What is Amerigo Resources?
Amerigo is a canadian mining company that produces copper concentrates. The commodity is gained by fresh processing of current and historic tailings from Codelco’s El Teniente mine in Chile, the world’s largest underground copper mine.
Why can Amerigo be a good long-term investment?
– High royalties have to be paid to government-owned Coldelco’s mine depending on production and quality
-The mine is not owned, only the rights to extract copper
+ 9,68% Quarterly and performance dividend
+ Very profitable operations with a gross margin between 22 to 36,1%
+ Supply problems in the coming years could drive the prices up (Shortages)
+ All debt could be paid back with cash (27 million debt Canadian and 42 million cash Canadian)
+ Most investments in property, technology, and equipment are already done (CapEx)
+ Company buys back stocks (Increases stock value)
+ 100% sustainability approved by international REC (Renewable Energy Certificate) will be important for the future
+ Mine life: Amerigo can extract until at least 2037 in El Teniente the world’s largest underground copper mine
+ Relatively high cash reserves (Last update:Q3 2022 – 41.8 million Canadian)
When will the demand for copper explode?
For a copper mining like Amerigo this could be huge as they can extract from the biggest underground mine of the world for many more years.
Conclusion
All in all, I think the demand for copper will rise as environmental sustainability will be important to form a clean, and healthier planet. A well-known example are electric vehicles that demand 3x times more copper than gasoline or diesel-driving cars. Also, copper will be essential for generating power from solar, hydro, thermal, and wind energy as those the most environmentally friendly solutions.
As an investor, I know that a dividend yield of 9,68% is highly attractive as it encourages to hold on to assets even in tough times.
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Important
Please note that this is not financial advice in any form and investments should only be done after research was made. Also be aware that I didtn invest in Amerigo Resoures and my opinion might be biased. This article only shows my opinion and should only be viewed as a presentation not an inducement for investing. Investing is at your own risk!