TORONTO (miningweekly.com) – Tailings reprocessor Amerigo Resources has topped its full-year 2014 copper production target and lifted the outlook for its 2015 output by 25%, as more production capacity is expected to come on line.

This week, Amerigo, which used a proprietary technologically advanced process to reprocess old and fresh tailings at the Minera Valle Central (MVC) operations, in Chile, reported output of 11.35-million pounds of copper, including copper produced under MVC’s tolling contract with Minera Maricunga, and 160 000 lb of molybdenum during the three months ended December 31.

Both copper and molybdenum output in the fourth quarter were the highest for the year.

Full-year 2014 output was 41.04-million pounds of copper at a cash cost of $2.08/lb, beating guidance of 40-million pounds of copper at a $2.15/lb copper cash cost. The company also produced 580 000 lb of molybdenum.

MVC recovered copper and molybdenum from the tailings of Codelco-Chile’s El Teniente Division (DET by its Spanish initials) and also held the rights for removing and processing the old tailings deposited in the Colihues dam by DET.

For 2015, Amerigo expected MVC to produce 50-million pounds to 55-million pounds of copper, at an annualised cash cost  between $1.80/lb and $2/lb of copper.

The company expected a significant increase in output and a decrease in cash cost in the fourth quarter once the Cauquenes expansion came into production. Copper output was expected to ramp up from about ten-million pounds in the first quarter to about 19-million pounds in the year-end quarter.

MVC had obtained all the necessary construction permits for the Cauquenes expansion and, as of December 31, had incurred close to $16-million in capital expenditures.

The company continued to work with BBVA, the lead bank in the banking syndicate, towards the completion of the bank portion of the expansion’s financing.

Meanwhile, MVC had agreed to modify the April 2014 master agreement with DET under which MVC bought the processing rights to the Cauquenes tailings deposit and extended its rights to process El Teniente mine tailings from 2021 to 2037.

According to the modification, MVC had agreed to deliver all its copper concentrates to DET up until December 31, 2022, in exchange for a price support agreement from DET amounting to $17-million.

MVC would draw down $1-million from the DET facility each month in 2015 and 2016, during which the average copper final settlement price to MVC was less than $2.80/lb of copper, until it reached the $17-million maximum.

The DET facility would bear interest at a rate of 0.6% a month and would be subordinate to MVC’s bank financing. This agreement ensures a long-term, secure destination for MVC’s copper output at the London Metal Exchange’s copper price and industry benchmark treatment and refining charges.