Amerigo Resources Ltd T.ARG

q price adj and more

[123600]

price adjustments for each Q are adjusted by the LME ( spot i assume) average price three months forward. Thus 2Q  revenue will be adjusted down from $4.10 in Q3
July average around 3.47 .63c or 15%
aug average around 3.53 .57c or 14 %
sept a guess around 3.38  .72c or 17%
Their MDA states a 10% differentail with cost over $6 ml. so lets say a charge of $9/10 ml in the third Q
do not understand why  contract has forward price adjustment or why ARG doesn't firm the price with fwd contracts.
as an aside the all in cost of production is now firmly above market prices

[goldens]

So you say the all in costs are firmly above market prices? Can you please post those calculations. 

[sclarda]

goldens wrote So you say the all in costs are firmly above market prices? Can you please post those calculations.  ------------------------------------------------------------- In the second quarter of this year ARGs cash cost was $2.01 per pound.  They produced just under 15 million pounds of copper in the quarter. DET royalties were aprox.  $18.3 million for the quarter or

[Taran83]

Good cost overview sclarda! I would like to add, that at a copper price of 3.4$, the royalty should be 0.72$, 0.86$ for the fresh tailings and Cauquenes, respectively. At 3.3$ copper, those change to 0.68$ and 0.82$. Additionally, ARG has some sustaining cost (used to be around 6M$ per year) and G&A (ca. 2M$). The last two years, they also invested some additional CAPEX (e.g. to increase

[goldens]

Without the table they use to calculate the royalties which are based on actual copper prices received it is all just an estimate. They left a low dividend when copper was riding high because they wanted to have a secure dividend so I doubt they will lower it over the short term. In the past they have stated that this dividend is easily support at $3 so I don't believe they are F'd as you

[goldens]

They have a partial table on their website if you download their presentation page 27. $3 = $0.7 $3.20 = $0.78 $3.40 = $0.86 $3.50 - $0.91 $3.60 - $0.95 They also mention in that document that Codelco has been very willing to work with them in times of low copper prices. Probably because they are reducing the waste material Codelco is producing. Page 18 also states that Average $3.80

[sclarda]

Taran83 wrote Good cost overview sclarda! I would like to add, that at a copper price of 3.4$, the royalty should be 0.72$, 0.86$ for the fresh tailings and Cauquenes, respectively. At 3.3$ copper, those change to 0.68$ and 0.82$. Additionally, ARG has some sustaining cost (used to be around 6M$ per year) and G&A (ca. 2M$). The last two years, they also invested some additional CAPEX (e.g