Thank you. Welcome to the first quarter 2019 investor conference call of Amerigo Resources.

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

Forward-looking information will include, among other things, forecasts and projections about our copper production for the year, which involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from such forecasts and projections. Therefore, although we believe that 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.

We direct you to our press release issued on May 8, our other documents filed with the securities authorities in Canada, including our annual information form under the heading Description of the Business Risk Factors. These documents describes the material factors and assumptions that were applied in drawing the conclusions and making the forecast and projections as reflected in the forward-looking information and the material factors that could cause actual results, performance or achievements to differ materially.

Except as required by law, we undertake no obligation to update or revise any forward-looking information made in this presentation. Rob Henderson, the company's President and Chief Executive Officer, will now provide an operational and corporate update.

Thank you Aurora and thank you everyone for joining the call. First quarter of 2019 has seen a very slow start to the year due to low production and low copper price.

The ramp-up in copper production at MVC was weaker than expected due to low copper recovery in the plant. The historic tailings material extracted from Cauquenes was from a known poor-quality zone as dictated by the mining plan sequence.

However, in addition to the lower grades, the material had a higher than expected fines content and significant iron and clay contamination, which negatively affected recoveries and the quality of the final copper and molybdenum concentrates. The time to process at MVC was also lower than planned in the quarter as they suspended operations for an unexpected seven-day shutdown in March when the El Teniente's tailing canal was down for maintenance purposes.

The ramp up and the optimization of MVC's new flotation plant was affected by the shutdown and the high fines contaminations and required frequent adjustments to plant operating conditions. The copper price performances this year has also been weak and copper price today at $2.75 per pound is a new low for the year.

MVC's copper price for the quarter was $2.92 per pound, which is $0.17 down from the $3.09 received in Q1 2018. The copper market fundamentals remained strong with global copper demand growing and mined copper supply dropping.

Our consultants, Wood Mackenzie, still forecast that copper price will increase to $3.54 in Q3 this year. However, the current volatile trade discussions between U.S.

and China are expected to continue having a negative effect on copper price. In Q1 2019, MVC produced 13 million pounds of copper at a cash cost of $2.03 per pound.

The group generated cash of $5.2 million in operations and the cash balance at the end of the quarter was $17 million. The first quarter production included 8.4 million pounds from Cauquenes and 4.6 million pounds from fresh tailings.

Copper recovery from Cauquenes was only 33% in Q1 compared to 45% in Q4 last year and this was due to the fines that were in the plant feed material. The zone of poor-quality fine material in Cauquenes appears to be constrained to a thin layer, about 10 meters deep located 25 meters down in the central area of the deposit.

The material below this zone is good and to the periphery of the deposit is good and it contains much higher quantities of coarse material with better recoveries. So to the extent possible, the mining sequence currently in Q2 has been adjusted away from the zone of poor-quality fines.

However, the degrees of freedom from the mine plan are limited and the material currently being extracted is also low quality as it's near surface with high oxide content. As expected, the plant will continue to be affected by low quality material until a new deep level sump is operational in July.

This planned new extraction sump will access material from the bottom of the deposits which will enable much more operational flexibility and get a blending which will result in higher plant recovery. So we expect production in the second half of the year will also be augmented by the new concentrate regrind mill, which has been delivered to MVC and is currently being erected and is expected to be put into operation this quarter.

But as a result, due to the poor first half of this year, MVC has revised its 2019 annual production guidance down to 70 million to 75 million pounds of copper and two million pounds of molybdenum at a cash cost of $1.55 to $1.60. Operating cash flow of $5.2 million in Q1 is expected to be maintained in Q2 and it should increase in the second half of the year.

I will now hand over to Aurora to discuss the financials.

Thank you Rob. As Rob has mentioned, Q1 2019 was a challenging operational quarter, ultimately resulting in Amerigo posting a net loss of $1.4 million or $0.01 per share after six consecutive quarters of operating profitability with aggregate net income of more than $21 million.

Revenue was $27.7 million from gross copper sales of $36.4 million, positive settlement adjustments of $2.1 million, molybdenum revenue of $2.2 million, less the smelt and refinery charges of $4.5 million, copper royalties to El Teniente of $8.1 million and transportation charges of $0.5 million. Total production costs were $25.8 million, lower than in recent quarters due to lower consumption of consumables, but with a higher than expected unit cash cost of $2.03 per pound due to lower production levels.

Other expenses were $1.7 million. Finance expense was $1.8 million and the company had a small tax recovery associated with deferred taxes.

Despite the lower production and weak copper price, the company continued to generate positive operating cash flow in the quarter, in this case, a $5.2 million and reduced its working capital deficiency by $2 million in Q1. The company's balance sheet at quarter-end showed a cash position of $16.6 million and current assets of over $42 million.

Despite the company's revised guidance in response to actual Q1 and projected Q2 production results, we do not currently anticipate running into liquidity problems under current copper prices. And even as we speak, we already have the cash at hand to make the next debt repayment scheduled for June 30, which will be just over $13 million.

We believe we are seeing the lower end of copper prices expected for the year due to the ongoing pressure of yet unresolved trade tension. But the potential remains in place for a stronger price in the second half of the year in line with our projected resumption of higher production levels at MVC.

In the meantime, the financial focus has continued to be to manage cost and the company's treasury to ensure full continuity of operations and a positive relationship with the company's lenders. Rob and I will now be taking questions from call participants.

Good morning guys. Thanks for taking the question.

Let us get some volume because we can barely hear you.

Hi Joe.

Is that any better?

Yes. That was better.

Okay. So yes, so thanks for taking the questions.

Just couple of things. I guess, how confident are you guys that production will still increase in the second half of the year on the side of things related to the issues in Q1 and part of Q2 with mine sequencing?

Like, is this 100% confidence in that? Or is there still some room depending on how things go that there could be fluctuations in production into Q3 or Q4?

See, it's all about getting the new sump into operation. So we are busy digging to the bottom of the deposit right now.

We are about three meters off from the bottom and the sumps are going to go in this quarter. So we are in the material right now that we are going to be mining in Q3.

So we have been able to do tests on it. We have confirmed that the grade is good.

We have confirmed that the amount of coarse material is good and we confirmed that the recovery is good. So the probability, we have got the actual stuff that we are going to be mining.

So we have got pretty high confidence levels that the quality of the material that we are going to be mining in Q3 and Q4 is substantially better than it is right now. So we have been able to do actual tests on the actual material.

So, pretty high level of confidence.

Okay. And then on the debt repayment side, what are your maturities for the rest of the year and the timing of them?

We have two payments in June 30 and at the end of the year, December 30. They are of $13 million each.

Okay. All right.

I will turn it over. Thanks guys.

Thank you Joe.

Good morning guys. Just I have three questions.

Let me just table them all up front. First for Aurora, if you could just explain what the increase of $4,882,000 was in other assets in the quarter?

Second question relates to Codelco, for Rob. I think this maintenance in the tailings pond, what I have heard is that that had a lot to do with the problems in Brazil with the disaster there and everybody is now being required to check their tailing ponds all over South America, which certainly makes sense.

I am not saying it's a bad thing. But I am just wondering what other issues, I don't know whether the new labor contract's in place yet at Codelco, in El Teniente mine and I am not sure what other issues environmental or otherwise you are dealing with.

I think the environmental issues relate more to the smelting and the CO2 production and so on. But if you could just give us some comment about how you see El Teniente progressing, because obviously the first tailings are still a very important part of what you are doing?

And then the final question relates to the outlook for copper prices. With all due respect to Wood Mackenzie, you could talk to Ross Beaty and I know Robert Friedland, the other day, was saying that you are going to need a telescope to see copper prices in 2021.

So those are my three questions.

Okay. Terry, let me answer the middle one first, because that's the easy one.

The El Teniente, they do regular maintenance on the tailings canal. So they have got an 80 kilometer long concrete channel, which takes tailings from main mill down to the Caren tailings deposit.

And obviously, this canal needs regular maintenance. And typically, we are down a couple of days a year when they patch things up and fix things up.

This year, they had to do a seven-day maintenance in a portion where the canal goes through a tunnel in a mountain. So that was trickier to get to.

So it really doesn't have anything to do with the Brazilian dams. It's just regular maintenance on the concrete channel which took seven days instead of the regular one to two.

The labor contract, El Teniente have signed the labor contract. So they are good for another two-and-a-half years.

So we are really not expecting any surprises from El Teniente. They are performing very well right now.

The last question on copper price. I mean I guess we have a lot of two-handed economists around.

On one hand, it's going to be high. On the other hand, it's going to be low.

Wood Mackenzie have advised our banks for the last four years. Their predictions so far have actually been bang on.

But having said that, we are in a volatile phase right now with the trade discussions with China. So even though the fundamentals are still strong with demand growing, mine supply is dropping off.

The big companies just have not invested into new mines. So it's inevitable that production is going to stop dropping off.

So even though fundamentals are strong, you are seeing a lot of smoke coming from the trade talks and that is affecting the copper price. That's affecting the sentiment on copper.

So we are getting away from fundamentals here. So it is really anyone's guess as to what copper is going to do.

However fundamentals are strong and that's my message. Aurora can comment on the capital.

Yes. You were asking about the increase in other current assets.

We really didn't have any. So what line are you looking at?

I am looking at the consolidated statement. Financial position, December 31, it shows other assets at $27,546 and at the end of the March $32,428.

Let me just see. You are looking at the news release there.

I was looking at the actual balance sheet.

Yes. I just have the summary numbers.

You have the real numbers.

Okay. Yes.

The increase that we are seeing there is in inventories. We have had a quarter that has been challenging in terms of the inventory for a number of reasons.

One of them is at a higher cost of production, unit cost of production. Our inventory is valued at a higher cost in the balance sheet than at December 31.

We also had some issues in terms of deliverables of copper at quarter-end, similar to what we had at December 31. We didn't experience those same challenges intra-quarter, but it was just at quarter-end that the logistics of moving some of the copper concentrates and moly concentrates were a bit challenging.

And we are working to resolve those issues, particularly at quarter-end. And also with the lower production levels, our inventories of consumables at the plant, be it grinding balls, reagents, et cetera, have gone up a little bit.

And we are carrying higher than normal inventory levels. So those three factors combined, resulted in an increase in inventories of close to $5 million, which would explain the increase in other assets that you are looking at in the news release.

Okay. I am sorry, as a CFA, I just looked at this quickly and seeing other assets below plant equipment, I was thinking it was something like some kind of a goodwill that it was something on the long term asset side as opposed to being current asset.

So it might make sense to move that item up above plant equipment. But in any event, that's a good answer.

And I would just make two other comments. I also saw an interview with Lukas Lundin the other day that he's pretty bullish about copper too.

He said other than Cobre Panama, there's not really anything new of significance coming on. And as you point out, the existing mines have been around for a long time, not only is production going down, but grades are deteriorating and so on.

And the other comment I have is, I was in Chile for the first time early in March and was very impressed with the economy, the state of the infrastructure and how things work there, having just come from Argentina. Although it was better than I thought it would be too.

And I think it's a great country to be working in. I thought that before, but it's just nice to have confirmation.

Yes. We are seeing very positive support from the government.

We are seeing very positive support from the banks there. So it is a very good mining jurisdiction.

Hi. Good morning everybody.

Good morning Stephen.

I want to sort of follow up a bit on the Cauquenes problem. Do you have a percentage estimate, the 80-20 or 90-10 for good to bad stuff?

Short answer is no, Stephen. I did put a slide into our latest corporate presentation that's on our website.

It's in the appendix. And it gives you a pictorial of where we are mining right now and how it's been impacted by this fines zone and by this oxide zone and how when we get the new sump in operation, we are in a significantly better position with much more mining flexibility.

And I mentioned to Joe that, in this excavation of the sump, we are actually in the material that we are going to be mining. So we can test is.

We can feel it. We can pick it.

We can put it through our lab. So we have got a very good high level of confidence that this stuff is good.

So have a look at the pictorial in our presentation and hopefully that answers a lot of your questions.

Okay. I think that obviously that's going to help.

How far away is the new sump from the existing one?

It's 10 to 11 meters deeper and in horizontal distance, it's probably about 50 meters away. So it's very close to the existing one.

Okay.

And that's the key. It's getting access to the bottom of the deposit.

Okay. Good.

Iron contamination. I mean, you get rid of iron with magnetism, magnets.

Do you have to actually get that iron out of the concentrate? Or does the conc go along with it in?

Normally, the pyrite gets depressed in the flotation circuit. So when you are collecting the copper particles on the bubbles, you have it running at a pH where the iron doesn't collect on the bubbles and that's how MVC has been running for the last 27 years.

For some reason, the iron in this zone here gets very excited and it jumps onto the bubbles and it's very hard to knock off. So we have had iron that's been activated to levels that hasn't previous been activated.

So we are still figuring out different reagents in the plant, ways to get this iron back down again. But yes, it is coming into the copper concentrate and it does effect the concentrate quality.

So we don't want it there.

Okay. The sustaining CapEx this year is $5.8 million.

Does that include the cost of the new sump?

Yes. It does.

So that's typically what the sustaining CapEx, the bulk of it is in new sumps. The balance is fixing up the plants, getting new unit [indiscernible], et cetera.

But the sumps are part of that sustaining capital.

Okay. Well, that's good.

That's enough for me. Let's hear somebody else.

Thank you Stephen.

Thank you. Rob, how are you?

This is a quick question for you. Prior to the recent quarter, leaving aside the current challenges, the longer term cash cost that we were using was somewhere between $1.30 and $1.45 a pound, right, exclusive of the royalties and netting of the current issues?

Right.

Somewhere in that range, right? And my question is, I was looking at the report, the 43-101 that was authored, I believe, by yourself back in March.

And it had, obviously, a reference to the initial 10-year period from 2019 through 2028 an estimated 85 million pounds per year of copper, which is in keeping with the historic projections and then a cash cost of $1.57. And I wondered why is that 10-year average higher than what has been discussed over the last year exclusive of, again, current difficulties?

Is that because as we get toward the tail ends, no pun intended, of the 10-year period, the costs are higher and this is simply the average?

No. That's not a big driver.

There are several factors affecting it. So that cost in the new technical report was about $0.06 per pound higher than the previous technical report.

We use a different moly price in the technical report compared to our term projections. So the byproduct accrete is so much lower in the technical report.

So that's one reason why the technical report costs are higher than our current projections is moly price. The second one is that it is actually some extra expenditures we foresee starting in 2022, we need to spend.

And it's still to be confirmed the exact amount, but about $6 million a year in containing fresh material in Cauquenes. The previous technical report had assumed that we would leave unmined material in Cauquenes as a berm wall to contain fresh material.

We have to recirculate fresh material into Cauquenes because we don't have room in the tailings canal.

Right.

The original concept was just to put that in a void and use unmined tailings from Cauquenes as the berm wall. The new concept is actually to construct a berm wall using cycloned and fresh tailings.

So that way we recover a lot more of the Cauquenes material to our plant. However construction of the walls from cycloned material is going to incur some pumping and cycloning costs.

So we have the net effect that the reserve of Cauquenes went up because now we recover that unmined material. However the costs from 2022 to 2029 do go up slightly, about $0.06 a pound, because we have to construct a tailing wall within Cauquenes to contain the fresh tails.

All right.

I hope that explains it.

So would that mean though for the next several years, I mean, is the current or is the previous cash cost estimate or range of $1.30 to $1.45 no longer viable?

No. I believe it is.

That's our current guidance. In 2022, it probably will go up by, I am guessing, $0.05 or $0.06.

Because in 2022, that's when we need to start incurring operating costs for cycloning.

Okay. So then the range might be somewhere, sort of $1.30 to $1.45, somewhere longer term $1.36 or $1.37 up to $1.50, $1.51?

That's correct.

So this tech report, which pushes closer to $1.60, I guess, is this just being more conservative. I mean, every penny is significant.

It uses a different moly price.

Right.

It uses a moly price of $7 or $8 a pound, whereas, we are currently using --

About $$12.

$10 or $11 and the current price is $12.

Okay. So to the degree the moly price stays strong, this cost and the tech report is --

It's very conservative.

Okay. It might be a bit high and actually, it could and who knows five years from now, but --

Yes. Who knows?

But it could --

It could. Just making the crazy assumption of moly price to stay strong since no one knows, this number could actually come down a bit?

That is correct.

Okay. My other question related to the same report where I think the sustaining costs now, Aurora, what are they, about $5 million a year?

CapEx, we are working on an inflation-adjusted of $5 million, which is currently $5.8 million.

So let's say, $6 million to use a round number. And the sustaining capital cost in the report is $105 million from 2019 through 2028.

So that's $11.6 million, call it $12 million a year in sustaining costs versus the $6 million now and the difference would be what?

No. It shouldn't be the case.

Sometime.

Yes, sometime. We are working consistently in the technical report.

So I will double check this number for you. But it shouldn't be the case.

There shouldn't be any differences.

Okay. So this $105 million might be a bit high?

Because I simply took the capital cost projection of $105 million through 2028, divided by nine years, came out with $11.67 million, which seems a bit on the high side.

Yes. But it sounds like double.

We will check into that.

Great. That was it.

Thank you. Excellent job, considering the challenges.

I appreciate the effort.

Thank you John.

Hi there, Rob and Aurora. I have got a question about the sump installation.

Is that just a routine thing where you all change the sump? I mean, how often do you do that?

Andrew, yes, the sump is a routine thing. We have a mining bench depth of about 10 meters.

So we start off with a 10 meter hole on the ground. We get all the material out that we can.

And then we make that hole another 10 meters deeper. Get all that material out.

And then we make that hole a further 10 meters deeper. And that's where we are right now.

After 3 years, we are at depths of around about 37 meters deep into the deposit. So the next part of the extraction sequence is to push it down another 10 meters, where we will be at 48 meters, which is pretty close to the bottom of the deposit.

So it is a routine part of the extraction sequence is that we put these sumps in deeper and deeper each year in order to recover the material. So now that we are at the bottom of the deposit, we probably won't put a new sump in for another 18 to 24 months until we run out of material to be mined.

And then we will advance the sump away from the dam wall to recover material that's further away from the wall. So there is a planned extraction sequence to put these sumps down.

Right. So in other words, there shouldn't be any surprises as far as getting this operational by the beginning of Q3?

No. We have done it, like, four times already.

So the guys are pretty efficient in knowing how to put in the infrastructure.

Right. Well, that sounds like as you have tested the material and the sump is not a challenge.

That's just a routine thing. Then it stands to reason that Q3, that your projections for Q3 are pretty strong that you won't have any surprises there.

Correct?

That's our belief.

Okay. Great.

One other comment and I think we have talked about this in a couple of e-mails. But with the situation with having debt, why not hedge half of the copper or something?

I mean, we all believe that copper eventually goes higher or we wouldn't be invested in this. But at the same time with the debt hanging over you and the possibility that copper could go lower, it seems like it might be prudent to hedge just forward for a couple of quarters or for some amount of time to hedge part of it just to make sure that you are being conservative on the debt repayment.

Any thoughts on that or comments?

Yes. We have a pretty conservative approach with hedging.

One of the reasons being that we have a commitment to pay royalties to El Teniente based on current copper prices. So that kind of grounds us to the current market price and it makes it difficult for us to hedge at a price that even if it could protect our debt repayment, could potentially also put us in trouble with making our royalty payments to El Teniente.

At this point in time, we believe that an alternative for us would be, if the copper price were to go down, would be to consider a discussion with our lenders. That probably would be a more prudent approach to take rather than to hedge and leave us exposed at a moment in time where we think that the trend would be for higher copper price with the commitment to pay royalties based on market copper prices.

Have you ever approached them about being flexible on that point of paying market as opposed to a hedged price? Have you had any talks with El Teniente about that?

Yes. And those talks are, basically the view is that the royalties are set up on the current market price.

I think we have more probabilities of success as having other discussions with other parties and just continue our agreement with El Teniente on the basis that it is.

Right. Okay.

Well, my concern and I am sure everybody's concern is flexibility you have on debt repayments. And in case, we do get bad news on the copper price and we are stuck in a lower copper thing that we are not, we don't put ourselves in a position where we have a problem, or again the debt could be restructured somehow or you could use a line of credit.

So maybe flesh that out a little bit. Worst case scenario, copper goes down and we are looking at still having the debt repayments.

What's the plan of action if that were to happen?

I hear what you are saying and it's a subject that's very pressing with us. I think we have very good relationships with our lenders.

We have a currently aggressive repayment term ahead of us of just three years. We are a good client of the bank and I think that if we were to entertain a situation where copper prices behave in a negative way from what we are seeing now we would have flexibility to either reach a temporary relief on debt repayment or refinance our debt on a more flexible schedule that would prevent any surprises, such as not being able to make a scheduled repayment.

We hear what you are saying and we think that we have the possibilities of working a solution if we were to face a scenario like that.

Okay. Great.

And then I am going to make a couple of other comments. One being that as far as I know everybody here also is probably very interested in the dividend being reinstated.

But I personally would rather see you pay down debt and get that done quicker and just to get the thing free and clear and then it becomes the cash flow machine that we are all hoping and the dividends that we are all hoping. So I know with things currently the way they are, the talk of dividend has got to be kicked out into the future.

But do you have any thoughts on that as far as paying down debt faster?

Andrew, no specific plans right now. Obviously, we are keeping an eye on the copper price.

We are keeping good relationships with the banks. If we have the opportunity to pay it down, we will certainly look at it.

And one of the provisions in paying a dividend is that if we do pay a dividend, half of the equivalent amount has to go down to paying down debt. So initiating a dividend and accelerating pay down of debt would go hand in hand when that event should happen.

But we do have three years to pay off the debt, which Aurora mentioned is pretty short time and we do intend to get it down as soon as we can.

Fantastic. All right.

Well, now we will have some news. I have been just back from two months in Chile and it is a great country to business in and a great country to be in.

So thank you for all your hard work and let's make this thing work.

Appreciate your comments. Thanks Andrew.

You bet.

Thank you very much. We appreciate all participants taking the time to be with us today at the call for the release and commentary on the Q1 results.

And we look forward to speaking with you again in approximately three months' time to discuss Q2 results. That would be all and we will be in contact with you soon.