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Amerigo Completes Acquisition of Minera Valle Central
07.10.2003
AMERIGO RESOURCES LTD. reported today that it has completed the acquisition of 100% of Chilean copper producer Minera Valle Central S.A. (MVC). Amerigo has acquired US$16.6 million of vendor shareholder loans and all share capital of MVC. Amerigo will pay the balance of purchase price of US$3.4 million in either 3 or 5 years, depending whether the price of copper is above or below US$0.82 per pound for the first three years.
MVC has a contract with Chile’s state owned copper producer Codelco through 2021 to process tailings from the El Teniente mine. MVC’s plant has operated since 1992, and produced approximately 35,000 tonnes of copper concentrate containing 10,000 tonnes of copper during calendar 2002. The MVC plant currently processes approximately 90,000 tonnes of tailings per day, and is scheduled to produce approximately 12,000 tonnes of copper in concentrate in 2003.
El Teniente has produced copper since the beginning of the last century and at present is one of the largest copper producing mines in the world with production of approx. 350,000 tonnes of copper metal per year. The mine is scheduled to complete an expansion program in 2003 which will increase production to 420,000 tonnes per annum. Ore reserves and resources are sufficient for several decades production at the expanded rate.
The increased production rate from El Teniente will increase the fresh tailings supply to MVC from the current 90,000 to approximately 120,000 tonnes per day, and consequently increase copper concentrate production by MVC..
MVC also has the contractual right to augment the supply of tailings by 10,000 tonnes per day with material from one of the former tailings deposition sites for the El Teniente operations. This tailings pond, known as the Colihues dam, is located immediately adjacent to the MVC facilities. Present pilot plant operations indicate that the copper content of these tailings is approximately 2 ½ times higher than the fresh tailings presently processed. The processing of these tailings will result in a significant increase in the production of MVC in the future.
Management of Amerigo is very pleased to complete the acquisition of MVC. President Dr. Klaus Zeitler said, “With the acquisition complete, MVC management will now focus all efforts towards pursuing Phase 1 and Phase 2 expansions over the next 18 months to increase copper concentrate production.”
Chairman Steven Dean said, “Amerigo offers significant leverage to an increasing copper price driven by an expected improvement in the global economy. Due to industry consolidation over the last 10 years, there are few junior copper equity investments which offer the political security of Chile and a long term resource under contract with one of the biggest copper mines in the world (El Teniente), combined with an aggressive expansion program in copper production over the next 2 years.”
Amerigo Resources Ltd. is a Canadian junior copper production company currently producing approximately 12,000 tonnes of copper per annum from its MVC operations near Santiago, Chile. Amerigo is also exploring for Olympic Dam style copper-gold deposits on four properties in the Sault Ste. Marie area of Ontario, Canada.
For further information, please contact:
Jeffrey Giesbrecht, Secretary (604) 641.2779
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.