Mr. Rob Henderson reports

AMERIGO REPORTS ANNUAL 2018 AND Q4-2018 FINANCIAL RESULTS

Amerigo Resources Ltd. has released financial results for fiscal 2018. The company's 100-per-cent-owned operation, Minera Valle Central (MVC), located near Rancagua, Chile, met annual copper production guidance of 65 million pounds at an annual cash cost of $1.56 per pound. Molybdenum production of 1.9 million pounds was stronger than guidance. Amounts in this news release are reported in U.S. dollars, except where indicated otherwise.

Amerigo's annual net income was $10.5-million, or six cents earnings per share (EPS). Cash generated from operations was $27.8-million and $27.2-million before and after changes in working capital, respectively. The company's cash position at the end of the year was $21.3-million.

"MVC had an outstanding year. They reduced cash cost, increased profits and cash flows, and, most importantly, completed the installation of the new plant, enabling significantly higher copper production. The fundamentals for the copper market remain strong with demand exceeding supply, and I believe that once trade tensions between the United States and China are resolved, the copper price will increase," commented Rob Henderson, Amerigo's president and chief executive officer.

In Q4 2018, the company produced 18.5 million pounds of copper and 600,000 pounds of molybdenum at a cash cost of $1.45 per pound. Net income in the quarter amounted to $5.1-million (three cents EPS). Cash generated from operations was $9.2-million and $7.8-million before and after changes in working capital, respectively.

Amerigo reported stronger annual net income and cash flow:

• Net income amounted to $10.5-million (2017 -- $8-million).
• EPS amounted to six cents basic and diluted (2017 -- five cents basic and four cents diluted).
• Cash flow generated from operations before changes in non-cash working capital amounted to $27.8-million (2017 -- $26.4-million).

MVC's average copper price in 2018 was $2.92 per pound:

• MVC's copper price was $2.92 per pound (2017 -- $2.83 per pound) and MVC's molybdenum price was $11.84 per pound (2017 -- $8.20 per pound).
• Revenue was $136.8-million (2017 -- $134.0-million), including copper tolling revenue of $118.4-million (2017 -- $119.5-million) as well as molybdenum and other revenue of $18.4-million (2017 -- $14.5-million).
• Copper tolling revenue is calculated from MVC's gross value of copper produced of $188.6-million (2017 -- $172.7-million) and fair value adjustments to settlement receivables of negative $5.3-million (2017 -- $7.1-million), less notional items, including DET royalties of $41.1-million (2017 -- $36.4-million), smelting and refining of $21.5-million (Q3 2017 -- $21.7-million) and transportation of $2.2-million (2017 -- $2.2-million).
• MVC's financial performance is very sensitive to changes in copper prices. MVC's Q4 2018 provisional copper price was $2.77 per pound and final prices will be the average London Metal Exchange prices for January, 2019, February, 2019, and March, 2019. A 10-per-cent increase or decrease from the $2.77 per pound provisional price used at Dec. 31, 2018, would result in a $4.9-million change in revenue in 2019 in respect of 2018 production.
• Amerigo remains fully leveraged to the price of copper.

MVC achieved record production at a cash cost of $1.56 per pound:

• Annual copper production of 65 million pounds (2017 -- 62.5 million pounds) included 43.7 million pounds from Cauquenes (2017 -- 39.3 million pounds) and 21.3 million pounds from fresh tailings in 2018 (2017 -- 21.8 million pounds). In 2017, 1.5 million pounds of copper were also produced through a tolling agreement with Minera Maricunga, which expired that year.
• Molybdenum production was 1.9 million pounds (2017 -- 1.6 million pounds).
• Cash cost (a non-GAAP (generally accepted accounting principle) measure equal to the aggregate of smelting and refining charges, tolling/production costs, net of inventory adjustments, and administration costs, net of byproduct credits) decreased to $1.56 per pound (2017 -- $1.64 per pound).
• Total cost (a non-GAAP measure equal to the aggregate of cash cost, DET notional copper royalties and DET molybdenum royalties of 68 cents per pound and depreciation of 23 cents per pound) decreased to $2.47 per pound (2017 -- $2.50 per pound), due to lower cash cost.

MVC's phase 2 project met the banks' completion test in December, 2018:

• MVC's new rougher flotation cells started to produce concentrates on Aug. 20, 2018, and the new cleaner flotation circuit came on-line on Oct. 12, 2018. Installation of a regrind mill, originally part of the phase 2 expansion, is estimated to be completed in June, 2019.
• The 60-day production test required under the Cauquenes expansion finance loan was completed on Dec. 21, 2018. MVC is now ramping up to full capacity and the project's $1.5-million concentrate regrind mill is expected to be installed in June, 2019.
• The phase 2 capital expenditure (capex) is estimated at $39.9-million -- including the regrind mill -- compared with a budget of $35.3-million, primarily due to a 9.3-per-cent appreciation of the Chilean peso during the construction period compared with budget, and additional equipment installed during commissioning. Remaining phase 2 capex payments of $3.1-million will be made in 2019.
• MVC also expanded its molybdenum plant in order to process the additional molybdenum available from the Cauquenes expansion. The molybdenum plant expansion had a cost of approximately $7.8-million and was financed through a five-year capital lease agreement.
• In 2019, the company expects to produce 80 million to 85 million pounds of copper at a cash cost of $1.30 to $1.45 per pound, as well as production of 2.5 million pounds of molybdenum. In Q1 2019, production will be lower than average and cash cost will be higher than average as MVC's mine plan extracts lower-quality material from Cauquenes, further affected by a longer-than-expected annual maintenance shutdown.
• In 2019, MVC expects to incur $5.8-million in sustaining capex.

Cash balance at year-end was $21.3-million, debt repayments in 2018 were $19.7-million:

• At Dec. 31, 2018, the company's cash balance was $21.3-million.
• The company had a $16.9-million working capital deficiency, which was caused by $22.5-million in scheduled bank debt repayments in the following 12 months.
• Amerigo does not consider that its working capital deficiency constitutes a significant liquidity risk, as it anticipates generating operating cash flow to meet current liabilities as they come due, assuming copper prices remain at levels above $2.70 per pound.
• Borrowings at year-end were $66.2-million. In 2018, MVC received debt proceeds of $23.3-million, which were used in the Cauquenes phase 2 expansion. MVC also made debt repayments of $19.7-million on the phase 1 expansion loan and on a loan with Codelco's Division El Teniente, which was fully repaid in the year.

Investor conference call on Feb. 22, 2019

Amerigo's quarterly investor conference call will take place on Friday, Feb. 22, 2019, at 11 a.m. PT (2 p.m. ET).

To join the call, please dial 1-800-273-9672 (toll-free North America) and let the operator know you wish to participate in the Amerigo Resources conference call.

The analyst and investment community are welcome to ask questions to management. Media can attend on a listen-only basis.

About Amerigo Resources Ltd. and Minera Valle Central

Amerigo Resources is an innovative copper producer with a long-term relationship with Corporacion Nacional del Cobre de Chile, the world's largest copper producer.

                    2018 AND 2017 ANNUAL KEY PERFORMANCE METRICS  
 
                                                                        Years ended Dec. 31,       
                                                                        2018           2017  
   
Copper produced (million pounds)                                        65.0           62.5  
Copper delivered (million pounds)                                       63.9           62.9   
Percentage of production from historic tailings (%)                       68             63      
Revenue ($ thousands)                                                136,833        134,027   
DET notional copper royalties ($ thousands)                           41,088         36,388     
Tolling and production costs ($ thousands)                           111,855        107,986    
Gross profit ($ thousands)                                            24,978         26,041     
Net income ($ thousands)                                              10,495          7,989   
Earnings per share -- basic                                             0.06           0.05    
Operating cash flow ($ thousands)                                     27,794         26,387  
Cash flow paid for purchase of plant and equipment ($ thousands)     (35,957)       (14,693) 
Cash and cash equivalents ($ thousands)                               21,338         27,524   
Borrowings ($ thousands)                                              66,212         63,067  
MVC's copper price ($/lb)                                               2.92           2.83    
MVC's molybdenum price ($/lb)                                          11.84           8.20    

SUMMARY CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME  
    
                                                Year ended Dec. 31,             
                                                2018          2017  
                 
Revenue                                     $136,833      $134,027     
Tolling and production costs                (111,855)     (107,986)   
Other expenses                                (5,230)       (8,089)     
Finance expense                               (4,306)       (5,112)     
Income tax                                    (4,947)       (4,851)     
Net income                                    10,495         7,989       
Other comprehensive (loss) income             (1,089)        1,055       
Comprehensive income                           9,406         9,044       
Earnings per share -- basic                     0.06          0.05      
Earnings per share -- diluted                   0.06          0.04      

We seek Safe Harbor.