Amerigo Resources : Announces Q1-2022 Results & Quarterly Dividend

May 4, 2022

N.R. 2022-5

Amerigo Announces Q1-2022 Results & Quarterly Dividend

Q1-2022 net income of $15.5 million, earnings per share of $0.09 (Cdn$0.11)

EBITDA1 of $26.4 million, free cash flow to equity1 of $17.9 million

Dividend of Cdn$0.03 per share payable on June 20, 2022

VANCOUVER, BRITISH COLUMBIA - May 4, 2022/Amerigo Resources Ltd. (TSX: ARG; ARREF: OTC)

("Amerigo" or the "Company") is pleased to announce financial results for the three months ended March 31, 2022 ("Q1-2022"). Dollar amounts in this news release are in U.S. dollars unless indicated otherwise.

Amerigo's quarterly financial results included net income of $15.5 million, earnings per share ("EPS") of $0.09 (Cdn$0.11), EBITDA1 of $26.4 million and free cash flow to equity ("FCFE")1 of $17.9 million.

"We are pleased to report a robust start to the year for Amerigo. We met our copper production and cash cost targets, and our average quarterly copper price increased to $4.64 per pound", said Aurora Davidson, Amerigo's President and CEO. "Amerigo's Board of Directors has declared a quarterly dividend of Cdn$0.03 per share. The Company's dividend policy combines the strength of sustainable and reliable quarterly dividends, with the flexibility of top-up dividends that can be declared anytime to distribute additional surplus cash to shareholders. We remain comfortable with a targeted minimum corporate cash balance of $20.0 to $25.0 million and our normal course issuer bid remains in place", added Ms. Davidson.

On May 2, 2022, Amerigo's Board of Directors declared a quarterly dividend of Cdn$0.03 per share, payable on June 20, 2022, to shareholders of record as of May 30, 2022. Amerigo designates the entire amount of this taxable dividend to be an "eligible dividend" for purposes of the Income Tax Act (Canada), as amended from time to time. Based on the March 31, 2022 share closing price of Cdn$1.84, this would represent an annual dividend yield 6.52%.

This news release should be read in conjunction with Amerigo's interim consolidated financial statements and Management's Discussion and Analysis ("MD&A) for Q1-2022, available at the Company's website atwww.amerigoresources.com and atwww.sedar.com.

31-Mar-22

31-Dec-21

Q1-2022

Q1-2021

Revenue ($ millions)

Net income ($ millions)

EPS ($)

53.8 48.9

15.5 10.9

0.09 0.06

EPS (Cdn)

0.11 0.08

EBITDA1 ($ millions)

26.4 23.3

Operating cash flow before changes in non-cash working capital1 ($ millions)

20.6 20.0

FCFE1 ($ millions)

17.9 12.6

Cash ($ millions)

71.1 59.8

Restricted cash ($ millions)

6.4 4.2

Borrowings ($ millions)

30.8 30.4

Share outstanding at end of period (millions)

172.8 173.7

Highlights and Significant Items

• • Net income during Q1-2022 was $15.5 million (Q1-2021: $10.9 million), due to higher copper production and higher metal prices. Q1-2022 EPS was $0.09 (Cdn$0.11) (Q1-2021: $0.06; (Cdn$0.08)).

• • In Q1-2022, the Company's average copper price was $4.64 per pound ("/lb") (Q1-2021: $4.08/lb) and the Company's average molybdenum price was $18.33/lb (Q1-2021: $10.88/lb).

• • Q1-2022 production was 16.5 million pounds ("M lbs") of copper 6% higher than Q1-2021 production of 15.5 M lbs due to higher tonnage, grade and recoveries from fresh tailings and higher grade and recoveries from Cauquenes.

• • Molybdenum production during Q1-2022 was 0.2 M lbs (Q1-2021: 0.4 M lbs) due to lower molybdenum content in fresh tailings.

• • Revenue during Q1-2022 was $53.8 million (Q1-2021: $48.9 million), including copper tolling revenue of $50.4 million (Q1-2021: $45.4 million) and molybdenum revenue of $3.4 million (Q1-2021: $3.5 million).

• • Copper tolling revenue is calculated from the Company's gross value of copper produced during Q1-2022 of $73.8 million (Q1-2021: $58.1 million) and fair value adjustments to settlement receivables of $5.6 million (Q1-2021: $8.5 million), less notional items including DET royalties of $22.3 million (Q1-2021: $16.0 million), smelting and refining of $6.2 million (Q1-2021: $4.7 million) and transportation of $0.5 million (Q1-2021: $0.5 million). The Q1-2022 settlement adjustments included $3.8 million in settlement adjustments in respect of Q4-2021 production, which are final adjustments (Q1-2021: $5.0 million of final adjustments).

• • The Company generated operating cash flow before changes in non-cash working capital1 of $20.6 million in Q1-2022 (Q1-2021: $20.0 million). Quarterly net operating cash flow was $21.4 million (Q1-2021: $28.1 million). Free cash flow to equity1 was $17.9 million (Q1-2021: $12.6 million).

• • Q1-2022 cash cost1 was $1.90/lb (Q1-2021: $1.88/lb).

• • Amerigo's financial performance is very sensitive to changes in copper prices. At March 31, 2022, the Company's provisional copper price was $4.64/lb, and final prices for January, February, and March 2022 sales will be the average London Metal Exchange prices for April, May, and June 2022, respectively. A 10% increase or decrease from the $4.64/lb provisional price would result in a $7.6 million change in revenue in Q2-2022 in respect of Q1-2022 production.

• • In Q1-2022, Amerigo returned $7.6 million to shareholders: $4.2 million were paid on March 21, 2022, through Amerigo's increased quarterly dividend of Cdn$0.03 per share, and $3.4 million were returned through the purchase of 2.4 million common shares for cancellation through Amerigo's ongoing Normal Course Issuer Bid ("NCIB"). Amerigo may repurchase for cancellation a further 6.9 million shares under the NCIB. Amerigo is reporting the NCIB monthly activity progress athttp://www.amerigoresources.com/investors/share-buybacks/.

• • In Q1-2022, the Company made scheduled debt payments of $nil (Q1-2021: $6.5 million) and paid $2.4 million for plant and equipment (Q1-2021: $0.6 million).

• • At March 31, 2022, the Company held cash and cash equivalents of $71.1 million (December 31, 2021: $59.8 million), restricted cash of $6.4 million (December 31, 2021: $4.2 million) and had working capital of $34.5 million (December 31, 2021: $24.6 million).

Investor Conference Call on May 5, 2022

Amerigo's quarterly investor conference call will take place on Thursday, May 5, 2022 at 11:00 am Pacific Standard Time/2:00 pm Eastern Standard Time. To join the call, please dial 1-888-664-6392 (Toll-Free North America) and enter confirmation number 54894230.

Upcoming Investor Conferences Participation

Amerigo will be participating in the Sidoti Micro Cap Virtual Conference (May 11 and 12, 2022), the Inflection Partners 2022 Virtual Conference (May 12, 2022) and the International Deal Gateway Mining & Resource Showcase (May 26, 2022).

CEO Aurora Davidson will present the Amerigo investment thesis and will be available for one-on-one meetings throughout each event.

About Amerigo and Minera Valle Central ("MVC")

Amerigo Resources Ltd. is an innovative copper producer with a long-term relationship with Corporación Nacional del Cobre de Chile ("Codelco"), the world's largest copper producer. Amerigo produces copper concentrate and molybdenum concentrate as a by-product at the MVC operation in Chile by processing fresh and historic tailings from Codelco's El Teniente mine, the world's largest underground copper mine. Tel: [phone]; Web:www.amerigoresources.com;Listing: ARG:TSX.

Contact Information

Aurora Davidson	Graham Farrell
President and CEO	Investor Relations
[phone]	[phone]
[e-mail]	[e-mail]

Summary Consolidated Statements of Financial Position March 31, 2022 $ thousandsDecember 31, 2021 $ thousands
Cash and cash equivalents Restricted cash Property plant and equipment Other assets Total assets Total liabilities Shareholders' equity Total liabilities and shareholders' equity	71,095 6,383 175,863 28,534	59,792 4,221 178,083 27,249
281,875	269,345
134,995 146,880	130,552 138,793
281,875	269,345
Summary Consolidated Statements of Income and Comprehensive Income Three months ended March 31,
2022 $ thousands 2021 $ thousands
Revenue Tolling and production costs Other expenses Finance gains (expense) Income tax expense Net income Other comprehensive loss Comprehensive income Earnings per share - basic & diluted	53,765 (32,339) (414) 114 (5,637)	48,907 (30,029) (2,837) (856) (4,260)
15,489 (137)	10,925 (699)
15,352	10,226
0.09	0.06
Summary Consolidated Statements of Cash Flows Three months ended March 31,
2022 $ thousands 2021 $ thousands
Cash flows from operating acitivities Changes in non-cash working capital Net cash from operating activities Net cash (used in) received from investing acitivities Net cash used in financing acitivites Net increase in cash Effect of foreign exchange rates on cash Cash and cash equivalents, beginning of period	20,609 765	20,040 8,096
21,374 (2,419) (7,755)	28,136 3,289 (6,892)
11,200 103 59,792	24,533 25 14,085
Cash and cash equivalents, end of period	71,095	38,643

38,643

10,925

10,226

0.09 0.06

8,096

3,289

24,533 25 14,085

1

Non-IFRS Measures

This news release includes five non-IFRS measures: EBITDA (i), operating cash flow before changes in non-cash working capital (ii), free cash flow to equity & free cash flow (iii) and cash cost (iv).

These non-IFRS performance measures are included in this news release because they provide key performance measures used by management to monitor operating performance, assess corporate performance, and to plan and assess the overall effectiveness and efficiency of Amerigo's operations. These performance measures are not standardized financial measures under IFRS and, therefore, amounts presented may not be comparable to similar financial measures disclosed by other companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS.

• (i) EBITDA refers to earnings before interest, taxes, depreciation, and administration and is calculated by adding back depreciation expense to the Company's gross margin.

  (Expressed in thousands)	Q1-2022 $ Q1-2021 $
  Gross Profit Add Depreciation and amortization	21,426 18,878
  4,924 4,376
  EBITDA	26,350 23,254

• (ii) Operating cash flow before changes in non-cash working capital is calculated by adding back the decrease or subtracting the increase in changes in non-cash working capital to or from cash provided by operating activities.

  (Expressed in thousands)	Q1-2022 $ Q1-2021 $
  Net cash provided by operating activities Add (deduct): Changes in non-cash working capital	21,374 28,136
  (765) (8,096)
  Operating cash flow before changes in non-cash working capital	20,609 20,040

• (iii) Free cash flow to equity ("FCFE") refers to operating cash flow before changes in non-cash working capital less capital expenditures plus new debt issued less debt and lease repayments. FCFE represents the amount of cash generated by the Company that can be used to pay for:

  • a) potential distributions to the Company's shareholders, and

  • b) any additional taxes triggered by the repatriation of funds from Chile to Canada to fund these distributions.

  Free cash flow ("FCF") refers to FCFE plus repayments of borrowings and lease repayments.

(Expressed in thousands)	Q1-2022 $ Q1-2021 $
Operating cash flow before changes in non-cash working capital Deduct: Cash used to purchase plant and equipment Repayment of borrowings Lease repayments	20,609 20,040
(2,419) (563)
- (6,547)
(283) (345)
Free cash flow to equity Add: 17,907 12,585 Repayment of borrowings Lease repayments - 6,547 283 345
Free cash flow 18,190 19,477