| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 68.20 | 1127 |
| Intrinsic value (DCF) | 2.14 | -62 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 15.00 | 170 |
Amerigo Resources Ltd. (TSX: ARG.TO) is a Canadian mining company specializing in copper and molybdenum production through its subsidiary, Minera Valle Central S.A. Operating in Chile, Amerigo extracts copper and molybdenum concentrates from tailings at Codelco's historic El Teniente mine, the world's largest underground copper mine. Headquartered in Vancouver, the company leverages a unique business model focused on reprocessing tailings, reducing environmental impact while maintaining cost efficiency. As a key player in the global copper market, Amerigo benefits from Chile's rich mineral resources and stable mining regulations. The company serves international markets, contributing to the growing demand for copper in renewable energy, electric vehicles, and infrastructure. With a market cap of approximately CAD 300 million, Amerigo is positioned as a mid-tier producer in the basic materials sector, offering investors exposure to copper's long-term growth potential.
Amerigo Resources presents a high-risk, high-reward investment opportunity, underscored by its volatile beta of 2.52. The company's revenue of CAD 294.99 million and net income of CAD 19.24 million in the latest fiscal year reflect operational stability, supported by strong operating cash flow of CAD 59.78 million. However, its reliance on a single mine (El Teniente) and exposure to fluctuating copper prices pose significant risks. The dividend yield of CAD 0.16 per share may appeal to income-focused investors, but the company's capital-intensive nature and dependence on Codelco's operations warrant caution. Long-term prospects are tied to global copper demand, particularly from green energy sectors, making Amerigo a speculative play on the energy transition.
Amerigo Resources differentiates itself through its tailings reprocessing model, which offers lower capital and operational costs compared to traditional mining. This approach reduces environmental liabilities and extends the life of existing resources, providing a sustainable edge. However, the company's reliance on Codelco's El Teniente mine limits diversification, exposing it to operational and contractual risks. Competitors with broader asset portfolios, such as Freeport-McMoRan and Southern Copper, benefit from economies of scale and geographic diversification. Amerigo's niche focus on tailings is both a strength and a vulnerability—while it minimizes exploration risks, it caps growth potential. The company's competitive positioning hinges on copper price trends and its ability to maintain cost efficiency amid inflationary pressures. Its small market cap also limits access to capital compared to larger peers, constraining expansion opportunities.