Repairs Underway At MVC After Weather Related Total Power Outage

VANCOUVER - Amerigo Resources Ltd. reported that tepairs are underway and are expected to be completed earlier than originally estimated at Minera Valle Central (MVC) located near Rancagua, Chile. MVC’s operations were temporarily disrupted on June 23, 2023, following a significant climatic event which affected central Chile. A torrential rainfall brought down three high-voltage towers connecting MVC to Chile’s central power grid, causing a total power outage at the MVC plant. MVC reported no further damage to critical infrastructure, no injuries, and no accidents.

Earlier this year, MVC completed a risk-mitigation project to install protective flotation equipment around the pipes transporting water and slurry between the Cauquenes historical tailings deposit and MVC’s concentrator plant. Without this protection, there would have been material damage to these connecting pipelines. MVC received an initial estimate that replacing the infrastructure to reconnect MVC to the power grid could take up to four weeks. A leading Chilean power infrastructure provider has begun sourcing and installing new towers, cables, aerial conductors, and ancillary equipment. It is now expected that the repair work will be completed two weeks earlier than originally estimated, enabling MVC to reconnect to the central grid and resume normalized copper and molybdenum concentrates production.

MVC’s daily production is approximately 180,000 pounds of copper and 3,000 pounds of molybdenum. It is estimated that 2023 production will be lower by about 3 million pounds (M lbs) of copper and 50,000 lbs of molybdenum because of the power disruption. Before the power supply interruption, MVC’s copper and molybdenum production had been over-performing guidance. The Company now estimates that 2023 production will reach 60.5 M lbs of copper, approximately 3% lower than the Company’s original guidance of 62.3 M lbs pounds of copper. Amerigo’s annual guidance of 1.0 M lbs of molybdenum remains unchanged.

“We have begun the work required to safely resume operations at MVC. Our team in Chile moved quickly to ensure the safety of employees and minimize the impact of lost production. We now expect to resume operations considerably earlier than originally thought,” said Aurora Davidson, President and CEO. Amerigo is well positioned to face this emergency, backed by our proactive risk mitigation investments and a strong balance sheet. Annual production guidance has been marginally affected, and the Company’s quarterly dividend remains safe.”