Amerigo Resources Ltd T.ARG

Capex for new copper projects

[Bwrbhk]

Faraday Copper a PEA on a copper project in Arizona in May 2023. The estimated capex for an open pit copper that would produce 106 million lbs. of copper per year was US$798 million, which works out to US$7.52 (C$10.17) per annual lb. of copper production.  The mine has to go through a complex permittting process, which TD Securities analyst estimate will takeat least 5 years and then will have to raise almost US $800 million to finance to the production stage.  The company has a market cap of $104 million and TD recomends it as a buy with a price target of $1.15 (twice the current price).  Antofagasto (a current producer) recently announce that they had borrowed US$2.5 billion to expand their Centinela Mine by 144,000 tonnes/annum.  This works out to a capex of C$ 10.64/lb. of annual capacity.
ARG has a market cap of $246 million and produces 60+ million lbs. of copper/annum.  That works out to $4.10/annual lb. of capacity. At $10/annual lb. of capacity ARG should be trading at around $3.60 and even at that level, the shares would be yield north of 3%.
The shares are grossly undervalued.

[goldens]

And those project are sure to go over budget. If copper stays above $4/lb for any length of time (which it should we should be moving over $2 easily. The world needs more copper even at current consumption rates and once China comes back it will makes supplies even tighter (not to mention India's expansion). Just my opinion but I think we have a very bright future.

[downwithdotcom1]

so why can't ARG make in-roads on a 2nd deposit after all these years ???? dwdc

[francoisl13]

What do you mean by 2nd deposit? Amerigo produces copper from the waste material of the world’s largest underground copper mine, essentially eliminating the world’s need for a midsized copper mine. 

[lechmeir]

What do you mean by 2nd deposit? I'm going to guess the poster meant a 2nd endeavor like this one. Right now, I think they're focused on staying right sized.  Add another dollar to the price of copper, and we're going to be swimming in cash.  That question might make more sense when we get there.  On the other hand special dividends sound pretty nice too. 

[downwithdotcom1]

Just checked their current presentation...now NO MENTION OF "CLONING" or "REPLICATION" of this busines model.WHY?? For years they identified the actual locations of a number of deposits in CHILE where there were long life tailing reserves for this to also work. The current CEO would  talk about this on a number of historical video interviews - just go to the video library

[Bwrbhk]

I think that they have changed their corporate strategy by returning capital to shareholders via dividends and share buybacks.  i would think that they have studied the pros and cons of investing many millions in another operation vs. the current strategy and the current strategy came out on top.

[goldens]

Their strategy is one of capital return. After the last expansion not going so well they changed direction but if we see copper sustaining $4+ and they get the float down to around 100 million then we might see an expansion. Otherwise this is a pure copper dividend play. Not really sure why you are back here asking questions you know the answer too????

[downwithdotcom1]

Not really sure why you are back here asking questions you know the answer too???? Exactly who made you the moderator of this bullboard??? You don't like my question then put me on IGNORE you total m@ron...dwdc

[goldens]

Ooh touched a nerve did I. Lol  Still licking your wounds while we have been collecting a juicy dividend. Don't like my question???? You can do the same.