Amerigo Resources (ARG) AI Stock Analysis

• Market Cap: C$315.02M
• Dividend Yield: 8.79%
• Average Volume (3M): 275.52K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 1.08
• Revenue Growth: 24.21%
• EPS Growth: 465.48%
• Country: CA
• Employees: 290
• Sector: Basic Materials
• Sector Strength: 59
• Industry: Copper
• EPS (TTM): 0.16
• Shares Outstanding: 164,930,300
• 10 Day Avg. Volume: 317,067
• 30 Day Avg. Volume: 275,525
• PEG Ratio: 0.03
• 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: C$2.50
• Price Target Upside: 31.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

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.

Positive Factors

Commodity Prices

The copper price increased substantially after the quarter, positioning the Company for even stronger cash flow.

Dividend 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 also very strong, with revenue increasing 22% and adjusted EBITDA increasing 99%; exceeding annual guidance.

Negative Factors

Geopolitical Risks

Amerigo Resources' strategic partnership with Codelco's El Teniente mine helps reduce geopolitical and jurisdiction risks.

Market Valuation

Amerigo Resources trades at a relatively low multiple despite its long-term track record of creating shareholder value.

Amerigo Resources Business Overview & Revenue Model

Company Description

Amerigo Resources (ARG) is a mining company primarily focused on the production of copper. The company operates in the mining sector and is known for its innovative approach to extracting copper from tailings, which are the byproducts of mining operations. Amerigo Resources operates the Minera Valle Central (MVC) plant in Chile, where it processes tailings from the El Teniente mine, one of the largest underground copper mines in the world.

How the Company Makes Money

Amerigo Resources generates revenue through the production and sale of copper concentrates. The company processes historic and fresh tailings from the El Teniente mine, extracting copper and molybdenum. The extracted copper is then sold to various buyers in the global market, providing Amerigo with its primary source of income. Additionally, the company benefits from its strategic partnership with Codelco, the world's largest copper producer, which supplies the tailings that Amerigo processes. The fluctuating global copper prices significantly impact the company's earnings, as they influence the revenue generated from copper sales.

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: Positive
• Last Price: 1.91
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 1.91 is above the 20-day moving average (MA) of 1.88, above the 50-day MA of 1.79, and above the 200-day MA of 1.64, indicating a bullish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 54.77 is Neutral, neither overbought nor oversold. The STOCH value of 38.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ARG.

Amerigo Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARG	78 Outperform	C$315.02M	11.99	18.36%	8.79%	24.21%	465.48%
TKO	68 Neutral	$1.01B	11.15	-2.74%	―	26.54%	476.94%
LUN	66 Neutral	$10.34B	25.63	0.24%	3.16%	-2.71%	-188.94%
CS	56 Neutral	$5.89B	51.19	2.90%	―	12.21%	―
Sector *	47 Neutral	$2.66B	-3.11	-22.17%	3.33%	3.66%	-28.13%
OMM	36 Underperform	C$13.09M	―	-31.71%	―	―	18.85%

Amerigo Resources Corporate Events

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.

Amerigo Resources Outperforms 2024 Guidance with Record Production

Amerigo Resources Ltd. reported strong operational results for 2024, with copper and molybdenum production exceeding their guidance. The company achieved a record delivery of 65 million pounds of copper and produced 1.3 million pounds of molybdenum, reflecting a significant enhancement in production efficiency and cost management, with no environmental incidents or lost time accidents reported. Looking ahead to 2025, Amerigo aims to maintain its solid performance and plans to be debt-free by the end of the year, utilizing strategies such as dividends and share buybacks to return surplus cash to shareholders.