Amerigo Resources Ltd T.ARG

RE:RE:RE:Dividends

[Joe455]

savyinvestor333 wrote: Well I agree the future looks very bright and the dividends are imminent but some of your numbers are suspect. We averaged around 11 million in profit for the last 2 quarters. This quarter and next we have to seal with maintenance shutdowns so lower days producing. we also have lower copper prices which have a double whammy in that pricing that was paid needs to be paid back because of the 3 month settlement rule. So yes we are near 50 million in the bank but I see no path to 100 million in 9 months. I am positive our earnings for the coming quarter will be less than the last quarter Just keeping it real here.

sclarda wrote: prested wrote

You can be sure that once bitten twice shy applies to ARG when it comes to paying dividends. If or when they resume them it will be with the intention of maintaining them, because the SP crashed and has never recovered from the last cancellation. I'd say that we could see a return to the $3.00 level within a year of dividend resumption. GLTAL

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  While i agree it is good to be cautious the financial situation that ARG is in now is nothing like the condition they were in years ago when they had to cut the dividend.  

ARG now has their expansion project complete and producing. Copper prices are high and expected to stay their or go higher.  They currently have  $35 million US in debt and $53 million US in cash.  At this time they have  $18 million US more in cash than debt and are adding $6 million US per month in cash to the pile every month. 

ARG could easily pay a 10% dividend and still bank $ 50 million US in cash before income taxes etc. That means they could start paying a  10% dividend today and still  pay off their existing  $35 million US debt in 9 months from now while not touching their  $53 million US cash pile.

As it stands ARG could pay off the  $35 million US in cashflow in the next 6 or 7 months while not touching their $53 million US cash hoard.

Anyway you look at it ARG is a cashflow machine with cash piling up everywhere. Whether they pay a dividend or pile up $100 million US in the bank in the next 9 months which is equal to aprox.  half their current market cap.  this company is going in the right direction very quickly and unless their is a major drop in copper prices the cash pile will get so big that the market will eventually have to notice. Eventually they will have to do something with all that cash whether a dividend, share buybacks, expansion or taking over another operation.

Although it could be awhile yet, patience here should payoff very well one of these days.  
 

It's a good day to buy.