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Amerigo's (ARREF) Q3 Copper Output Falls Y/Y Due to Heavy Rain
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Amerigo Resources (ARREF - Free Report) announced that the Minera Valle Central (“MVC”) mine has produced 11.3 million pounds of copper in the third quarter of 2023, in line with its expectation. The reported figure marks a 18% sequential and 31% year-over-year decline, mainly due to the heavy rains in Chile that impacted operations at the mine.
The cumulative rainfall in Chile this year has surpassed the combined total rainfall in the last two years. Heavy and sustained rainfall in Chile, from Aug 19 to Sep 10, 2023, prevented MVC to process historical tailings from Cauquenes. All pumping equipment had to be diverted to remove water from Cauquenes instead of providing historic tailings to the concentrator.
Due to this setback, on Sep 11, 2023, the company announced that MVC’s copper production for the third quarter of 2023 will be lower than expected, at 11.3 million pounds. The company provided an update on Sep 21 that MVC has resumed operation. This was made possible after pumping out 2.2 million cubic meters of water that had accumulated at the Cauquenes historical tailings deposit.
The company has now assured that with the resumption of operations and the rainy season being over, copper production in the fourth quarter of 2023 is expected to be higher than the 16.6 million pounds of copper output in the fourth quarter of 2022.
Amerigo’s copper production in 2023 is expected to exceed the revised guidance of 57.8 million pounds, which the company had provided on Sep 11, 2023.
The company produced 0.22 million pounds of molybdenum in the third quarter of 2023. This is lower than 0.30 million pounds in the second quarter of 2023 and 0.28 million pounds in the third quarter of 2022. The company has however raised its molybdenum production guidance for 2023 to 1.1 million pounds from its previous expectation of 1 million pounds.
Amerigo’s average copper price in the third quarter of 2023 was $3.76 per pound compared with $3.80 per pound in the second quarter of 2023. Molybdenum price was $23.31 per pound, up from $20.76 per pound in the second quarter. ARREF’s cash cost in the third quarter was $2.44 per pound, primarily due to the temporarily reduced production level. The figure was higher than $2.37 per pound in the second quarter of 2023 and $1.93 per pound in the year-ago quarter.
The company also stated that it has ended the third quarter of 2023 with a cash position of $13.1 million and restricted cash of $6.3 million. Outstanding debt was $21 million. In the third quarter, ARREF returned $3.7 million to shareholders as dividends.
Price Performance
Shares of Amerigo have gained 35.4% in the past year compared with the industry’s 20.2% growth.
Yara International has an average trailing four-quarter earnings surprise of 56%. The Zacks Consensus Estimate for YARIY’s fiscal 2023 earnings is pegged at $1.27 per share. The consensus estimate for 2023 earnings has moved 9% north in the past 60 days. Its shares have gained 5.2% in the last year.
Carpenter Technology has an average trailing four-quarter earnings surprise of 10%. The Zacks Consensus Estimate for CRS’s fiscal 2024 earnings is pegged at $3.48 per share. The consensus estimate for 2023 earnings has moved 8% north in the past 60 days. Its shares have gained 109.6% in the last year.
L.B. Foster has an average trailing four-quarter earnings surprise of 134.5%. The Zacks Consensus Estimate for FSTR’s 2023 earnings is pegged at 53 cents per share. Earnings estimates have been unchanged in the past 60 days. FSTR’s shares have gained 98.4% in the last year.
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Amerigo's (ARREF) Q3 Copper Output Falls Y/Y Due to Heavy Rain
Amerigo Resources (ARREF - Free Report) announced that the Minera Valle Central (“MVC”) mine has produced 11.3 million pounds of copper in the third quarter of 2023, in line with its expectation. The reported figure marks a 18% sequential and 31% year-over-year decline, mainly due to the heavy rains in Chile that impacted operations at the mine.
The cumulative rainfall in Chile this year has surpassed the combined total rainfall in the last two years. Heavy and sustained rainfall in Chile, from Aug 19 to Sep 10, 2023, prevented MVC to process historical tailings from Cauquenes. All pumping equipment had to be diverted to remove water from Cauquenes instead of providing historic tailings to the concentrator.
Due to this setback, on Sep 11, 2023, the company announced that MVC’s copper production for the third quarter of 2023 will be lower than expected, at 11.3 million pounds. The company provided an update on Sep 21 that MVC has resumed operation. This was made possible after pumping out 2.2 million cubic meters of water that had accumulated at the Cauquenes historical tailings deposit.
The company has now assured that with the resumption of operations and the rainy season being over, copper production in the fourth quarter of 2023 is expected to be higher than the 16.6 million pounds of copper output in the fourth quarter of 2022.
Amerigo’s copper production in 2023 is expected to exceed the revised guidance of 57.8 million pounds, which the company had provided on Sep 11, 2023.
The company produced 0.22 million pounds of molybdenum in the third quarter of 2023. This is lower than 0.30 million pounds in the second quarter of 2023 and 0.28 million pounds in the third quarter of 2022. The company has however raised its molybdenum production guidance for 2023 to 1.1 million pounds from its previous expectation of 1 million pounds.
Amerigo’s average copper price in the third quarter of 2023 was $3.76 per pound compared with $3.80 per pound in the second quarter of 2023. Molybdenum price was $23.31 per pound, up from $20.76 per pound in the second quarter. ARREF’s cash cost in the third quarter was $2.44 per pound, primarily due to the temporarily reduced production level. The figure was higher than $2.37 per pound in the second quarter of 2023 and $1.93 per pound in the year-ago quarter.
The company also stated that it has ended the third quarter of 2023 with a cash position of $13.1 million and restricted cash of $6.3 million. Outstanding debt was $21 million. In the third quarter, ARREF returned $3.7 million to shareholders as dividends.
Price Performance
Shares of Amerigo have gained 35.4% in the past year compared with the industry’s 20.2% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
ARREF currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the basic materials space are Yara International ASA (YARIY - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and L.B. Foster Company (FSTR - Free Report) . YARIY sports a Zacks Rank #1 (Strong Buy) at present, while CRS and FSTR carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Yara International has an average trailing four-quarter earnings surprise of 56%. The Zacks Consensus Estimate for YARIY’s fiscal 2023 earnings is pegged at $1.27 per share. The consensus estimate for 2023 earnings has moved 9% north in the past 60 days. Its shares have gained 5.2% in the last year.
Carpenter Technology has an average trailing four-quarter earnings surprise of 10%. The Zacks Consensus Estimate for CRS’s fiscal 2024 earnings is pegged at $3.48 per share. The consensus estimate for 2023 earnings has moved 8% north in the past 60 days. Its shares have gained 109.6% in the last year.
L.B. Foster has an average trailing four-quarter earnings surprise of 134.5%. The Zacks Consensus Estimate for FSTR’s 2023 earnings is pegged at 53 cents per share. Earnings estimates have been unchanged in the past 60 days. FSTR’s shares have gained 98.4% in the last year.