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 Tuesday said it had produced less copper in the first quarter as a result of lower grades.

Production for the quarter ended March 31, from Minera Valle Central (MVC), the company’s operations located near Rancagua, totalled 12.83-million pounds of copper, which was 5.38% lower quarter-on-quarter and 7.5% below that produced in the same quarter a year earlier.

Copper sales declined by 11.36% year-on-year to 12.48-million pounds in the quarter, and copper prices for the quarter were also a percentage point lower at $3.52/lb, compared with the same quarter a year earlier.

Molybdenum production in the period declined 11.34% quarter-on-quarter to 258 000 lbs, which, however, was a 19.44% increase on the same quarter in 2012.

Molybdenum sales declined by 20.7% year-on-year to 241 000 lbs, and the recorded price was also down by almost a fifth at $11.34/lb when compared with the $14.10/lb the company recorded in the first quarter of 2012.

CEO Dr Klaus Zeitler on Monday said the company was on track to meet or exceed its guidance of 45-million to 50-million pounds of copper and one-million pounds of molybdenum for the year.

He added power costs for the quarter were $0.097/kWh or less than half the price the company paid in the first quarter of 2012. The lower costs were expected to positively impact the company’s finances to December 31, 2017, when the term of the company's current power contract comes to an end.

COO Rob Henderson added MVC was continuing to increase the extraction rates at Colihues and the lower grades experienced in first quarter were expected to improve from the third quarter, owing to the extraction zone extending deeper into the deposit.

The company’s stock gained 1.85% to trade at 55 Canadian cents apiece on Tuesday on the Toronto bourse.