ARG:CC - Amerigo Reports 2022 Production Results Above Guidance & Provides 2023 Guidance

(NewsDirect)

2022 copperproduction of 64 M pounds, 3.4% over guidance

2022 cashcost ¹ 2% over guidance

2023 copperproduction guidance of 62.3 M pounds, in line with 2022 guidance (61.9M pounds)

Amerigo Resources Ltd. (TSX: ARG; OTCQX: ARREF) (“Amerigo” or the “Company”) is pleased to announce 2022production results from Minera Valle Central (“MVC”), theCompany’s 100% owned operation located near Rancagua, Chile. Dollar amounts in this news release are in U.S. dollars (“USD”)unless indicated otherwise.

“We are pleased to report annual copperproduction of 64 million pounds, marking three consecutive years whereproduction has outperformed guidance,” said Aurora Davidson,Amerigo’s President and CEO. “We thank our teams in Chile andCanada for their consistent commitment to meet or exceed corporategoals.”

“Ascopper prices continue to recover, recently exceeding $4 per pound, welook forward to a strong year. In addition to maintaining ourquarterly dividends, we have already redeployed a share buybackprogram, and anticipate the payment of performance dividends as partof our capital return strategy,” stated Ms. Davidson.

In 2022, MVC produced64 million pounds (“M lbs”) of copper, with 59% of productioncoming from fresh tailings. Annual copper production was 3.4% overguidance of 61.9M lbs, due to higher grade and recoveries from freshtailings and higher grade from historical tailings (“Cauquenestailings”).

Amerigo’s 2022 cash cost ¹ was $1.98 per pound(“/lb”), including $0.04/lb paid to MVC’s workers in Q4-2022 asthe signing bonus of a 3-year collective labor agreement. Normalizedcash cost ¹ excluding the effect of the signing bonus was$1.94/lb, 2% higher than 2022 cash cost ¹ guidance of$1.90/lb.

MVC’s water reserves at year end 2022 were 5.4 million cubic meters,unchanged from the reserves at the end of Q3-2022. Water reservesremain sufficient to maintain projected Cauquenes processing rates fora period of at least eighteen months, our maximum forecast horizon.

Annualmolybdenum production was 0.97 M lbs, lower than annual guidancemostly due to lower molybdenum content in fresh tailings.

Amerigo’s quarterlycopper price in Q4-2022 was $3.80/lb, compared to $3.50/lb inQ3-2022.

InQ4-2022, Amerigo returned $3.7 million to shareholders through theregular quarterly dividend of Cdn$0.03 per share and made bank debtrepayments of $3.5 million in principal.

On December 31, 2022, cash was $37.8 million(a reduction of $4.0 million from September 30, 2022), restricted cashwas $4.2 million (a reduction of $2.2 million from September 30, 2022)and outstanding bank debt was $24.5 million (a decrease of $3.5million from September 30, 2022).

¹ This is a non-IFRS measure. See“Non-IFRS Measures” for further information.

2023Guidance

In2023, we expect to produce 62.3 M lbs of copper and 1.0 M lbs ofmolybdenum, with 59% of copper production coming from fresh tailings.2023 production guidance is in line with 2022’s guidance of 61.9 Mlbs.

The annualplant maintenance shutdown at MVC and El Teniente is expected to last9 days and take place in Q2-2023. Our 2023 guidance factors in lowerproduction from the shutdown.

Amerigo’s 2023 cash cost ¹ is expectedto be $2.14/lb, compared to 2022’s normalized cash cost of $1.94/lb.The increase in projected cash cost is mostly attributable to higherpower costs of $0.06/lb. This increase is due to USD CPI adjustmentsto MVC’s base power tariff, and higher pass-through charges from theChilean power grid applicable to all industrial consumers. Part of theincrease is also due to a 4% projected increase in power consumptionassociated with the operation of a new Cauquenes sump, located furtherfrom the concentrator plant.

MVC will also face a $0.05/lb increase intreatment and refinery charges. These are industry benchmark chargesand this year are at the highest level since 2018. Other increasesinclude lime costs ($0.02/lb), Cauquenes processing costs ($0.02/lb),industrial water costs ($0.01/lb) and all other costs combined($0.04/lb).

Amerigo’s 2023 guidance in this news release assumes an averagemarket copper price of $3.60/lb, an average molybdenum market price of$16/lb and an exchange rate of $920 Chilean pesos (“CLP”) to $1USD.

A $2/lbincrease in molybdenum price would have a $0.03/lb impact on cashcost ¹ and a 10% change on the CLP to USD foreign exchangerate would have an impact of $0.08/lb on cash cost ¹ .

¹ This is anon-IFRS measure. See “Non-IFRS Measures” for furtherinformation.

Usingthese assumptions, the royalty to Codelco’s El Teniente Division(“DET”) in 2023 would be $0.97/lb. The DET royalty is calculatedon a sliding scale based on copper prices. A $0.20/lb increase incopper price would have a $0.10/lb impact on the DET royalty.

Projected 2023EBITDA ¹ using these assumptions is expected to be $33.8million ( excluding the effect of 2022 settlement adjustments ).Each $0.10/lb increase in copper price up to $4/lb would have animpact on EBITDA ¹ of $2.0 million. Each $0.10/lb increasein copper price over $4/lb would have an increase inEBITDA ¹ of approximately $2.7 million.

In 2023, MVC isexpected to incur the following capital expenditures on projects(“Capex”):

Following a third-party assessment of risks to thecontinuity of operations at MVC, we have placed an order for astand-by power transformer. The equipment is expected to be deliveredmid-2023, 90% of the installation work is to be carried out in H2-2023and the stand-by unit is expected to be connected to the MVCelectrical system during the 2024 MVC plant shutdown.

Capitalizablemaintenance and strategic spares are expected to be $2.8 million.

With respect tofinancial obligations, MVC will make two scheduled semi-annual bankdebt repayments of $3.5 million plus interest (in June and December2023). MVC will also make payments of approximately $2.2 million topay in full the 5-year finance lease agreement under which MVCfinanced major upgrades to the molybdenum plant in 2018.

Capital ReturnStrategy

Given that Amerigo currently requires no growth capital and continuesto have healthy cash balances and minimal debt, we expect to continuein 2023 with the Capital Return Strategy (the “Strategy”)initiated in September 2021.

Since the implementation of the Strategy, Amerigohas paid a cumulative dividend of Cdn$0.14 per share ($18.6 million)and used $21.1 million to purchase and cancel 17.87 million of itscommon shares, a 9.82% reduction in the number of common sharesoutstanding at the inception of the Strategy.

Under the 2023 guidanceassumptions presented in this news release, the Company remainsconfident in the security of the quarterly Cdn$0.03 per sharedividend, and in Amerigo’s ability to opportunistically reduce itscommon shares outstanding. Under the current Normal Course Issuer Bid(“NCIB”), up to 10.75 million shares (representing 6.14% of theissued and outstanding) can be repurchased for cancellation prior toDecember 1, 2023.

In addition to quarterly dividends of Cdn$0.03 per share andthe repurchase of common shares for cancellation under the NCIB, theCompany is confident that stronger copper prices will permit thedeployment of performance dividends in 2023.

¹ This is anon-IFRS measure. See “Non-IFRS Measures” for furtherinformation.

Release of 2022 results on February 22, 2023

Amerigowill release 2022 financial results at market open on Wednesday,February 22, 2023.

Investor conference call on February 23,2023

Amerigo’s quarterly investor conference call will take place onThursday, February 23, 2023 at 11:00 am Pacific Standard Time/2:00 pmEastern Standard Time.

Participants can join by going to https://bit.ly/3FICjYa andentering their name and phone number. The conference system will thencall the participants and place them instantly into the call.

Alternatively,participants can dial direct to be entered to the call by an Operator.Dial 1-888-664-6392 (Toll-Free North America) and enter confirmation number 84336703 .

About Amerigo and MVC

Amerigo is aninnovative copper producer with a long-term relationship withCorporación Nacional del Cobre de Chile (“Codelco”), theworld’s largest copper producer.

Amerigo produces copper concentrate and molybdenumconcentrate as a by-product at the MVC operation in Chile byprocessing fresh and historic tailings from Codelco’s El Tenientemine, the world's largest underground copper mine. Tel: (604)681-2802; Web: www.amerigoresources.com ;Listing: ARG:TSX.

Non-IFRS Measures

This news release includes references to twoperformance measures not defined under International FinancialReporting Standards (“IFRS”): cash cost and EBITDA.

These non-IFRSperformance measures are included in this news release because theyprovide key performance measures used by management to monitoroperating performance, assess corporate performance, and to plan andassess the overall effectiveness and efficiency of Amerigo’soperations. These performance measures are not standardized financialmeasures under IFRS and, therefore, amounts presented may not becomparable to similar financial measures disclosed by other companies.These performance measures should not be considered in isolation as asubstitute for measures of performance in accordance with IFRS.

Cash cost is aperformance measure commonly used in the mining industry. InAmerigo’s case, cash cost is the aggregate of smelting and refiningcharges, 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.

EBITDA refers toearnings before interest, taxes, depreciation and administration andis calculated by adding back depreciation expense to the Company’sgross profit.

TheCompany provides a reconciliation of these performance measuresagainst IFRS measures on a quarterly basis when financial results arereported. Reconciliations are included in the Company’s quarterlyearnings release and on its Management’s Discussion andAnalysis.

Cautionary NoteRegarding Forward-Looking Information

This news release contains certainforward-looking information and statements as defined in applicablesecurities laws (collectively referred to as "forward-lookingstatements"). These statements relate to future events or theCompany’s future performance. All statements other than statementsof historical fact are forward-looking statements. The use of any ofthe words "anticipate", "plan", "continue","estimate", "expect", "may", "will","project", "predict", "potential","should", "believe" and similar expressions isintended to identify forward-looking statements. These forward-lookingstatements include but are not limited to, statementsconcerning:

• forecasted productionand 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.

Theseforward-looking statements involve known and unknown risks,uncertainties and other factors that may cause actual results orevents to differ materially from those anticipated in such statements.Inherent in forward-looking statements are risks and uncertaintiesbeyond our ability to predict or control, including risks that mayaffect our operating or capital plans; risks generally encountered inthe permitting and development of mineral projects such as unusual orunexpected geological formations, negotiations with government andother third parties, unanticipated metallurgical difficulties, delaysassociated with permits, approvals and permit appeals,ground controlproblems,adverse weather conditions, process upsets and equipmentmalfunctions; risks associated with labour disturbances andavailability of skilled labour and management; risks related to thepotential impact of global or national health concerns, includingCOVID-19, and the inability of employees to access sufficienthealthcare; government or regulatory actions or inactions;fluctuations in the market prices of our principal commodities, whichare cyclical and subject to substantial price fluctuations;riskscreated through competition for mining projectsand properties;risks associated with lack of access to markets; risks associated withavailability of and our ability to obtain both tailings fromCodelco’s Division El Teniente’s current production and historictailings from tailings deposit; the availability of and ability of theCompany to obtain adequate funding on reasonable terms for expansionsand acquisitions; mine plan estimates; risks posed by fluctuations inexchange rates and interest rates, as well as general economicconditions; risks associated with environmental compliance and changesin environmental legislation and regulation; risks associated with ourdependence on third parties for the provision of critical services;risks associated with non-performance by contractual counterparties;risks associated with supply chain disruptions; title risks; socialand political risks associated with operations in foreign countries;risks of changesin laws affecting our operations or theirinterpretation, including foreign exchange controls; and risksassociated with tax reassessments and legal proceedings.Notwithstanding the efforts of the Company and MVC, there can be noguarantee that the Company’s or MVC’s staff will not contractCOVID-19 or that the Company’s and MVC’s measures to protect stafffrom COVID-19 will be effective. Many of these risks and uncertaintiesapply not only to the Company and its operations, but also to Codelcoand its operations. Codelco’s ongoing mining operations provide asignificant portion of the materials the Company processes and itsresulting metals production, therefore these risks and uncertaintiesmay also affect their operations and in turn have a material effect onthe Company.

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

• general business andeconomic conditions;
• 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 levelsand cost estimates assume there are no adverse mining or other eventswhich significantly affect budgeted production levels.

Although the Companybelieves that these assumptions were reasonable when made, becausethese assumptions are inherently subject to significant uncertaintiesand contingencies which are difficult or impossible to predict and arebeyond the Company’s control, the Company cannot assure that it willachieve or accomplish the expectations, beliefs or projectionsdescribed in the forward-looking statements.

We caution you that theforegoing list of important factors and assumptions is not exhaustive.Other events or circumstances could cause our actual results to differmaterially from those estimated or projected and expressed in, orimplied by, our forward-looking statements. You should also carefullyconsider the matters discussed under Risk Factors in theCompany`s Annual Information Form. The forward-looking statementscontained herein speak only as of the date of this news release andexcept as required by law, we undertake no obligation to updatepublicly or otherwise revise any forward-looking statements or theforegoing list of factors, whether as a result of new information orfuture 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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