TORONTO (miningweekly.com) – Canadian copper miner Amerigo Resources, which produces copper and molybdenum from tailings from the world's largest underground copper mine, Codelco's El Teniente mine, in Chile, on Thursday reported higher first-quarter profit, buoyed by lower costs, despite lower copper and molybdenum production.

The Toronto-listed miner said net profit was up 40% to $3.23-million, compared with $2.32-million in the same quarter a year earlier.

Revenue was 15% lower year-on-year at $43.2-million, compared with $50.5-million in the first quarter of 2012, mainly owing to lower copper and molybdenum sales volumes and lower average metal prices.

Amerigo sold 12.48-million pounds of copper in the period, which was 11% less than the comparable period in 2012, and molybdenum sales declined by 21% to 240 744 lbs, compared with 303 547 lbs.

The company’s copper selling price before smelting, refining and other charges was $3.52/lb, compared with $3.55/lb a year earlier, and the company’s molybdenum selling price was $11.34/lb, compared with $14.10/lb in the comparable period a year earlier.

Copper production declined 8% to 12.83-million pounds, but molybdenum production was up 19% to 258 301 lbs.

Amerigo reported the cost of sales was $38-million, compared with $47.4-million in the first quarter a year earlier, which was a decrease of 20%, driven by lower production levels and substantially lower power costs, mainly owing to a change in the company's power contract from a variable to a lower fixed rate.

Amerigo said it expected copper production this year to reach only the lower end of the 45-million- to 50-million-pound range, however, the guidance for molybdenum production was revised downwards to about 700 000 lbs. The company added it was also undertaking a detailed economic review of molybdenum production under current prices, given the minimal profitability provided by the molybdenum operations.

The company’s stocks traded 8.33% lower in price at C$0.55 apiece on the TSX on Thursday.