Amerigo Resources : Q1 2026 Investor Conference Call (Text)

Event ID: 2833993 Event Title: Amerigo Resources Q1 2026 Results Conference Call Date: April 30, 2026 Audio Duration: 00:45:42 Executives:

Graham Farrell - Founder & President of North Star Investor Relations

Aurora Davidson - President & Chief Executive Officer of Amerigo Resources Ltd. Carmen Amezquita - Chief Financial Officer of Amerigo Resources Ltd.

Operator: Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amerigo Resources Q1 2026 Results Conference Call.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

I would now like to turn the call over to Graham Farrell, North Star Investor Relations. Please go ahead.

Graham Farrell: Thank you, operator. Good afternoon, and welcome everyone to Amerigo's quarterly conference call to discuss the company's financial results for the first quarter of 2026. We appreciate you joining us today. This call will cover Amerigo's financial and operating results for the first quarter ended March 31st, 2026. Following our prepared remarks, we will open the conference call to a question-and-answer session. Our call today will be led by Amerigo's President & Chief Executive Officer, Aurora Davidson, along with the Company's Chief Financial Officer, Carmen Amezquita.

Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties. The company's actual results may differ significantly from those projected or suggested by any forward-looking statements due to a variety of factors, which are discussed in detail in our SEDAR filings.

I will now hand the call over to Aurora Davidson. Please go ahead, Aurora.

Aurora Davidson: Thank you for taking the time to listen to Amerigo's Q1 2026 Earnings Call. The first quarter of 2026 was operationally and financially strong, and consistent with what shareholders should expect of Amerigo. Our operation at MVC continued to operate steadily, predictably, and safely, through market noise and macro uncertainty.

Today, I am taking a different approach to my comments, and I wanted to first share with you where I believe value is ultimately created at Amerigo. One item sits beneath everything else: workplace safety. During the quarter, MVC reached four full years without a single lost-time accident. This is not an abstract milestone. It means that for four years, 291 MVC employees came to work, did demanding industrial jobs, and went home safely to their families. This safety record reflects thousands of routine decisions made correctly by operators, supervisors, and management every single day. And remember, this record refers to any injury that keeps someone from coming to work, not just one that might negatively impact operations.

This tells you something essential about this business that you, the shareholders, own MVC is a safe operation. A safe operation is a disciplined operation. A disciplined operation is a reliable operation. And reliable operations generate durable cash flow. Durable cash flow brings me to something we can connect directly to MVC's safety record-our recent performance dividend.

Based on our Q1 operating performance, and consistent with Amerigo's capital return strategy, we announced a $0.16 performance dividend a few days ago. Those two things, four years without lost time accidents, and a performance dividend in the same amount as four quarterly dividends, are not coincidences, and are not independent of each other. The performance dividend is not simply a financial gesture layered on top of the business at a time of high copper prices; it is the outcome of how the business is run. When an asset operates safely, steadily and without disruption, it does not demand surprise infusions of capital, does not consume management's attention to firefighting problems, and does not introduce additional volatility into cash flow. That extra stability gives us the confidence to maximize the return of capital to shareholders when performance supports it, without compromising the balance sheet or the long-term life of the business. This is the essence of our performance dividend.

At Amerigo, the return of capital is the natural consequence of a simple business model, consistently well-executed in a disciplined way, a single-asset operation with no growth-capital burden, and a company managed to generate cash across cycles. Q1 reaffirmed the value of that model.

Now, let me spend a few minutes on the quarterly operational results. Q1 unfolded exactly according to plan. We delivered solid production and completed our annual maintenance shutdown without disruption or compromising safety or reliability. Plant availability was strong, costs came in well below expectations, and performance exceeded our internal quarterly production targets. Maintenance quarters are challenging ones, and I was very pleased with how the team executed. Q1 is expected to be the lowest production quarter of the year due to the planned shutdown, and we still generated very strong operational results, which underpin the financial results released yesterday.

I will not spend much time on the financial results as Carmen will walk us through them.

Sticking to the headlines, Q1 was an exceptionally strong quarter for Amerigo, particularly given the lower production impact from the plant shutdown. Net income was $14.7 million, EBITDA was $32.8 million, and free cash flow was $14.5 million. These financial results were fueled by the operational results previously discussed, the strongest LME copper prices on record for any given quarter, and an MVC cash cost of $1.82 per pound, well below our guided annual cash cost.

Our production and cash cost guidance for the year remains unchanged. During Q1, the three tools of the Capital Return Strategy were used: a performance dividend of CAD $0.5 was paid in January, a quarterly dividend of CAD $0.4 was paid in March, and through the quarter, Amerigo retired 1.5 million shares. In total, $16.5 million was allocated to the CRS in Q1.

I have received many emails from shareholders asking how current global events impact our operation and costs. The short answer is that, to date, the impact on Amerigo has been marginal, and we do not expect that to change. The escalation of the conflict involving Iran has very real second-order effects, particularly through energy markets and industrial inputs. In Chile, this has been reflected in higher diesel prices and a sharp increase in sulphuric acid prices, which are widely used across the copper industry. Sulphuric acid is a critical input for SXEW operations, and the disruption of supply routes, combined with tighter export availability, has driven significant price escalation. However, MVC does not use sulphuric acid in its process. The acid price escalation that's featured so prominently in industry discussions has no impact on MVC's operating performance or cost structure. This insulation is not temporary; it is permanent. I should note that around 20% of global copper production comes from the SXEW process, so we can add acid scarcity to the list of fundamental reasons for a tightening copper market moving forward.

Also, as a result of the conflict, diesel prices in Chile have increased substantially. However, diesel accounts for only 5% of MVC's total energy consumption, with the majority of our energy coming from electricity under a long-term contract from 100% renewable sources. That means that the economic impact of diesel price movements is not material to MVC's overall cost profile. Carmen will discuss the cost impact of current diesel prices further.

Hopefully, this helps you to understand why MVC was able to post excellent cash costs at a time when many operators faced rising input costs and volatility driven by factors outside their control.

Looking forward, in 2026, we expect MVC's operating profile and cost inputs to remain consistent. While volatility in geopolitics and commodity markets may persist, MVC is in a strong position, with limited exposure to the most volatile cost inputs due to the inherent structure of our business.

I will comment briefly on copper price performance so far in 2026. Copper entered the year with strong momentum, with a sharp upward price movement in January, supported by concerns about supply reliability, continuing mine disruptions from 2025, and continued investor positioning around the long-term electrification theme. As we moved into February and early March, copper remained well supported, but price action became more volatile. Markets began to weigh the strong, long-term narrative against near-term uncertainty. This uncertainty included higher energy prices, rising interest rates, and geopolitical risks. The escalation of the Iran conflict then added another layer of complexity and volatility. Copper prices reacted as did other industrial commodities, as market participants sought safety and liquidity.

By the second half of March, copper prices had pulled back from their January highs, touched quarterly lows, but then stabilized. I should point out that, even after that correction, prices have remained well above historical averages and materially higher than levels seen through most of 2024 and early 2025. Now, at the end of April, although volatility has not disappeared, copper prices appear to be supported by tight concentrate markets and a continued focus on medium-term supply constraints.

The key point from management's perspective is this: 2026 has not been a straight-line price environment. A strong start, significant volatility, and periodic pullbacks have characterized the year. These pullbacks have been driven more by macroeconomic and geopolitical factors than by any sudden change in copper fundamentals, which, if anything, now look even more favorable. This environment reinforces the importance of operating discipline and resilience, rather than simply relying on price direction for business success. Our success in Amerigo MVC does not depend on calling the copper price cycle. We focus on consistent operational performance, measured cost exposure, and disciplined capital allocation. By doing this, we know that the business will perform well across a range of copper price outcomes. The copper price environment in early 2026 illustrates why that approach matters.

I will end my comments by addressing the Capital Return Strategy. Q1 has been a great example of how central the CRS is to value creation at Amerigo. As I mentioned a few moments ago, in Q1, Amerigo returned $16.5 million to shareholders through a balanced mix of dividends and share buybacks. After the quarter end, on April 13th, the Board declared a performance dividend of CAD $0.16 per share, payable on May 13th. And then, on April 27th, the Board declared our nineteenth consecutive quarterly dividend of CAD $0.04 per share, payable on June 18th.

Why do I highlight this tremendous return of capital since the beginning of the year? Well, first, it demonstrates the CRS's consistency. A regular quarterly dividend, now maintained for 19 consecutive quarters, establishes a clear baseline return to shareholders. Based on our March 31st, 2026, closing share price of CAD $5.03, those quarterly dividends alone represent an annualized yield of approximately 3.2%.

Second, it shows the CRS's flexibility in quickly returning excess cash. When we add to this base annualized yield the performance dividends paid on January 15th and May 13th, our total dividend distribution translates into a projected effective annual yield of approximately 7.4%.

That level of yield gives important information about where Amerigo's share price sits today. The yield captures a period when shareholders received concentrated returns through quarterly dividends, performance dividends, and buybacks. It also does not reflect anything beyond the continuation of our quarterly dividend.

Given that, we don't think that the share price has fully adjusted to reflect the potential for the levels of return of capital that we had in Q1. As capital is returned consistently, and the market understands our CRS even better than it does now, the yield should normalize at a lower level through share price appreciation. Although performance dividends are discretionary by design and linked to excess cash generation, Q1 was a tremendous example of how quickly and powerfully we can deploy performance dividends. Performance dividends clearly allow for a quicker return of significant capital than a reset of the base dividend, particularly during periods of copper price volatility. So, over time, what are the odds that investors will increasingly equate performance dividends with a permanent reset of our base dividend? Certainly, the more performance dividends we pay, the stronger the argument. But after demonstrating the return of capital in Q1, I think those odds are already quite high.

That leads me to a final question of this call today. If a 7.4% yield level is not an appropriate normalized yield for this superbly executed, safe business, what is? I leave that to the market, which will ultimately decide. But in my mind, the answer is that the yield should be much lower.

With that, I'll let Carmen discuss the quarter's financial results.

Carmen Amezquita: Thanks, Aurora. I am pleased to present the financial report for the first quarter of 2026 from Amerigo and its MVC operation in Chile.

The company had strong production for the first quarter despite completing its annual maintenance shutdown. 14.3 million pounds of copper were produced, which was 8% higher than the 13.2 million pounds produced during the first quarter of 2025. Higher production was further supported by the strongest quarterly London Metal Exchange copper prices on record, resulting in an average copper price recognized by MVC during Q1 2026 of $5.70 per pound compared to $4.42 per pound in Q1 2025. This increased production, combined with a higher average copper price and lower cash cost, resulted in a net income of $14.7 million, up from $3.3 million in Q1 2025.

I will discuss the key variances in the financial results for Q1 2026 compared to Q1 2025. During the quarter, there were increases of $16.3 million in copper tolling revenue and $5.6 million in molybdenum revenue. These were offset by increases of

$15.3 million in DET notional copper royalties, $4.8 million in tolling and production costs, and $7.4 million in income tax expense. Revenue in Q1 2026 was 50% higher at

$66.2 million compared to $44.2 million in Q1 2025. This included copper tolling revenue of $56.9 million and molybdenum revenue of $9.2 million.

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