April 18 (Reuters) - Amerigo Resources Ltd, a Canadian copper and molybdenum producer, reported a 24 percent rise in first-quarter copper production, but warned that higher power costs resulting from drought in Chile would hurt its financial results.
Chile’s third consecutive drought and the delays in key generation projects have compounded energy problems in the country, whose grid has been hurt by years of underinvestment and a massive earthquake in early 2010.
“I am looking forward to January 2013 when our power contract changes from a variable to a fixed rate which will result in significantly lower power costs for the remaining five years of the contract,” Amerigo Chief Executive Klaus Zeitler said in a statement.
The company’s primary mine, called Minera Valle Central (MVC), is located in Chile. The MVC project produces copper and molybdenum concentrates from the tailings of the world’s largest underground copper mine, El Teniente, operated by Codelco .
For the January-March quarter, Amerigo produced 13.88 million pounds of copper, compared with 11.15 million pounds in the prior year. Molybdenum output for the quarter rose about 2 percent to 216,292 pounds.
The company said it expects 2012 production to meet or exceed its targets of 50 million pounds of copper and close to one million pounds of molybdenum.
Amerigo shares closed at 69 Canadian cents on Tuesday on the Toronto Stock Exchange.