
• 93.5Ktpd of fresh tailings were processed during the quarter across 79 operating days, with another 52.0Ktpd of historic tailings across 80 operating days.
• Normalized cash cost of $1.82/lb came in well below our estimate of $2.11/lb and meaningfully below ARG’s guided annual cash cost of 1.98/lb.
• Moly production for the quarter came in at 0.32Mlbs, above our estimate of 0.24Mlbs.
• Additionally, ARG returned $16.5M of capital to shareholders in Q1, $10.6M paid as dividends (including a C$0.05/share performance dividend) and $5.9M paid as share buybacks in Q1/26. ARG bought back 930K shares in January at C$5.43/share and 570K shares in March at C$5.43/share. This represented a solid discount to today’s price and offset new share issuances.
• The Company reported a cash position of $57.2M at the end of the quarter, up $16.9M from the end of Q4/25.
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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