Amerigo Resources (ARG) AI Stock Analysis

• Market Cap: $279.44M
• Dividend Yield: 9.5%
• Average Volume (3M): 363.96K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 1.13
• Revenue Growth: 24.21%
• EPS Growth: 465.48%
• Country: CA
• Employees: 290
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Copper
• EPS (TTM): 0.16
• Shares Outstanding: 164,374,760
• 10 Day Avg. Volume: 328,070
• 30 Day Avg. Volume: 363,961
• PEG Ratio: 0.02
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.14
• Price to Cash Flow (P/CF): 2.60
• P/FCF Ratio: 2.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2.50
• Price Target Upside: 43.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Amerigo Resources' overall score reflects strong financial performance and a positive earnings call, emphasizing revenue growth, cash generation, and shareholder returns. While technical indicators are neutral, the stock's attractive valuation, coupled with a bullish outlook on copper prices, positions it well for potential growth. The cyclical nature of the industry remains a consideration, but the company's operational strengths and efficient capital management offer a favorable investment outlook.

Positive Factors

Capital Return Policy

Amerigo Resources has a strong capital return policy, offering a 7.4% dividend yield and returning C$0.62/share to shareholders through dividends and buybacks since 2021.

Financial Performance

Annual results were very strong, with revenue increasing 22% and adjusted EBITDA increasing 99%, exceeding annual guidance.

Strategic Partnership

Amerigo Resources has a strategic partnership with Codelco's El Teniente mine, the largest underground copper mine in the world, reducing geopolitical and jurisdiction risks.

Negative Factors

Cost Management

Cash costs came in at $2.22/lb, above the estimate of $1.88/lb.

Market Conditions

Copper prices rose substantially in Q1, followed by a sharp drop due to U.S. tariffs, despite remaining high at >$4.00/lb.

Production

Quarterly copper production was 13.2Mlbs, below the estimate of 14.9Mlbs due to the scheduled annual plant maintenance.

Amerigo Resources Business Overview & Revenue Model

Company Description

Amerigo Resources Ltd. (ARG) is a Canadian company engaged in the production of copper and other valuable metals. Operating primarily in the mining and metals sector, the company focuses on the extraction and processing of copper, with its main operations based in Chile. Amerigo Resources primarily produces copper concentrate and molybdenum as by-products, leveraging its expertise in sustainable mining practices and strategic partnerships.

How the Company Makes Money

Amerigo Resources makes money through the extraction and sale of copper concentrate, which is produced from tailings, the materials left over after the initial processing of ore. The company's primary revenue stream comes from its MVC (Minera Valle Central) operations in Chile, where it processes tailings from the El Teniente mine, one of the world's largest underground copper mines. Revenue is generated through long-term agreements with major mining companies that provide a stable supply of tailings for processing. Additionally, the company earns income from the sale of molybdenum, a by-product of its copper production, which is used in various industrial applications. Strategic partnerships with local and international stakeholders also play a critical role in the company's ability to maintain and expand its operations.

Amerigo Resources Financial Statement Overview

Summary

Amerigo Resources presents a robust financial outlook with significant improvements across income, balance sheet, and cash flow metrics. The company exhibits strong revenue and profit growth, efficient cash generation, and maintains a low-leverage balance sheet. However, the cyclical nature of the mining industry and historical fluctuations in revenue and assets necessitate cautious optimism for future stability and growth.

Income Statement

Amerigo Resources demonstrates strong income statement metrics with significant improvements in revenue and profitability. The gross profit margin improved from 8.8% in 2023 to 15.4% in 2024, indicating better cost management. The net profit margin also enhanced from 2.1% to 6.5%. There was a remarkable revenue growth rate of 87.3% from 2023 to 2024, showcasing substantial sales growth. EBIT and EBITDA margins have also increased, reflecting robust operational performance, though historical fluctuations in revenue highlight potential volatility in the mining sector.

Balance Sheet

The balance sheet of Amerigo Resources is stable, with a low debt-to-equity ratio of 0.03 in 2024, indicating minimal leverage and financial risk. Return on Equity (ROE) improved to 18.4%, reflecting efficient use of equity to generate profits. The equity ratio stands at 51.0%, signifying a strong equity base relative to assets. However, the decreasing trend in total assets and stockholders' equity over recent years suggests a need for future growth and investment to sustain long-term competitiveness.

Cash Flow

Cash flow analysis shows commendable performance with a significant free cash flow growth rate of 1386.4% from 2023 to 2024, driven by increased operating cash flow and reduced capital expenditures. The operating cash flow to net income ratio of 3.1 indicates strong cash conversion from profits. The free cash flow to net income ratio of 2.6 further supports efficient cash generation. These metrics underscore the company's ability to generate cash, crucial for sustaining operations and funding growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
294.99M	157.46M	264.19M	300.58M	178.38M
	Gross Profit
45.41M	13.86M	28.32M	72.09M	15.39M
	EBIT
34.11M	9.63M	22.90M	64.27M	11.78M
	EBITDA
57.61M	29.98M	45.59M	84.16M	27.98M
	Net Income Common Stockholders
19.24M	3.38M	4.37M	39.82M	6.06M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.86M	17.15M	37.82M	59.79M	7.99M
	Total Assets
205.47M	199.56M	231.18M	269.35M	237.57M
	Total Debt
3.23M	20.71M	25.91M	33.85M	59.50M
	Net Debt
-32.64M	4.46M	-11.91M	-25.95M	51.52M
	Total Liabilities
100.68M	94.71M	112.48M	130.55M	126.89M
	Stockholders Equity
104.79M	104.85M	118.70M	138.79M	110.68M
Cash Flow		Free Cash Flow
50.44M	3.39M	13.82M	81.17M	16.98M
	Operating Cash Flow
59.78M	20.28M	23.63M	93.13M	19.78M
	Investing Cash Flow
-9.34M	-16.89M	-9.81M	-8.10M	-2.72M
	Financing Cash Flow
-29.40M	-24.91M	-35.89M	-36.82M	-10.66M

Amerigo Resources Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ARG, the sentiment is Neutral. The current price of 1.74 is below the 20-day moving average (MA) of 1.78, below the 50-day MA of 1.81, and above the 200-day MA of 1.66, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 44.06 is Neutral, neither overbought nor oversold. The STOCH value of 61.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ARG.

Amerigo Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARG	76 Outperform	$279.44M	10.67	18.36%	9.50%	24.21%	465.48%
LUN	64 Neutral	$8.88B	25.63	0.24%	3.25%	-2.71%	-188.94%
TKO	58 Neutral	$928.67M	11.15	-2.74%	―	15.26%	-114.98%
CS	56 Neutral	$4.62B	43.58	2.90%	―	20.74%	―
Sector *	49 Neutral	$1.92B	-1.52	-22.04%	3.84%	0.67%	-27.41%
OMM	36 Underperform	C$10.47M	―	-31.71%	―	―	18.85%

Amerigo Resources Corporate Events

Amerigo Resources Reports Q1-2025 Results, Maintains Annual Guidance

Amerigo Resources reported its Q1-2025 operational results, highlighting a copper production of 13.2 million pounds, aligning with its annual guidance. The company successfully completed its annual plant maintenance shutdown, which typically results in the lowest production quarter. Despite short-term volatility in copper prices due to global trade shifts, Amerigo remains on track with its production and cash cost guidance for 2025. The company returned $4.6 million to shareholders and maintained a strong cash position, supporting its goal to be debt-free by the end of the year.

Spark’s Take on TSE:ARG Stock

According to Spark, TipRanks’ AI Analyst, TSE:ARG is a Outperform.

Amerigo Resources exhibits a strong financial performance with significant improvements in revenue and profitability, efficient cash generation, and low leverage, positioning it well in the volatile mining industry. The stock is technically stable with neutral indicators, and its valuation is attractive with a reasonable P/E ratio and high dividend yield. The positive earnings call underscores operational excellence and a solid shareholder return strategy, despite some minor challenges. Overall, these factors contribute to a favorable investment outlook for the stock.

To see Spark’s full report on TSE:ARG stock, click here.

Amerigo Resources Reports Strong 2024 Financial Results and Sets Ambitious 2025 Goals

Amerigo Resources Ltd. reported a net income of $19.2 million for 2024, with an EBITDA of $68.8 million and free cash flow to equity of $27.8 million. The company returned $21.2 million to shareholders through dividends and share buybacks as part of its Capital Return Strategy. The company exceeded its production and cash cost guidance, benefiting from strong copper prices. Looking forward, Amerigo aims to eliminate its remaining debt by the end of 2025, positioning itself to capitalize on anticipated higher copper prices and continue rewarding shareholders.

Amerigo Resources’ MVC Operation Celebrates Safety Milestone

Amerigo Resources announced that its Minera Valle Central (MVC) operation in Chile has achieved a commendable safety milestone by completing three consecutive years without lost-time accidents. This achievement illustrates the effectiveness of the company’s safety practices and training programs, reinforcing its commitment to worker well-being and operational continuity. With 296 regular employees and over 880 workers during peak maintenance periods, this safety milestone is crucial for minimizing financial risks and upholding productivity.