Aurora Davidson - EVP and CFO Rob Henderson - President and CEO Rob Henderson - COO

Joseph Reagor - Newport Beach Wayne Atwell - Greenwich

Thank you, Mary. Good morning, ladies and gentlemen and welcome to the annual investor conference call of Amerigo Resources Limited on Friday, February the 26th, 2016.

I'm Aurora Davidson, the Company's Executive Vice President and Chief Financial Officer. Before we begin our presentation, let me caution you that our comments and discussions will include forward-looking information within the meaning of applicable securities legislation.

Such forward-looking information will include among other things forecasts and projections about our copper production for 2016, which involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to be materially different from such forecasts and projections. Therefore, although we believe that the anticipated future results, performance or achievements expressed or implied by the forward-looking information are based on reasonable assumptions and expectations.

You should not place undue reliance on such forward-looking information. You should review our press release issued on February the 24th, and our other documents filed with the securities authorities in Canada, including our annual information form under the heading Description of the Business Risk Factors.

This document describes the material factors and assumptions that were applied in drawing the conclusions and making the forecasts and projections as reflected in the forward-looking information and the material factors that could cause our actual results, performance or achievements to differ materially. Or except as required by law, we undertake no obligation to update or revise any forward-looking information made in this presentation.

Now, I would like to introduce the Company's President and Chief Executive Officer, Rob Henderson.

Thank you, Aurora. And thank you everyone for joining the call.

The headline results we posted yesterday showed significantly lower annual revenue and earnings in comparison with prior years. Amerigo reported revenues of $52 million and a net loss of $17 million for the year.

Unfortunately this less than satisfactory result was due to low production and low copper price that occurred during the year of positive change at MVC. The first phase of the long awaited Cauquenes development was completed in December 2015.

We invested $67 million into the infrastructure required to deliver the high grade tailings from the historic Cauquenes tailings deposit into the existing mill at MVC. We're now set up for generating the higher copper production and significantly reduced operating costs well into the future.

I'm pleased to report that the MVC team performed very well to complete the Cauquenes project in December, 7% under budget and most importantly they achieved an unblemished safety record of zero incidents. Copper production will continue to increase over the first half of this year before MVC hits its full stride in Q3 and Q4.

The ramp up in production from Cauquenes have been slower than expected mainly due to low grade and low recovery in the plant. Zones of low grade oxide material in the surface layer of the deposits appear to be more extensively modelled resulting in mine copper grades of 0.2% compared to the average mineral resource grade of 0.27% for the deposits.

However grades are currently increasing and expected to be higher in the second half of the year. MVC's annual production guidance for 2016 is to deliver 55 million to 60 million pounds of copper at an annual cash cost of $1.65 to $1.85 pounds per copper.

Capital expenditures will be significantly lower than in the past and this year we expect to spend $5 million in sustaining CapEx primarily associated with building deeper extraction slumps at Cauquenes. The average copper price in 2015 was $2.47 a pound compared to $3.14 per pound in 2014.

And it's carried on going down, and today the copper price seems to have stabilized at around $2.10 per pound and this is significantly lower than prior analyst expectations. And consequently this low price environment has sharpened our focus on cost management and has resulted in major decisions in 2015, such as suspension of Molybdenum production in Q1 and suspension of copper production from Colihues in Q3.

Operational trade off decisions between lower production or lower costs swung towards cost reductions often at the expense of tonnes of copper produced. MVC has reduced headcount by 20% and has eliminated all mine essential contracts and we expect to be producing copper at a cash cost below $1.70 per pound in the second half of the year.

MVC has been in negotiations with a power provider and they have agreed to reduce the electricity tariff providing us savings of approximately $1.5 million per year in 2016 and '17 and $3.5 million savings per year after 2018. We're currently in negotiations with El Teniente to reduce the royalty rate of Cauquenes.

During this time with low copper price I think it's important to note, our relatively strong liquidity and financial position. At the end of the year the Group had $9 million in cash and had approximately $18 million undrawn committed credit facilities and 10 million in undrawn from the El Teniente copper price support facility, which is available to us at a monthly rate of $1 million when the copper price is below $2.18 per pound.

Our partner El Teniente has been supportive of MVC and have agreed to defer royalties for four months, March to June 2016, until we reach agreement on the new royalty rate. MVC has also reached an agreement with its power provided to defer 20% of power payments from the first half of this year to the second half.

MVC has a $64 million loan facility with BBVA and EDC and as of the end of the year 2015 MVC had received funding of $59.6 million for the Cauquenes expansion. Loan repayments commenced in June this year and we expect to be able to meet all of our obligations from cash flow generated from operations and from our credit facilities that need be.

Our key objective this year is to complete the Cauquenes ramp up program and ensure MVC’s liquidity. We’ve made a substantial investment into MVC and I’ll are now well position in today’s challenging copper price environment.

Our outlook for 2016 to is to generate record copper production and lower cash cost. I’ll now hand you over to Aurora to discuss the financials.

Thank you, Rob. As you well said over the financial results for 2015 were less than satisfactory.

The real story for the year was the Cauquenes expansion through which MVC and Amerigo are positioned to sustain operations and need financial commitment in the current low copper price environment. There were three key achievements in 2015, securing the financing with BBVA and Export Development Canada constructing Phase 1 Cauquenes on-time and $5 million below budget and achieving substantial cost reductions at MVC where tolling and production costs were $20 million lower than in 2014.

The company’s standing cash position at year-end was $9 million. MVC’s projected copper production for 2016 of £55 million to £60 million of copper should result in an annualized cash caught in the range of $1.70 per pound returning MVC to generating positive operating cash flow.

CapEx, which has traditionally been a substantial item at MVC, is projected to be $5 million or $0.09 per pound in 2016. The El Teniente royalty, which is tied up to copper prices, shows that under our current copper price of $2.10 would be approximately $0.38 per pound.

Our debt service commitments for 2016 are $14 million or approximately $0.25 per pound. In 2016, MVC is accessing $10 million from a prime support facility from El Teniente and rate of $1 million a month in the copper price is below $2.80.

This considerations put together allow us to meet obligations as that will do 2016 under the current price scenario. And as copper price fall below 195, the current contract provisions with El Teniente would results in a substantial decrease in royalties that would allow us to operate and meet commitment at lower copper prices without having to access further debt facilities.

Liquidity management at MVC is being conducted at a very granular level. As Rob mentioned, MVC have secured rate reductions and payment deferrals with its power provider, which is MVC’s most significant cost.

And a four months deferral of royalties has been granted by El Teniente while royalty discussions take place. We look forward to reporting good progress towards the annual goals at the end of Q1.

That’s it from us. And I think we are open for questions now.

I guess a couple of questions and thanks obviously for doing the call today. I realized obviously you guys can’t control the copper price.

But given where prices are at today, if they were stay there for the year how much more could you borrow against your credit facilities? What is still let available to you?

I’ll ask Aurora to answer that. But I mean at today’s prices we don’t expect to extend that much.

But I’ll let Aurora provide you the details.

Yes. Our Minera Valle facility, which is being used in 2016, is a price support facility from El Teniente.

We had an availability of $10 million at the start of the year and we are using or we are accessing $1 million a month from that facility given the current copper prices. Other than that we still have $4.8 million remaining from the Tranche A facility with BBVA and EDC, we expect to draw the final disbursement of that facility in the upcoming days, most of that is vest into cover the remaining payables on the cost incurred in Cauquenes from last year, but there's a portion that would flow into operating cash flow, as the disbursement exceeds the payables outstanding and we don't expect to draw from any further facilities other than that described.

And then on the debt or well what have got you. I believe you said 14 million in the prepared remarks for the debt service for this year but looking at the balance sheet there was about 79 I think in short term debt?

What's the discrepancy there?

That is a good question, when I'm talking about the 14 million I'm talking about the debt service and the capital repayment of Tranche A which is basically the $64.4 million loan. We also have a Tranche B facility which is a value added tax line of credit of about $9 million that basically has to be repaid from working capital items, we have a substantial VAT tax refund in our balance sheet we have received a portion of that as we speak which has been destined to pay that portion of the Tranche B loan and the rest of the Tranche B loan is basically generated from the balancing of the VAT collected from sales and VAT paid on purchases so it's not that we have to generate that cash it's a working capital adjustment that flows into the repayment of that facility.

Okay. That is complicated but I kind of get the point that there is about a -- there's a little bit of a gap there in actual repayment.

Okay. And then thinking kind of big picture what is the -- that's probably a good question for Rob, the delay in payments for March to June on the royalty, how should we look at that from an accounting standpoint is that going to mean better profitability in March are you guys going to account for with the assumed royalty?

And then big picture how much money do you think you can save there and is this where negotiation goes on what's the indication you're getting from Codelco as far as willingness to be flexible about that what their royalties are?

I think we've been in discussion with El Teniente since Cauquenes started in September last year, so it's a long discussion, we've had conversations very high up in Codelco and they are supportive they do understand our opposition and we expect these negotiations are going to be complete in June. What the net result is?

It's going to be favourable, and exactly how favourable we're not sure yet, but they have agreed that the existing rates is higher than it should be, but it's too early to say where it's going to end up. As for the accounting treatment of it maybe Aurora can address that but.

Yes, I think that the core answer has been provided by Rob, how to deal with it on an accounting -- from an accounting point of view, the royalties are being -- are basically since 2015 they're being deducted from the tolling revenue that we generate by selling the copper -- or providing the tolling service to El Teniente. We would continue to account for it.

It's basically just a deferral so as long it's a deferral it would be shown as an increase in current liability.

Okay. And then just kind of looking out at the year I know you guys gave kind of full year guidance, but is there kind of like a ratio, you guys have said it is first half, second half for that production guidance, is it 60-40, 55-45, something like that?

No I don’t think it’s that going forward, I think we’re seeing a steady ramp up as we get deeper into Cauquenes, the grade improves and the recovery improves. So we are seeing a gradual almost of the near increase certainly over the first half of the year.

We expect to hit full strides round about August and it will then start to platter out after August so if you’re going to be trying to do a quarterly model or a monthly model I will break up the guidance into two halves gradually increasing in the first half and then as I said keeping steady in the second.

What price would it take for you to re-crank up your Molybdenum production?

Yes, that’s an interesting question. Certainly, we haven’t budgeted to produce any moly this year given the price of 5 bucks.

But with Cauquenes, we are seeing higher moly grades as we hoped for. So we are looking at ways and means of getting the plant started again potentially as low as maybe $7 a pound, 6-7 we might have enough financial incentive to start-up that plant again.

But right now our forecast is not to produce moly this year.

Okay. And what is your estimated breakeven cost for moly is about 650 or where would you breakeven?

Yes that is because we are in the new deposit. Certainly in the old deposit for Colihues, the breakeven was near 7 or 8 and we shutdown when it dropped below 8.

Now that we have higher moly grades in Cauquenes, we think that breakeven is closer to 5 or 6.

Okay. Now if you don’t capture the moly, it goes back in the tailings probably.

So there is not sort of like a reservoir sitting on the side, right?

Yes what happens is that we produce a bulk copper concentrate and the moly is contained in that concentrate. So we sell that concentrate to El Teniente include in moly, so it goes off in the copper con.

If and when moly price is high enough to justify it we then separate the moly con, out of the copper con to produce two separate concentrates. So at the moment what I need to say we do take it out into the concentrate but if it’s not a high enough quantity in the concentrate, it doesn’t pay for the treatment to get it out of the con into a separate con.

Now I assume you’re not hedging copper. What’s your strategy and when might you hedge copper or is that not likely?

Certainly not at current prices, I think we’re opportunistic. Where -- we’d have to get into discussion with BBVA on -- if and when any opportunity arose certainly if copper prices did increase substantially.

We would certainly be considering a hedge position. But at today’s price I don’t think it makes sense.

Okay. And you gave us your cash breakeven.

What’s your fully breakeven for copper for 2016 estimated at?

We didn’t get your question. Could you ask it again?

Sure, sorry. You gave us what I thought was a cash cost estimate for copper for 2016.

What would be a fully loaded cost be?

Well again that depends on the copper price, because of the royalty component. If we were talking about the current copper price of 210, we would be looking at cash costs plus CapEx at servicing the royalty of about $2.37.

But you have also to consider under those conditions we have the DET support, which represents about $0.18 per pound.

So that sort of implies 250 prior 260?

No.

No, no.

247 minus 218, so that’s…

Okay.

2 yes, 220.

219, okay, okay so 2.20 you'd be more or less breakeven on a full loaded basis?

Yes.

Correct.

And can you kind of share power cost, how much you're paying per kilo hour?

We're paying on the range of $0.10 per...

Yes, $0.10 per kilowatt hour and we're taking it over a long term contract, so that's not going to change.

Okay. And you're put in your own diesel, so is that your diesel that's producing that or are you buying that power?

Yes, we can produce up to 20 megawatts when the good price is high right now actually it's had a lot of rain, so the good price is lower than $0.10 per megawatt hour. And the cost of generating our own power is in the order of $0.12 to $0.13 so right now the generators are not running, because it's cheaper for us just to get power from the grid.

Okay, great...

If the rain comes the good price goes above the cost of generation, then we will generate our own power, but right now we're not doing that.

Thank you, Mary, and thank you to the participants of the call. We have nothing else to report and we look forward to discussing our quarterly results at the end of Q1.