What you need to know: • Amerigo has a stellar capital return policy, currently offering a 7.4% dividend yield. The Company has returned C$0.62/share in the form of dividends and buybacks to shareholders since 2021. • ARG has a strategic contract with a world-class asset, Codelco’s El Teniente, and is highly leveraged to the copper price. • ARG trades at only 2.4x/2.5x 2024E/2025E EBITDA despite its long-term track record of creating shareholder value. Amerigo Resources (ARG:TSX, ARREF:OTC) is a copper producer which processes fresh and historical tailings from Codelco’s El Teniente mine in Chile, the world’s largest underground copper mine. Amerigo is levered to the copper price and is focused on returning capital to shareholders due to its low capex requirements, having returned C$0.62/share in the form of dividends and buybacks over the last three years. We are initiating coverage on Amerigo Resources with a BUY rating and a target price of C$2.50/share. Investment Thesis Summary Laser Focused on Returning Capital. ARG currently has a 7.4% dividend yield (not including performance dividends) and has returned C$0.42/share to shareholders via dividends since 2021. Also, ARG often repurchases shares in the open market, having bought back C$0.20/share since 2021. With minimal capex requirements going forward, ARG is set up to continue rewarding shareholders by paying down debt, issuing dividends (plus performance dividends), and buying back stock. Partnered with a World Class Asset. Amerigo is partnered with Codelco’s El Teniente mine, the largest underground copper mine in the world, which began operations in 1905 and is expected to continue operating until 2082. Amerigo has a >30-year strategic relationship with the mine, limiting geopolitical and jurisdiction risk given that Codelco is state-owned and crucial to Chile’s economy. Leverage to the Copper Price. ARG’s cashflow is highly leveraged to the copper price, which we are bullish on over the coming years. As per its 2025 guidance, a 24% increase in the copper price would result in a 46% increase in EBITDA, making it an ideal investment for those looking for copper exposure. Track Record of Success. Amerigo has a strong track record of growing production over the long-term, having grown copper produced from 41Mlbs to 65Mlbs over the last ten years. Now that all of ARG’s growth capex is complete and the copper price has stabilized, ARG can focus on returning capital to shareholders. Strong Shareholder Base. Amerigo has a large institutional shareholder base with Aegis Financial being the largest shareholder at 13% and other institutions owning 53%. Management and board own 14%, ensuring alignment for shareholder value. Valuation. Amerigo currently trades at 2.4x/2.5x 2024E/2025E EBITDA compared to its metals processing peers at 5.6x/4.7x. While Amerigo offers lower growth than its peers, it has much lower risk and the largest dividend. We value ARG based on 5.0x 2025E OCF, resulting in our C$2.50/share target price.