Can you explain Amerigo Resources’ business model and the evolution of the MVC operation?

Amerigo Resources produces copper, but unlike traditional mining companies, we do not follow the typical long-term cycle of exploration, development, and construction before production. Instead, we have a contractual relationship with Codelco’s El Teniente division, where we have the rights to process their fresh tailings and a series of their historical tailings deposits. This allows us to extract further economic value from these environmental liabilities by producing copper concentrates. We are a large operation, as we have to process a significant amount of material, given the low grade that is contained in tailings. In many ways, we are more of a copper factory than a mining operation. The Minera Valle Central (MVC) operation was founded in 1992 and purchased by Amerigo in 2003. We used to produce around 25 million pounds of copper per year, but we have since grown this figure to 63 million lb Cu in 2021. This was achieved by investing US$300 million into the facility, doubling the capacity of our concentrator plant, and incorporating the rights to process historical tailings.

What do Amerigo’s 2021 results and guidance for 2022 indicate about the state of the company today?

Amerigo’s 2021 results and guidance for 2022 indicate that the company is doing well, like many other copper producers. However, what sets us apart is our focus on producing margin, not just on how many more tonnes of copper we can produce, but on how we can produce it in the most economic way possible. Our team is very focused on three fronts: production; operational continuity; and financial performance. This approach to running the business and the effect of strong copper prices have dramatically improved the company’s finances.

How has the company resolved issues to guarantee a sustainable and economic water source?

Our most important water source is the water that comes with the fresh tailings. Additionally, we have water rights at MVC, as well as three water thickeners that increase water circulation efficiencies. We can store surplus water at Colihues, which is an historical tailings deposit adjacent to MVC. Two years ago, we faced a critical situation with respect to water supply, and as a result, we are closely monitoring our sources and uses of water eighteen months ahead at all times.

What potential is there to replicate the tailings processing work Amerigo does at other mines in Chile?

For many mining companies, tailings represent an inherent long-term responsibility and an environmental liability. However, the industry needs to look at ways to maintain production levels as grades are getting lower. The notion of tapping into tailings to derive further economic value is very compelling. However, producing copper from tailings is not easy and requires art and science, as no two deposits are alike. Even at MVC, we have had to make adjustments to fine-tune the processing of the fresh and historical tailings from El Teniente. We believe that when mining companies start to see their existing tailings as an opportunity to top up production, rather than just a liability, there could be tremendous opportunities for Amerigo given our existing operational experience. We are interested in exploring opportunities under the right conditions which include the size of the deposit and location.

Which factors contributed to MVC receiving the 2021 San Lorenzo award from Chile’s National Mining Society (SONAMI)?

We received the San Lorenzo award for mid-tier mining companies based on our innovative business model that economically produces copper through a process that no one else uses. Amerigo is the only company in the world solely focused on production through the processing of copper tailings on this scale.