Amerigo Resources : Q1-2021 MD&A

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Amerigo Resources Ltd.

Management's Discussion and Analysis

For the Three Months Ended March 31, 2021

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T A B L E of C O N T E NT S

This Management's Discussion & Analysis ("MD&A") has the following sections:

1. About Amerigo - An executive summary of Amerigo's business and long-term contractual relationship with Corporación Nacional del Cobre de Chile ("Codelco")'s El Teniente Division ("DET")…(PAGE 3)
2. Purpose of MD&A and Identification of Non-GAAPMeasures - Information on accounting principles and other background factors to facilitate the understanding of this MD&A and related consolidated financial statements... (PAGE 3)
3. Quarterly Headlines - A summary of key operating and financial metrics during the three months ended March 31, 2021 ("Q1-2021) and as at March 31, 2020…(PAGE 4)
4. Five-QuarterFinancial Results and Summary Cash Flow Information - A summary of financial results and uses and sources of cash presented on a quarterly basis for the most recent five reporting quarters...(PAGE 6)
5. Operating Results - An analysis of production results for Q1-2021 compared to the three months ended March 31, 2020 ("Q1-2020")…(PAGE 7)
6. Financial Results - An analysis of financial performance during Q1-2021 compared to Q1-2020… (PAGE 8)
7. Comparative Periods - A summary of financial data for the most recent eight reporting quarters… (PAGE 13)
8. Financial Position and Borrowings - A review of cash flow components, summary of borrowings and analysis of financial position as at March 31, 2021… (PAGE 14)
9. Agreement with Codelco's DET - A summary of contractual arrangements with Codelco's DET… (PAGE 16)
10. Other MD&A Requirements -Transactions with related parties, critical accounting estimates & judgements, internal controls over financial reporting, commitments and cautionary statement on forward looking information…(PAGE 17)

THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS. REFER TO THE CAUTIONARY LANGUAGE UNDER THE HEADING "CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION" (PAGE 19).

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AMOUNTS REPORTED IN U.S. DOLLARS, EXCEPT WHERE INDICATED OTHERWISE.

ABOUT AMERIGO

Amerigo Resources Ltd. ("Amerigo") owns a 100% interest in Minera Valle Central S.A. ("MVC"), a producer of copper and molybdenum concentrates. MVC, located in Chile, has a long-term contract with Codelco's DET to process fresh and historic tailings from El Teniente. El Teniente, in production since 1905, is the world's largest underground copper mine. Refer to Agreements with Codelco's DET(page 16).

MVC currently operates under a tolling agreement with DET and title to the copper concentrates produced by MVC remains with DET. MVC earns copper tolling revenue, calculated as the gross value of copper produced at applicable market prices net of notional items, which include treatment and refining charges, DET copper royalties and transportation costs.

Molybdenum concentrates produced at MVC are sold under sales agreement with Chile's Molibdenos y Metales S.A. ("Molymet") and Glencore Chile SpA ("Glencore").

Amerigo's shares are listed for trading on the Toronto Stock Exchange ("TSX") and traded in the United States on the OTCQX.

PURPOSE OF MD&A and IDENTIFICATION OF NON-GAAP MEASURES

This MD&A of the results of operations and financial position of Amerigo together with its subsidiaries (collectively, the "Company"), is prepared as of May 5, 2021.

It should be read in conjunction with Amerigo's condensed interim consolidated financial statements and related notes for the three months ended March 31, 2021, and the audited consolidated financial statements and related notes for the year ended December 31, 2020.

Amerigo's interim financial statements are reported in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") as applicable to interim financial reporting. The financial data in this MD&A is derived from Amerigo's financial statements, except non-GAAP measures which are indicated as such.

Our objective in preparing this MD&A is to help the reader understand the factors affecting the Company's current and future financial performance.

Non-GAAP Measures

References are made in this MD&A to cash cost and total cost, two non-GAAP financial measures with no standardized meaning under IFRS and which may not be comparable to similar measures presented by other issuers.

Cash cost and total cost are commonly used as performance indicators in the mining industry and are an important performance metric for the Company.

A tabular reconciliation of cash and total costs to tolling and production costs in Q1-2021 and Q1-2020 is available on page 12.

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QUARTERLY HEADLINES

Key performance metrics	Q1-2021	Q1-2020	Change
			$	%
Copper produced (million pounds)1	15.5	12.1	3.4	28%
Copper delivered (million pounds)1	15.1	11.8	3.3	28%
Revenue ($ thousands) 2	48,907	15,638	33,269	213%
DET notional copper royalties ($ thousands)	15,991	5,192	10,799	208%
Tolling and production costs ($ thousands)	30,029	24,569	5,460	22%
Gross profit (loss) ($ thousands)	18,878	(8,931)	27,809	311%
Net income (loss) ($ thousands)	10,925	(4,029)	14,954	371%
Earnings (loss) per share	0.06	(0.02)	0.08	400%
Operating cash flow ($ thousands) 3	20,040	(4,132)	24,172	585%
Cash flow paid for plant and equipment ($ thousands)	(563)	(468)	(95)	20%
Cash and cash equivalents ($ thousands)	38,643	572	38,071	6656%
Borrowings ($ thousands)4	46,989	50,575	(3,586)	(7%)
MVC's copper price ($/lb)5	4.08	2.35	1.73	74%
MVC's molybdenum price ($lb)6	10.88	9.20	1.68	18%

Notes:

1. Copper production conducted under a tolling agreement with DET, and in Q1-2020 a slag processing agreement with DET.
2. Revenue reported net of notional items (smelting and refining charges, DET notional copper royalties and transportation costs).
3. Operating cash flow before changes in non-cash working capital.
4. At March 31, 2021, comprised of short and long-term portions of $14.9 and $32.1 million, respectively.
5. MVC's copper price is the average notional copper price for the period, before smelting and refining, DET notional copper royalties, transportation costs and settlement adjustments to prior period sales.
6. MVC's molybdenum price is the average realized molybdenum price in the period, before roasting charges and settlement adjustments to prior period sales

Amerigo reported quarterly net income of $10.9 million

• Net income during Q1-2021 was $10.9 million (Q1-2020: net loss of $4.0 million), due to higher production, higher metal prices and $5.0 million in positive fair value adjustments to Q4-2020 copper receivables.
• Earnings per share ("EPS") during Q1-2021 was $0.06 (Q1-2020: loss per share ("LPS") of $0.02).
• The Company generated operating cash flow before changes in non-cash working capital of $20.0 million in Q1-2021(Q1-2020: negative operating cash flow $4.1 million). Quarterly net operating cash flow was $28.1 million (Q1-2020: negative $1.4 million).

MVC produced 15.5 million pounds of copper during Q1-2021 at a cash cost of $1.88 per pound

• Q1-2021production was 15.5 million pounds of copper (Q1-2020: 12.1 million pounds) including 8.5
  million pounds from Cauquenes (Q1-2020: 5.7 million pounds) and 7.0 million pounds from fresh
  tailings (Q1-2020: 5.1 million pounds). In Q1-2020, 1.2 million pounds of copper were produced from slag processing.
• Molybdenum production during Q1-2021 was 0.4 million pounds (Q1-2020: 0.2 million pounds).
• Q1-2021cash cost (a non-GAAP measure equal to the aggregate of smelting and refining charges, tolling/production costs net of inventory adjustments and administration costs, net of by-product credits, page 12) decreased 3% to $1.88 per pound ("/lb") (Q1-2020: $1.94/lb).
• Q1-2021total cost (a non-GAAP measure equal to the aggregate of cash cost, DET notional copper royalties and DET molybdenum royalties of $1.07/lb and depreciation of $0.28/lb, page 12) increased

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to $3.23/lb (Q1-2020: $2.88/lb), due to an increase of $0.57/lb in DET notional royalties from higher metal prices.

MVC's average copper price in Q1-2021 was $4.08/lb

• In Q1-2021, MVC's copper price was $4.08/lb, 74% higher than the Q1-2020 copper price of $2.35/lb. MVC's molybdenum price was $10.88/lb, 18% higher than the Q1-2020 price of $9.20/lb.
• Revenue during Q1-2021 was $48.9 million (Q1-2020: $15.6 million), including copper tolling revenue
  of $45.4 million (Q1-2020: $13.3 million) and molybdenum revenue of $3.5 million (Q1-2020: $1.7 million). In Q1-2020 slag processing revenue was $0.7 million.
• Copper tolling revenue is calculated from MVC's gross value of copper produced during Q1-2021 of $58.1 million (Q1-2020: $27.2 million) and fair value adjustments to settlement receivables of $8.5 million (Q1-2020: ($5.3 million)), less notional items including DET royalties of $16.0 million (Q1-2020: $5.2 million), smelting and refining of $4.7 million (Q1-2020: $3.0 million) and transportation of $0.5 million (Q1-2020: $0.3 million). The Q1-2021 settlement adjustments included $5.0 million in settlement adjustments in respect of Q4-2020 production, which are final adjustments.
• MVC's financial performance is very sensitive to changes in copper prices. MVC's Q1-2021 provisional copper price was $4.08/lb, and final prices for January, February, and March sales will be the average London Metal Exchange ("LME") prices for April, May, and June, respectively. A 10% increase or decrease from the $4.08/lb provisional price used at March 31, 2021 would result in a $6.2 million change in revenue in Q2-2021 in respect of Q1-2021 production.

At March 31, 2021, cash balance was $38.6 million, with working capital of $11.5 million

• At March 31, 2021, the Company's cash balance was $38.6 million (December 31, 2020: $14.1 million)
  and the Company had working capital of $11.5 million (December 31, 2020: working capital deficiency of $6.1 million).
• In Q1-2021, the Company received $3.9 million in proceeds from the sale of investments.
• In Q1-2021, the Company made scheduled debt payments of $6.5 million (2020: $4.7 million) and paid
  $0.6 million for plant and equipment (2020: $0.5 million)
• Refer to Cautionary Statement on Forward Looking Information (page 19).

COVID-19 effect on financial results and ongoing uncertainty

• In March 2020, the World Health Organization declared a global pandemic related to COVID-19. The current and expected impacts from the pandemic on the global economy are anticipated to be far reaching. To date, there has been significant volatility in stock markets, commodity and foreign exchange markets and the global movement of people and some goods has become restricted. There is significant ongoing uncertainty surrounding COVID-19 and the extent and duration of the impact that it may have on the demand and on the market prices of copper and molybdenum, and on global financial markets.
• The Company's financial results were substantially impacted during the first half of 2020 as a result of lower copper prices. Commodity market fluctuations resulting from COVID-19 may impact the Company's financial results and liquidity.
• MVC has not experienced production interruptions or significant disruption to its supply chain because of the COVID-19 global pandemic.

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