Michael Kuta - General Counsel Klaus Zeitler - CEO Rob Henderson - COO Aurora Davidson - CFO

John Tumazos - New Jersey John Bulgari - New York

Thank you operator. Good morning, ladies and gentlemen.

Welcome to the Q1 2015 investor conference call of Amerigo Resources Ltd. on Friday, May 08, 2015.

Before we begin our presentation, let me caution you that our comments and discussions will include forward-looking statements and information within the meaning of Applicable Securities Legislation. Although we believe that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based on reasonable assumptions and expectations, you should not place undue reliance on forward-looking statements and information because they involve unknown and known risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information.

You should review our press release issued May 06, 2015, 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. These documents describe the material factors and assumptions that were applied in drawing the conclusions and making the forecast and projections as reflected in the forward-looking statements and information and the material factors that could cause our actual results, performance or achievements to differ materially.

Except as required by law, we undertake no obligation to update or revise any forward-looking statements or information made in this presentation. Now, I would like to introduce our Chairman and CEO, Dr.

Klaus Zeitler.

Thank you Michael. As usual, I will just make a few general statements and I will then turn over to our COO, Rob Henderson and to our Chief Financial Officer, Aurora Davidson.

The first quarter of 2015 was at the same time one of the worst quarters operationally and one of the best looking forward from a strategic point of view for the Company. Operationally copper production was one of the lowest for the last six years, and at the end of the quarter we had to make the decision to closing down the moly production due to low moly prices and lower moly content and recovery in the feed material which turned moly production uneconomic.

Due to the operational problems, this also of course had its impact on the financial results. But nevertheless, we were able to come up with a positive cash flow of $1.2 million.

The good news of course is that if you have such a bad quarter, it can only get better and it will get better in the second quarter and from there on. One of the reasons why we were operationally so bad was that there was a fire at El Teniente, in one of El Teniente's crusher stations and that had an influence on the material which we received from El Teniente and the fresh tailings.

In order to make up for the losses which El Teniente had, they introduced into the tailings stream or into their operating stream and thus into the tailing stream some smelter slags which had a negative effect us, both from a recovery point of view and also from an operating cost point of view. At the same time, we are still in an area in the Colihues all tailings where grades are relatively low and both of these things will change in the second quarter.

At the end of April, El Teniente returned back to normal operations and in fact we are getting better than budget tonnage from them and it also has eliminated these smelters slags which as I said affected negatively our operations. So from the fresh tailings point of view we are already seeing an improvement in the second quarter and with respect to Colihues we will see an improvement there, because our new sump pump will be ready by the end of this month and this will then mean better grades and better recoveries.

As I mentioned strategically, the first quarter was as I would term it a game changer for the Company. We were able to secure financing for the expansion which we will have through the contract where we can get higher grade tailings from Cauquenes.

That contract was concluded as you know last year and in the first quarter we secured the financing for that expansion. In the mean time we have made terrific progress with the implementation of that expansion.

The project now is 50% -- is already 50% complete and we expect production from Cauquenes by the fourth quarter. So looking ahead this year we are very positive we will get better production, better result because of better cover prices in the second quarter and third quarter and we will then start production from Cauquenes with the higher grade tailings there, which will further increase production and give us better financial results.

So with this, I will hand over to Rob who will give you more details about operations and about the Cauquenes project.

Thank you Klaus. So although we are excited by the progress with the Cauquenes project construction, as Klaus mentioned we are disappointed by the operational performance of MVC in the first quarter of 2015.

The production of copper was low at 8.9 million pounds at some 13% lower than it was in Q1 last year. And plus at the end of the quarter as Klaus mentioned we made the strategic decision to suspend molybdenum production due to the prevailing low moly prices.

The fire at the El Teniente crushers in January resulted in low delivery of tailings tonnage to the MVC plant. El Teniente did complete their repairs in April and tonnage now to MVC has resumed to above budget levels.

And as Klaus mentioned the recovery in the first quarter was impacted by additional slag -- smelter slag, a very hard [indiscernible] material which is not recordable at MVC. So as a result, the first quarter mill recoveries for copper at MVC were very low.

We do anticipate a better second quarter as El Teniente has now started to catch up the lost tonnage, and as Klaus mentioned we will be bringing to operation the new deeper sump in Colihues which will increase our grades and the recoveries in the following quarters. Therefore we are still maintaining our annual guidance of 50 million to 55 million pounds of copper at a cash cost $1.80 to $2 per pound of copper.

For Q1 unit cash cost of 2.33 per pound was higher than expected, mainly as a result of the low copper production. MVC continue to work hard on improving their productivity to reduce their costs.

A key strategic milestone for Amerigo this quarter was the closing of the finance for the Cauquenes expansion. This project is expect to significantly increase MVC's annual copper production to 70 million pounds and further reduce cash costs.

We are pleased to report that construction of the phase 1 project is on budget and on schedule to commence production in Q4 this year. All of the long delivery equipment, the piping and materials is at site and the earth works to construction in the tailings impoundment commenced on April 8th.

I will now hand over to Aurora Davidson to discuss the Q1 financials.

Thank you Rob and thank you Klaus. Well in respect of the financial operational results for Q1, Rob has already touched on the subject and I don’t want to expand on it further.

There are however in my view only three points that I wish to highlight before we move on to discussing in a little bit more of details the financing facility secured by Amerigo for the Cauquenes expansion. The first point is that MVC has continued to implement timely and effective cost reduction initiatives as has been occurrence in the second half of 2013.

Our cost structure is not the same cost now as it was three years ago and as Klaus was saying before, it will be further enhanced once we reach the benefits of the higher production from Cauquenes. The second point is that despite low production and bad traditional copper prices, we posted positive operational cash flow of $1.2 million in the quarter.

That is very significant. And the third one is that all of the copper produced by MVC in Q1 was not at final copper prices.

In 2015 as you know we have quotational period of M+3. This brings to the table an upside potential in respect of positive final price adjustments for Q1 production as we already have seen occurring for the January production which was priced at the April average price of 2.73 which was better than the actual provisional price of $2.64.

Moving on to the topic of the financing, as you know, a finance agreement with BBVA and Export Development Canada or EBC was executed in March 2015 for what we know as a Tranche A facility of $64.4 million to finance the Cauquenes expansion. There is also a smaller facility, the Tranche B which is in Chilean pesos for the equivalent of approximately $9 million which is being used to finance the value added tax which in Chile is 19% of CapEx associated with the expansion.

The Tranche A facility will commence to be repaid in June 2016 for an additional five years with the final capital repayment occurring on December 20, '21. Tranche A however also has mandatory no penalty payment provision whereby on an annual basis every June starting in June 2016 MVC must make a payment for the equivalent of 50% of the funds that would be available to make restricted payments under the finance agreement.

This is a very important feature of the financing as in essence it creates a cash free provision that potentially could reduce significantly the term of the Tranche A facility without any cost for MVC to do so. 75% of the insurance due on the Tranche A has been fixed through an interest rate swap at a rate of 6.11% per annum during the construction phase which will go down to 5.86% per annum during operations.

The remaining 25% of the facility pays interest on a variable basis based on the LIBOR six months rate which is currently 4.15% in construction and would be 3.9% in operation. The Tranche B facility is a short term loan that will be repaid once MVC receives the VAT refunds that are due from the Chilean tax government which we expect to receive no later than Q1 2016.

The interest rate on this facility is currently 5.47%. As we have stated in our new releases, we are very positive with the terms of the finance secured for MVC and bank BBVA and EDC for their support in the project.

There is also an additional facility with El Teniente which is basically a price -- a copper price support facility whereby for any month in which the final copper price is below $2.80 a pound, DET will advance to MVC $1 million for contribution or as a long-term loan to be used in the expansion of the facilities. The facilities would be ET, are subordinated to the BBVA/EDC loans and we haven't drawn any funds as of March 31st when we issued our Q1 report, but now have received the first $1 million from DET given that the final copper price for January production which was the April price was below the $2.80 threshold.

Finally, Amerigo has also secured a $13 million fund by line of credit through three of its shareholders that may be drawn down at Amerigo's option if required to complete the project and to ensure that the project is completed within time. No funds have been drawn down from this facility and we really don’t expect that funds from this $13 million facility will be drawn.

That would be the end of my commentary on the finance summary. Klaus, Rob?

Well thank you Aurora. We can now entertain questions.

In Chile is the macro political environment affecting you at all? The president had proposed to rewrite the constitution and nationalize water after raising taxes and making environmental rules more stern, and the environmental minister had been attacking the Codelco smelter, not too far from where you operate.

Then I guess yesterday the president fired her cabinet. Are there any regulatory changes that have affected or that may affect you?

Not that we know of at this point. And I guess certainly from an environmental point of view we are in a very good position, because in a way we are cleaning up the environment by taking more metals out of the tailings.

So I think that, that can only be seen positive. Other than that, I don’t see anything that would affect us.

Now there are proposals with respect to changes of the labor law but this up to now is not really clear yet what the law will really look like. This could have eventually an effect on the way you deal with the unions.

But as I said, mean it's not a law yet and there are still discussions and so we have to wait what comes out of that. Industry organizations have been in touch with the government on that issue and so there are still a lot discussions going on.

Is there any firm schedule to convene a constitutional congress or convention or sit down rewrite the constitution or there is just so much rhetoric at this point?

Not that I am aware of.

Excuse my questions. It's very confusing sometimes to read what they talk about at the government in Chile.

Well isn’t that true for every government?

Oh yes.

Thank you. Aurora I think this question is just addressed to you and perhaps you could just walk me through on the financials in terms of, and I known this is a larger approach, I haven't looked at the details, but now you have positive cash flow of $1.2 million?

That is correct.

A million, I am sorry, $23.6 million with the initial bank funding draw down?

That is correct John.

So, and again I’m skipping a lot of details here but that would aggregate to $24.8 million in cash flow, CapEx …

No, no.

… now just.

No, no, no. We are -- you are working on the basis of zero cash position as of beginning of the quarter.

If you look at our statement of cash flows, we do show that we generated from our operational, basically a result of MVC $1.2 million …

Right.

Then there is a huge amount of noise in respect of changes in non-cash working capital. One of the most significant is $12.6 million of cash out holds to El Teniente.

If you recall El Teniente provided a bridge financing in essence to MVC to accelerate some of the CapEx that had long delivery times for the CapEx expansion.

That’s the exact number I was actually -- I had footed to 4.5, 12.6 is close enough. So that’s cash that went out to El Teniente?

For El Teniente, both on the repayment of deferred royalties and in respect of the normal payments to El Teniente for royalties. We pay them four months in arrears.

So the four months that -- we or the months that we paid during Q1 were for higher production, higher copper price, royalties that had accrued in Q4 which were basically paid in Q1. The opposite will be occurring in Q2 whereby you will be seeing a significantly smaller cash payment to El Teniente because the royalties to them have been lower in Q1.

Another benefit, now that we're talking about El Teniente that we're going to be seeing in Q2 is the fact that even though we are subject to positive copper settlement adjustment as final prices become realized, our royalties to El Teniente are paid at the average price for the month of production. So in this case it's working for the benefit of MVC.

That is, right. That was very helpful.

Just quickly, so the Company is now current on royalties through what period?

We’re current. We basically have the three months of royalties in arrears, which is a normal terms of the contract with El Teniente.

So we’re current through year end which would be the normal …

Absolutely.

… payment period and then in Q2 the payment for January, February and March is due?

That is correct.

Do you pay monthly in arrears or quarterly with a three-month lag?

We pay monthly with a three-month lag.

So you've already made the January payment and now February …

In April.

… March and April is -- April will be due May 30th -- I’m sorry February would be due May 30th. Is that about right?

It's paid on the first week of the month.

Okay, so this -- as we speak this some time in this early May, February's payment was due?

That is correct. I think that the conclusion to your question is there is no, there are no liabilities outside of the ordinary course of business in the statement of financial of MVC at March 31st, of Amerigo at March 31st.

Thank you operator and thank you everyone for attending our Q1 call. We look forward to speaking with you again in August when we report our Q2 results.

Thanks very much.