Amerigo Resources Molybdenum Plant Ahead Of Schedule >ARG.T
12:50 EST Friday, January 28, 2005
VANCOUVER (Dow Jones)--Construction of Amerigo Resources Ltd. 's (ARG.T) molybdenum concentrate plant in Chile is ahead of schedule and is set to be completed next month, about three months ahead of schedule.
In a news release, Amerigo said the concentrate plant will extract molybdenum from copper concentrate already being produced by its Minera Valle Central subsidiary at its plant near Santiago.
Minera Valle Central, or MVC, is a copper-producing company with a long-term contract to process tailings from Codelco's El Teniente copper mine.
Commissioning of the plant is expected to occur in March followed by a period whereby concentrate grade and specifications will be optimized. Amerigo said MVC estimates production of more than 500,000 pounds of molybdenum in concentrates in 2005, and expects to increase molybdenum output to about 800,000-1 million pounds in 2006.
A sales agreement has been reached with Molybdenos y Metales S.A., or Molymet, the world's largest molybdenum producer with a conversion facility only 75 kilometers from the MVC plant. The agreement is for an initial three years with a base treatment charge plus a price participation factor. MVC will also pay Codelco a flat 10% royalty on molybdenum production.
Demand for molybdenum is booming in part because of demand from China, Amerigo said. Molybdenum is generally found as a by-product of copper and is used in steel alloys, particularly stainless steel.
Amerigo is a junior copper and molybdenum-producing company.
Company Web Site: amerigoresources.com
-Carolyn King, Dow Jones Newswires; 416-306-2100
Dow Jones Newswires
01-28-05 0901ET
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