ARG:CC - Amerigo Announces Q3-2022 Results & Quarterly Dividend

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Net loss of $4.4million, Free Cash Flow to Equity ¹ of $0.6million

EBITDA ¹ of $1.6 million, endingquarter cash & restricted cash of $48.2 million

Quarterly dividend ofCdn$0.03 per share declared, representing 12.4%yield ²

Amerigo Resources Ltd. (TSX: ARG; OTCQX: ARREF) (“Amerigo” or the “Company”) is pleased to announce financialresults for the three months ended September 30, 2022 (“Q3-2022”). Dollar amounts in this news release are in U.S. dollars unlessindicated otherwise.

Quarterlyresults included a net loss of $4.4 million, loss per share(“LPS”) of $0.03 (Cdn$0.03) and EBITDA of $1.6 million. Followingyear-to-date return of capital to shareholders of $24.3 million anddebt repayments of $3.5 million, cash and restricted cash on September30, 2022 were $48.2 million, compared to starting 2022 cash andrestricted cash of $64.0 million.

Amerigo’s quarterly financial results were impacted by $8.6million in negative price settlement adjustments to prior quartercopper sales.

“We are pleased toreport another strong operational quarter where we continued to meetproduction and cost objectives. We also successfully negotiated athree-year collective labour agreement that will lend furthervisibility to our forward costs. However, Amerigo’s financialresults were negatively affected by copper prices that appeared to bebottoming towards the end of the quarter,” said Aurora Davidson,Amerigo’s President and CEO. “Despite the lower copper prices,Amerigo generated positive free cash flow to equity ¹ . Weremain committed to our policy of returning capital to shareholderswhile we wait for global sentiment to stabilize and copper prices tore-establish their positive historical correlation with inflation,”she added.

On October 31, 2022,Amerigo’s Board of Directors declared a quarterly dividend ofCdn$0.03 per share, payable on December 20, 2022, to shareholders ofrecord as of November 30, 2022. Amerigo designates the entire amountof this taxable dividend to be an “eligible dividend” for purposesof the Income Tax Act (Canada), as amended from time to time. Based onthe September 30, 2022, share closing price of Cdn$0.97, thisrepresents an annual dividend yield 12.4% ² .

This news release should be read inconjunction with Amerigo’s interim consolidated financial statementsand Management’s Discussion and Analysis (“MD&A) for the threeand nine months ended September 30, 2022, available at the Company’swebsite at www.amerigoresources.com and at www.sedar.com .

Highlights and Significant Items

• In Q3-2022,market copper prices continued to decline, affecting Amerigo’sfinancial performance through lower current quarterly revenue which ismarked-to-market at a lower provisional price (Q3-2022: $3.50 perpound (“/lb”); Q3-2021: $4.23/lb)3 and through negative finalprice settlement adjustments to prior-quarter production (Q3-2022:$8.6 million in negative adjustments to Q2-2022 production; Q3-2021:$2.4 million in negative adjustments to Q2-2021production).
• As a result, Amerigo posted a net loss in Q3-2022of $4.4 million (Q3-2021: net income of $8.4 million). LPS duringQ3-2022 was $0.03 (Cdn$0.03) (Q3-2021: EPS of $0.05(Cdn$0.06)).
• Q3-2022 production was 16.0 million pounds ofcopper (Q3-2021: 16.0 million pounds) including 8.6 million poundsfrom fresh tailings (Q3-2021: 8.6 million pounds) and 7.4 millionpounds from Cauquenes (Q3-2021: 7.4 million pounds).
• Molybdenum production in Q3-2022 was 0.3 million pounds(Q3-2021: 0.3 million pounds).
• Revenue during Q3-2022 was$30.9 million (Q3-2021: $48.1 million), including copper tollingrevenue of $27.4 million (Q3-2021: $42.5 million) and molybdenumrevenue of $3.5 million (Q3-2021: $5.6 million).
• Coppertolling revenue is calculated from MVC’s gross value of copperproduced during Q3-2022 of $56.8 million (Q3-2021: $72.0 million) andnegative fair value adjustments to settlement receivables of $8.8million (Q3-2021: $2.9 million), less notional items including DETroyalties of $14.3 million (Q3-2021: $20.6 million), smelting andrefining of $5.9 million (Q3-2021: $5.5 million) and transportation of$0.4 million (Q3-2021: $0.5 million). The Q3-2022 settlementadjustments included $8.6 million in negative settlement adjustmentsin respect of Q2-2022 production, which are finaladjustments.
• The Company generated operating cash flow beforechanges in non-cash working capital1 of $2.6 million in Q3-2022(Q3-2021: $14.1 million). Quarterly net operating cash flow used inoperating activities was $6.3 million (Q3-2021: cash generated of$25.4 million). There was free cash flow to equity1 of $0.6 million inQ3-2022 (Q3-2021: $5.9 million).
• Q3-2022 cash cost1 increased19% to $1.93/lb (Q3-2021: $1.62/lb), driven mostly by a decrease of$0.13/lb in molybdenum by-product credits from a lower molybdenumprice, an increase of $0.05/lb in grinding media and an increase of$0.07/lb in other direct costs.
• Amerigo’s financialperformance is very sensitive to changes in copper prices. MVC’sQ3-2022 provisional copper price was $3.50/lb3, and final prices forJuly, August, and September sales will be the average London MetalExchange (“LME”) prices for October, November, and December,respectively. A 10% increase or decrease from the $3.50/lb3provisional price used on September 30, 2022 would result in a $5.7million change in revenue in Q4-2022 in respect of Q3-2022production.
• In Q3-2022, Amerigo returned $3.8 million toshareholders through Amerigo’s regular quarterly dividend ofCdn$0.03 per share. YTD-2022, Amerigo returned $24.3 million toshareholders, with $12.0 million paid out in dividends and $12.3million returned through the purchase of 9.4 million common shares forcancellation through a Normal Course Issuer Bid.
• On September30, 2022, the Company held cash and cash equivalents of $41.8 million(December 31, 2021: $59.8 million), restricted cash of $6.4 million(December 31, 2021: $4.2 million) and had working capital of $6.9million (December 31, 2021: $24.6 million).

Investor Conference Call on November 3,2022

Amerigo’s quarterlyinvestor conference call will take place on Thursday, November 3, 2022at 11:00 am Pacific Daylight Time/2:00 pm Eastern Daylight Time. Tojoin the call, please dial 1-888-664-6392 (Toll-Free NorthAmerica) and enter confirmation number 99826991 .

About Amerigo and Minera Valle Central(“MVC”)

Amerigo ResourcesLtd. is an innovative copper producer with a long-term relationshipwith Corporación Nacional del Cobre de Chile (“Codelco”), theworld’s largest copper producer. Amerigo produces copper concentrateand molybdenum concentrate as a by-product at the MVC operation inChile by processing fresh and historic tailings from Codelco’s ElTeniente mine, the world's largest underground copper mine. Tel:(604) 681-2802; Web: www.amerigoresources.com ; ARG:TSX; OTCQX: ARREF.

Contact Information:

Aurora Davidson Graham Farrell

President and CEO InvestorRelations

(604)697-6207 (416)842-9003

ad@amerigoresources.com graham.farrell@harbor-access.com

¹ Non-IFRSMeasures

This news releaseincludes five non-IFRS measures: (i) EBITDA, (ii) operating cash flowbefore changes in non-cash working capital, (iii) free cash flow toequity (“FCFE”), (iv) free cash flow (“FCF”) and (v) cashcost.

These non-IFRS performancemeasures are included in this news release because they provide keyperformance measures used by management to monitor operatingperformance, assess corporate performance, and to plan and assess theoverall effectiveness and efficiency of Amerigo’s operations. Theseperformance measures are not standardized financial measures underIFRS and, therefore, amounts presented may not be comparable tosimilar financial measures disclosed by other companies. Theseperformance measures should not be considered in isolation as asubstitute for measures of performance in accordance with IFRS.

(i) EBITDA refers to earnings beforeinterest, taxes, depreciation, and administration and is calculated byadding back depreciation expense to the Company’s gross profit orloss.

(ii) Operating cash flow before changes innon-cash working capital is calculated by adding back the decrease orsubtracting the increase in changes in non-cash working capital to orfrom cash provided by operating activities.

(iii) Free cash flow toequity (“FCFE”) refers to operating cash flow before changes innon-cash working capital less capital expenditures plus new debtissued less debt and lease repayments. FCFE represents the amount ofcash generated by the Company in a reporting period that can be usedto pay for:

a) potentialdistributions to the Company’s shareholders, and

b) any additional taxes triggered by therepatriation of funds from Chile to Canada to fund thesedistributions.

Free cash flow(“FCF”) refers to FCFE plus repayments of borrowings and leaserepayments.

(iv) Cash cost is a performance measurecommonly used in the mining industry that is not defined under IFRS.Cash cost is the aggregate of smelting and refining charges,tolling/production costs net of inventory adjustments andadministration costs, net of by-product credits. Cash cost per poundproduced is based on pounds of copper produced and is calculated bydividing cash cost over the number of pounds of copper produced.

² Dividend yield

The disclosed annual yield of 12.4% isbased on four quarterly dividends of Cdn$0.03 per share each, dividedover Amerigo’s September 30, 2022 share price of Cdn$0.97.

³ MVC’s copperprice

MVC’s copper price isthe average notional copper price for the period, before smelting andrefining, DET notional copper royalties, transportation costs andexcluding settlement adjustments to prior period sales.

MVC’s pricing terms are based on theaverage LME copper price for the third month following delivery ofcopper concentrates produced under the tolling agreement with DET(“M+3”). This means that when final copper prices are not yetknown, they are provisionally marked-to-market at the end of eachmonth based on the progression of the LME published average monthly Mand M+3 prices. Provisional prices are adjusted monthly using thisconsistent methodology, until they are settled.

Q2-2022 copper deliveries weremarked-to-market at June 30, 2022 at $4.10/lb and were settled inQ3-2022 as follows:

• April 2022sales settled at the July 2022 LME average price of $3.41/lb

• May 2022 sales settled at the August2022 LME average price of $3.61/lb

• June 2022 sales settled at the September 2022 LME averageprice of $3.51/lb

Q3-2022 copperdeliveries were marked-to-market at September 30, 2022 at $3.50/lb andwill be settled at the LME average prices for October, November andDecember 2022.

Cautionary Statement on Forward-LookingInformation

This news releasecontains certain forward-looking information and statements as definedin applicable securities laws (collectively referred to as"forward-looking statements"). These statements relate tofuture events or the Company’s future performance. All statementsother than statements of historical fact are forward-lookingstatements. The use of any of the words "anticipate","plan", "continue", "estimate","expect", "may", "will", "project","predict", "potential", "should","believe" and similar expressions is intended to identifyforward-looking statements. These forward-looking statements includebut are not limited to, statements concerning:

• forecastedproduction and operating costs;
• our strategies andobjectives;
• our estimates of the availability and quantity oftailings, and the quality of our mine plan estimates;
• thesufficiency of MVC’s water reserves to maintain projected Cauquenestonnage processing for a period of at least 18 months;
• pricesand price volatility for copper, molybdenum and other commodities andof materials we use in our operations;
• the demand for andsupply of copper, molybdenum and other commodities and materials thatwe produce, sell and use;
• sensitivity of our financial resultsand share price to changes in commodity prices;
• our financialresources and financial condition and our expected ability to redeployother tools of our capital return strategy;
• interest and otherexpenses;
• domestic and foreign laws affecting ouroperations;
• our tax position and the tax rates applicable tous;
• our ability to comply with our loan covenants;
• theproduction capacity of our operations, our planned production levelsand future production;
• potential impact of production andtransportation disruptions;
• hazards inherent in the miningindustry causing personal injury or loss of life, severe damage to ordestruction of property and equipment, pollution or environmentaldamage, claims by third parties and suspension ofoperations
• estimates of asset retirement obligations and othercosts related to environmental protection;
• our future capitaland production costs, including the costs and potential impact ofcomplying with existing and proposed environmental laws andregulations in the operation and closure of ouroperations;
• repudiation, nullification, modification orrenegotiation of contracts;
• our financial and operatingobjectives;
• our environmental, health and safetyinitiatives;
• the outcome of legal proceedings and otherdisputes in which we may be involved;
• the outcome ofnegotiations concerning metal sales, treatment charges androyalties;
• disruptions to the Company's informationtechnology systems, including those related tocybersecurity;
• our dividend policy; and
• generalbusiness and economic conditions, including, but not limited to, ourassessment of strong market fundamentals supporting copperprices.

These forward-lookingstatements involve known and unknown risks, uncertainties and otherfactors that may cause actual results or events to differ materiallyfrom those anticipated in such statements. Inherent in forward-lookingstatements are risks and uncertainties beyond our ability to predictor control, including risks that may affect our operating or capitalplans; risks generally encountered in the permitting and developmentof mineral projects such as unusual or unexpected geologicalformations, negotiations with government and other third parties,unanticipated metallurgical difficulties, delays associated withpermits, approvals and permit appeals, ground control problems,adverse weather conditions, process upsets and equipment malfunctions;risks associated with labour disturbances and availability of skilledlabour and management; risks related to the potential impact of globalor national health concerns, including COVID-19, and the inability ofemployees to access sufficient healthcare; government or regulatoryactions or inactions; fluctuations in the market prices of ourprincipal commodities, which are cyclical and subject to substantialprice fluctuations; risks created through competition for miningprojects and properties; risks associated with lack of access tomarkets; risks associated with availability of and our ability toobtain both tailings from Codelco’s Division El Teniente’s currentproduction and historic tailings from tailings deposit; theavailability of and ability of the Company to obtain adequate fundingon reasonable terms for expansions and acquisitions; mine planestimates; risks posed by fluctuations in exchange rates and interestrates, as well as general economic conditions; risks associated withenvironmental compliance and changes in environmental legislation andregulation; risks associated with our dependence on third parties forthe provision of critical services; risks associated withnon-performance by contractual counterparties; risks associated withsupply chain disruptions; title risks; social and political risksassociated with operations in foreign countries; risks of changes inlaws affecting our operations or their interpretation, includingforeign exchange controls; and risks associated with tax reassessmentsand legal proceedings. Notwithstanding the efforts of the Company andMVC, there can be no guarantee that the Company’s or MVC’s staffwill not contract COVID-19 or that the Company’s and MVC’smeasures to protect staff from COVID-19 will be effective. Many ofthese risks and uncertainties apply not only to the Company and itsoperations, but also to Codelco and its operations. Codelco’songoing mining operations provide a significant portion of thematerials the Company processes and its resulting metals production,therefore these risks and uncertainties may also affect theiroperations and in turn have a material effect on the Company.

Actual results and developments are likelyto differ, and may differ materially, from those expressed or impliedby the forward-looking statements contained in this news release. Suchstatements are based on several assumptions which may prove to beincorrect, including, but not limited to, assumptionsabout:

• general business and economicconditions;
• interest and currency exchangerates;
• changes in commodity and power prices;
• acts offoreign governments and the outcome of legal proceedings;
• thesupply and demand for, deliveries of, and the level and volatility ofprices of copper, molybdenum and other commodities and products usedin our operations;
• the ongoing supply of material forprocessing from Codelco’s current mining operations;
• thegrade and projected recoveries of tailings processed byMVC;
• the ability of the Company to profitably extract andprocess material from the Cauquenes tailings deposit;
• thetiming of the receipt of and retention of permits and other regulatoryand governmental approvals;
• our costs of production and ourproduction and productivity levels, as well as those of ourcompetitors;
• changes in credit market conditions andconditions in financial markets generally;
• our ability toprocure equipment and operating supplies in sufficient quantities andon a timely basis;
• the availability of qualified employees andcontractors for our operations;
• our ability to attract andretain skilled staff;
• the satisfactory negotiation ofcollective agreements with unionized employees;
• the impact ofchanges in foreign exchange rates and capital repatriation on ourcosts and results;
• engineering and construction timetables andcapital costs for our expansion projects;
• costs of closure ofvarious operations;
• market competition;
• tax benefitsand tax rates;
• the outcome of our copper concentrate sales andtreatment and refining charge negotiations;
• the resolution ofenvironmental and other proceedings or disputes;
• the futuresupply of reasonably priced power;
• rainfall in the vicinity ofMVC continuing to trend towards normal levels;
• averagerecoveries for fresh tailings and Cauquenes tailings;
• ourability to obtain, comply with and renew permits and licenses in atimely manner; and
• our ongoing relations with our employeesand entities with which we do business.

Future production levels and costestimates assume there are no adverse mining or other events whichsignificantly affect budgeted production levels.

Although the Company believes that theseassumptions were reasonable when made, because these assumptions areinherently subject to significant uncertainties and contingencieswhich are difficult or impossible to predict and are beyond theCompany’s control, the Company cannot assure that it will achieve oraccomplish the expectations, beliefs or projections described in theforward-looking statements.

Wecaution you that the foregoing list of important factors andassumptions is not exhaustive. Other events or circumstances couldcause our actual results to differ materially from those estimated orprojected and expressed in, or implied by, our forward-lookingstatements. You should also carefully consider the matters discussedunder Risk Factors in the Company`s Annual Information Form. Theforward-looking statements contained herein speak only as of the dateof this news release and except as required by law, we undertake noobligation to update publicly or otherwise revise any forward-lookingstatements or the foregoing list of factors, whether as a result ofnew information or future events or otherwise.

ContactDetails

Aurora Davidson, President and CEO

+1604-697-6207

ad@amerigoresources.com

GrahamFarrell

+1 416-842-9003

graham.farrell@harbor-access.com

CompanyWebsite

http://www.amerigoresources.com/

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