Aurora Davidson – Executive Vice President and Chief Financial Officer Rob Henderson – President and Chief Executive Officer

Joseph Reagor – Roth Capital Partners John Polcari – New York

Thank you. Welcome to the Third Quarter Investor Conference Call of Amerigo Resources.

I’m 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 forecast and projections. Therefore, although we believe that anticipated future results, performance or achievements expressed or implied for 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 November 8 and our documents filed with the securities authorities in Canada, including our annual information from under the heading Description of the Business Risk Factors. This document describes the material factors and assumptions that we’re applying 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 call. 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. I believe that the mining industry is starting to warm up at last.

The price of copper appears to have broken the 7-year downward trend, first, with a jump last year from $2.10 a pound to $2.60 that happened in Q4 last year, and then again this year with another jump from $2.60 to where we are today at about $3.10 per pound, and that occurred over Q3. So this increase of $1 per pound or 50% has a big positive impact on MVC’s profitability and Amerigo’s share price.

Our earnings of $8 million in Q3 2017, another record. However, they are close to levels last reported in 2007.

We had an excellent third quarter, and we remain well on our way to achieving the objectives that we set out at the beginning of this year, mainly, first, to deliver on guidance, which is a record quantity of 60 million to 65 million pounds of copper this year at an annual cash cost of $1.60 to $1.75 per pound. In Q3 2017, MVC was on target, producing 15.5 million pounds of copper at a cash cost of $1.69 per pound.

So if all goes to plan, we should finish the year well within guidance. Second is to commence construction of the second phase of the Cauquenes expansion project.

MVC is now 19% complete on this project, and we expect to be complete in Q3 next year. The expansion, adding this year’s planned increased production to 90 million pounds of copper and to drop cash costs to $1.40 per pound.

The third objective is to ensure MVC’s liquidity. In this quarter, the group generated $11 million in cash flow from operations, and the cash balance at the end of the quarter was $23 million.

Compared to one year ago, in Q3 2016, when cash from operations were only $2 million, this quarter had $11 million, 665% higher, which demonstrate Amerigo’s high leverage to the copper price. The group’s recorded copper price for the quarter was $3 a pound, and we remain unhedged to the copper price.

The price of copper has increased substantially over last year in response to continued strong demand from China and an expectation of mine supply shortfalls in the future. We believe that the global supply and demand fundamentals continue to support higher metal prices.

The Q3 2017 production of 15.5 million pounds of copper was on budget and included 9.8 million pounds from Cauquenes and 5.7 million pounds from the fresh tailings. The construction efforts on Cauquenes Phase II expansion are ramping up rapidly.

Project’s on time and on budget. The earthworks contract is 75% complete now, and concrete work is scheduled to commence in December.

We’ve had an excellent third quarter headlined by our exceptional earnings, and I believe that we are now starting to reap the benefits of our investment into Cauquenes. MVC’s focus over the next six months is to safely sustain the level of copper production, control costs and complete the Phase II expansion project on time and on budget.

This month, MVC are celebrating their 25th year in operation, and we are looking forward to the next 25 years. I will now hand over to Aurora to discuss the financials.

Thank you, Rob. The third quarter of 2017, as Rob has mentioned, was a very clear example of the company’s leverage to copper prices.

The average LME copper price in the quarter was $2.88 per pound, and that’s a substantial increase from $2.57 which we had in the second quarter. The increase in price benefit the company twofold due to our current pricing terms, which are M+3.

This effectively means that copper sales this month will be provisionally priced at today’s copper price until the final sales price is known three months later. Given this condition, we had $4.5 million in positive price settlement adjustments for April, May and June sales when their final prices were known in July, August and September.

These final prices were $2.71, $2.94 and $2.91 per pound, respectively. At September 30, our Q3 sales were provisionally priced at an average of $3 a pound.

Any changes above or below this price mark will result in positive or negative settlement adjustments to revenue in the fourth quarter. This conditions result in the company posting gross copper revenue of $50 million in the quarter.

After deductions for smelting and refinery, copper royalties to the El Teniente and transportation, net copper revenue was $35 million. We also had $2.5 million from molybdenum sales for a total net revenue of $37.4 million.

In Q3, the company had a cash cost of $1.69 per pound, almost the middle point of our cash cost guidance for the year of $1.60 to $1.75 per pound. The company’s tailing and production costs were $26 million, resulting in a gross profit of $12 million.

Other expenses, including G&A costs, were only $0.5 million, and finance expense was less than $1 million. Income before tax was $10.5 million, and net income after tax was $7.9 million or $0.04 per share.

Income taxes paid in Chile at a rate this year of 25.5%, which is increasing to 27% as of 2018. In respect to the sources and uses of cash in the quarter, the company generated $11 million in cash flow.

Adjusted for changes in working capital, which are essentially timing differences, net cash from operations was $5.7 million. The company received in the quarter close to $5 million on the Cauquenes Phase II loan and paid $5.3 million in CapEx, mostly associated with the Phase II expansion.

The company will continue to fund the Phase II expansion from the credit facility of up to $35.3 million that was put in place for that purpose. In the third quarter, debt repayments were $3 million on a loan outstanding with Codelco, which has been reduced from $17 million to $12 million.

We anticipate that we’ll continue to make repayments on this loan at a rate of at least $1 million per month, such that the loan is fully paid either in Q2 or Q3 of next year. This will leave the company only bank debt outstanding, which was taken to finance production expansion.

At September 30, bank debt was $53 million. The company’s bank debt is scheduled to be repaid by the end of 2021, but our loan agreement allows prepayments, which could occur once Phase II is completed.

At September 30, the company’s cash position was strong at just below $23 million. Amerigo is generating strong free cash flow, reducing debt and moving ahead with the Phase II expansion that will materially improve production and reduce cash cost.

As Rob had mentioned, the company’s unhedged and fully exposed to current strong copper prices and a positive short- and long-term outlook for copper producers. Rob and I will now take questions from call participants.

Good morning, Rob and Aurora. Thanks for taking my question.

I guess the first thing, obviously, congrats on a great third quarter, and it’s nice to see the copper price improving. Nobody really knows for sure what the copper price is going to do in the future, but if we stayed here, how soon do you guys think – once the second expansion is complete, how soon do you think you could get debt-free?

Joe, thanks for your question. At a copper price of $3, we’re generating pretty good revenue, and we will expect to finish the expansion in Q3 next year.

And at that stage, we will start looking at how fast we can get rid of that debt, and maybe Aurora can give a bit more color on what we’re allowed to do and what we’re not allowed to do. But yes, we are allowed to accelerate the debt, but it does depend on the copper price, of course.

Yes. And Joe, there are a number of conditions.

The first condition, I’m sure you already know that because you mentioned that in your question itself, is the Phase II has to be completed. Once that Phase II is completed or by the time the Phase II is completed, we anticipate we will have paid off the El Teniente loan, and we will only have bank debt.

Our bank agreement allows us to accelerate our debt repayment without penalties, and the company will be looking at that option once we reach that first target of completing the Phase II. We are required to a cash sweep of basically 50% of whatever cash is available for distribution out of MVC.

So that is the first rate of repayment that we would be looking at. And the company would then consider a combination of accelerated debt repayment or possible reinstatement of the dividend.

So those are basically the possibilities in front of us once the Phase II is completed.

You answered my next question about the dividend, so that’s good to hear as well. I guess one other maybe big picture question for Rob.

Given that next year you’re going to finish this expansion, as to the current guide, what are you looking at as other opportunities for this company? I mean, at that point, you’re going to be looking at a company potentially with a really strong balance sheet, with declining debt, strong cash flow.

Are you going to look to potentially acquire other similar operations out there? I know there’s a lot of like tailings reprocessing companies in the gold and silver space.

Or would you guys like to do the opposite and look to merge yourself into one of them and get shareholders a nice premium?

Yes, I think the base case is to continue as we have been doing in the past 10 years and repay our shareholders with dividends. But having said that, we do have expertise in tailings processing, and every mine in the world has tailings.

So I’m confident there is a tailings facility out there that could benefit from our expertise, and we are actively working with other mining companies to see if we can profitably develop other tailings deposits. But to date, we haven’t found one yet, but I continue to search for opportunities where we can leverage our experience in what we’ve been doing at Cauquenes and Colihues for the last 10 years.

We continue to look for other opportunities.

And any comment on the potential of doing the opposite and selling the company to a different tailings processor that might be bigger than you guys?

Yes, I mean, there aren’t any really. But having said that, there are other companies that are very interested in our copper production.

So we do have discussions with other mining companies that make sense whether a combination would be a win-win scenario to all involved. To date, we haven’t found that scenario, but we certainly are open to discussions.

Okay, fair enough. And one final item, the magnitude of the Q3 revenue adjustment was pretty substantial.

Barring another significant move one way or the other in the copper price, it shouldn’t be overly material next quarter or any quarter beyond that. Will you guys continue to disclose that number?

Or was that just a matter of this was such a big number in the scheme of things that you guys felt it needed to be broken out?

We’ve always disclosed it in other quarters, it hasn’t been material. It was material in Q4 of last year when we had the first big increase in copper prices from what we have been seeing in the last years.

So we highlight it as we think it’s material for understanding the financial statements, but it’s not any hidden number, it’s always been disclosed in our MD&A.

Yes. And I think, as Aurora said, there typically have been swings of plus or minus 1 million or so, and it was plus 4.5 million, it’s much bigger than usual due to the spectacular jump in the copper price.

And we don’t expect – it will be nice if it happens again, but we’re not expecting that to happen again.

Okay. Fair enough.

I will turn it over. Thank you.

Yes, hello there. Good morning to you all.

Just want to clarify, if I can, just on dividends. Would the dividends, you’re planning on starting them up when all debt has been paid off?

Or could you start paying dividends before all the debt is paid off?

We don’t need to pay off all the debt in order to start paying dividends. So I think that’s a question for the board to decide on, but I think a combination of debt repayment and dividends is a likely scenario to occur.

And Steven, what Aurora had mentioned earlier, we have a cash sweep provision that the banks can take accelerated debt payments once Phase II is complete, but we have got the ability to dividend out the other half of that cash sweep. So we do have the ability to pay dividends should copper price stay where it is once we’ve completed the Phase II expansion.

So that’s a decision, as Aurora said, that our board’s going to have to make in Q4 next year.

Okay. Well, I think copper prices are going to stay up, so I look forward to the result of that meeting.

The one thing that’s a little negative, I saw it in the news releases, the comment about there were some lower recovery coming through because you were processing some high oxide tailings. How – is that over?

Are you through these high oxide tailings?

It’s a function of the mine plan. Basically, we have to take out every bit of material that’s in the Cauquenes impoundment.

We don’t have the ability to leave behind lower grade or less interesting material like a conventional mine, we take everything. And where we were mining in the last quarter and at the end of Q2 was pretty near the surface, near the very center of the deposit.

And at the higher elevations in the tailings, it’s more prone to oxidation by air and water. So we were stuck in this higher elevation zone.

We’re now shifted back down to the deep zones, 40 meters down or 30 meters down, and we’re busy excavating some, so they’re going to take us down to 40 meters down. So I think we’re through that kind of weak phase as it were, but it really is just a sequence on the mine plan that is really we can’t do much about.

So I think we’re through that, and we should be getting back to reserve grade pretty shortly.

So the oxidation then is just natural oxidation since the tailings are being deposited?

Absolutely. There was a tailing – there was a bit of a water storage area in the middle of Cauquenes, and we were mining right next to this water storage area.

And so it’s more altered material that we’ve been taking out in Q3. When we go deeper, we have better preserved material that hasn’t been oxidized.

Just one other comment for you. I talked to my broker this morning and looking at his quote screen, there was no indication that a news release had come out yesterday.

Interesting.

So I thought I’d pass that off to you. So maybe this news is still not widely disseminated yet.

That’s unusual. We’ll take a look at that, and we appreciate you pointing that to us, Steven.

Yes. I checked with him about like just 10 minutes before the call and still nothing is showing that Amerigo had any news release.

Okay, well, that’s it for me.

We’re going to follow up on that.

Another great job on the quarter, and I look forward to my dividends the company gets to pay. Thank you.

Thank you, Steven.

Good afternoon, Rob and Aurora. I had three quick questions.

One is on the fresh versus the historic tailings. My understanding is that the further down you go in your operation, the more historic tailings, obviously, because those are the ones that are more dated, and the fresher tailings would obviously be closer to the surface.

So with the passage of time, I imagine the deeper you go, the greater the percentage of your historic tailings, right?

John, the fresh tailings are the tailings that come directly from El Teniente’s mill. So that’s the stuff that hasn’t ever seen an impoundment.

It comes down to our facility. We process it, and then it goes on to the Carén tailings impoundment.

The historic tailings have been put down a long time ago, and that’s where we dig up with high-pressure water. So when we say fresh tailings, we mean the stuff that is directly out of El Teniente’s Mill.

The historic tailings are higher grade because they were put down way back, a couple of decades ago.

Right, when recoveries weren’t as high.

Correct. It’s not as good back in 1937.

Sure. So what determines the composition of fresh versus historic?

And are you required to take all the fresh tailings first before you can use capacity for historic tailings or...

No, no. We can take as much or little as we like.

We are limited by our environmental permit on a maximum amount we can take out of Cauquenes. But that max is kept at 80,000 tonne a day, and we also have to keep in mind the constraint of the tailings channel that takes both the historic and the fresh tailings to terrain.

And that tailings channel had a volumetric maximum, which we can’t exceed. So we are bound by certain envelopes.

But we can, to some extent, dictate how much we want to take. But right now, it makes sense to process all the fresh tailings through our mill and maximize Cauquenes as well, so...

So with the – first, I noticed in the last quarters, your historic tailings percentage is down versus the fresh tailings, which has been trending higher. And obviously, the recovery is much higher on the historic tailings.

So just can you talk a little bit about what determines – what drives that composition now? I mean what skews it more toward the fresh tailings over the last few quarters?

I think it’s just basically a function of the mine plan. The challenges have stayed pretty consistent.

And what we’ve seen from historic tailings is that the grade and recovery has been a little bit softer over the last two quarters whereas the grades in the recovery from fresh has been pretty good. So the actual tonnages we process have really not changed much at all, so we’re just seeing just slight swings in grade and recovery as a function of the mine plan.

So it’s not a definite strategic decision on our point to bias one or the other. It’s just been a function of the mine plan.

So when I look back over the last three quarters, the historic tailings going from 5.8 million to 1 million, 5.5 million to 5.1 million, that’s not a directed trend, that’s just a function of what?

Yes, as I was mentioning to Steven or Joe in the earlier questions that Cauquenes, we have been mining the nearest surface material over the last two quarters. And now we’re burdened to go back down deep, so we expect that trend to revert, and we should get more material from the historic tailings, and fresh tailings should stay pretty constant.

So in the aggregate, what – of the total deposits, what’s the tonnage or the percentage that is fresh versus historic? Is there an absolute number?

There’s no absolute number. As I mentioned, historic is constrained by our environmental permits at 80,000 tonne a day.

But we’ve been mining at about 62,000 tonne a day. First tailings coming from El Teniente has been in the order of 130,000 tonne a day.

Sometimes a little less, sometimes a little bit more. But those numbers are predicted to stay pretty constant over the next period of time.

Not to belabor the point here, but why wouldn’t you max out the historic tailings with their higher grade? Why wouldn’t you go to 80,000, the cap of the permit and then the balance being fresh tailings?

Why the lower amount?

The main obstacle right now is available tailings space because I mentioned the channel taking the tailings down to terrain has a volumetric max. So if we were to take an additional, say, 20,000 tonne a day out of Cauquenes, we would have to put 20,000 tonne a day of fresh material into Colihues in order to make space in that channel going to Carén.

And that space right now is a little bit limited, so we could take maybe 5,000 or 10,000 tonne a day, but we couldn’t do 20,000 tonne a day on a sustained basis.

So to the degree that Codelco ramps up their operation, would that be – skew you more toward fresh tailings?

It would be but don’t have any plans to do it yet. They talked about an expansion, but it’s been postponed for quite a few years.

So I think it would be at least 2025 before anything happens there. But by that time, we would have space in the void in Cauquenes and, therefore, we could handle putting more fresh material into the voids in Colihues and Cauquenes.

So in five years’ time, we could easily handle an increasing tonnage from fresh.

Two other quick questions. I noticed the cost had escalated slightly.

One of the obvious reasons is power cost. You have a new power agreement, right?

Was that effective when?

We’ve had a new power agreement for several years now, and we just made an amendment to it where the price is going to drop from $0.10 down to – in the order of $0.08. That’s taking place in January 2018, so we expect to benefit from lower power costs starting January 2018.

That’s what I was actually driving toward, I wasn’t sure when that kicked in. So we would assume that effective with the new year, some of the...

Yes, we’ll see some benefit from the power costs starting early next year.

Right. And then lastly, of the total generation, whether it was gross profit or net income or even cash, a substantial portion of it, more than half of it came from the positive settlement adjustments?

Correct.

For the quarter. Now those are numbers that move around from quarter-to-quarter.

But assuming the price of copper was somewhat stable here in the $3.10 level and there were no significant adjustments, would one back that out? Is that a one-time gain?

Or is it – could you assume that the level of – with all other costs being constant, could you assume...

Yes. If you want to normalize our income to exclude for that, for the settlement adjustment, you take out $4.5 million.

And the only other line that you would need to adjust would be income tax because you, therefore, would have a lower current tax payable.

So going forward, without any further settlements, the net income would be $3 million to $4 million, everything else being equal?

$3.5 million, $4 million before that.

All else being equal.

Right. And then with the potential for lower power cost and eventually...

Higher production.

Higher production.

And lower cash costs. I mean, the unit costs drop because we’re producing more copper at the same fixed price.

We do see cash costs going down to $1.40 from where we are today just as a by-product of higher production.

And that would apply to the – touches to the incremental production, but $1.40 to the total production, right?

That is correct, yes.

And what was the cash cost again for the most recent quarter?

We were $1.69 this quarter.

Okay. All right.

So everything else being equal, when all is said and done, on the entire base of production, that’s rather substantial, if not dramatic, decrease in cost?

Absolutely.

It is big.

Yes. And does that take into account the new power contract?

Or is that incremental?

It’s – we came up with that guidance of $1.40 before. We got news of the power contract.

So the power contract has the potential to drop it below $1.40. On the other hand, as the copper price increases, so does the strength of the Chilean peso.

So our domestic costs go up a little bit. So I expect that we see some positives from the power price into negatives from strengthening peso, which puts us back at $1.40.

So we shall see, but I think I’m still – I’m pretty confident that $1.40 is very achievable.

So it could be a positive, but on balance, it’s realistic to assume it could stay...

Yes, I think we’ll see some of the gains eroded by a strengthening peso.

Thank you. I appreciate your response.

Thank you. We appreciate the participants joining us for the discussion of third quarter, and we will have another call early next year to discuss the annual results of the company.

Thank you.