The Codelco El Teniente copper mine, the world's largest underground copper mine, near Machali, Chile, in April, 2019.Ernest Scheyder/Reuters
Copper has been in the news lately, mainly because a lot of people are stealing it. It’s not a precious metal, but it’s essential to businesses such as AI, telecommunications, electricity, industrial sites, construction and more. Copper thefts have resulted in power cuts and loss of 911 services in some areas. The internet is full of stories about how copper thieves have disrupted people’s lives.
The problem is that there is not enough supply to meet demand. According to the International Energy Agency, the copper market “is experiencing a structural, long-term deficit driven by accelerating demand from electrification and AI, alongside constrained supply from mining bottlenecks and declining ore grades.”
As a result, copper prices are hovering near record highs (recently US$6.10/lb.), due to scarcity. This isn’t just growth optimism at work, it’s a genuine shortage.
One Canadian company that is profiting from the high demand is Vancouver-based Amerigo Resources (ARG-T). Through its 100-per-cent owned MVC operation in Chile, Amerigo produces copper from the waste material of the world’s largest underground copper mine, Codelco’s El Teniente mine. Since 1992, the company has produced 1,062 million pounds of the metal.
The company uses a simple technology that produces predictable operations and cash flow. It rewards shareholders through a capital return strategy that includes regular quarterly dividends, performance dividends, and share buybacks.
The result is a mining investment that provides steady income and capital gains potential in a high-demand commodity. I’m making it my top pick for my Income Investor newsletter for this month. Details follow.
Amerigo Resources Ltd.
Type: Common stock
Trading symbol: ARG
Exchange: TSX
Current price: $6.09 (close on May 1)
Entry level: Current price
Annual payout: $0.35 (trailing 12 months)
Yield: 5.7 per cent
Market cap: $1-billion
Risk Rating: Higher risk
Website: www.amerigoresources.com
The business: Amerigo Resources Ltd. is an innovative copper producer with a long-term relationship with Corporación Nacional del Cobre de Chile (Codelco), the world’s largest copper producer. Amerigo produces copper concentrate, with molybdenum concentrate as a by-product, at the MVC operation in Chile by processing fresh and historic tailings from Codelco’s El Teniente mine, the world’s largest underground copper mine.
The security: I recommend the common shares of Amerigo, which trade on the TSX.
Why I like it: It’s unusual to find a copper miner that pays a high and sustainable cash flow. What makes it more interesting is that demand for copper is rising at a rapid rate, offering the prospect for capital gains. The share price is up about 35 per cent so far this year.
Financial highlights: On April 12, the company released financial results for the first quarter of 2026 from Minera Valle Central (MVC), the Amerigo’s 100-per-cent owned operation located near Rancagua, Chile. Note that the amounts are in U.S. dollars unless indicated otherwise.
“MVC delivered production above expectations in Q1-2026 while completing its annual maintenance shutdown,” said CEO Aurora Davidson. “Our cash cost also came in significantly below annual guidance during the quarter. MVC’s strong operating performance was further supported by robust copper market fundamentals, with London Metal Exchange copper prices averaging $5.83 per pound, the highest quarterly average price on record. These prices reflect the continued underlying strength in the copper market and contributed to the tremendous cash generation achieved during the quarter.”
Amerigo will release its own financial results on April 29.
Risks: The main concern is the price of copper. It’s now at record highs, and the demand suggests it should continue to rise. But anything that reduces demand, such as a recession, would put downward pressure on copper prices and hit Amerigo’s share price.
Distribution policy: The company pays a quarterly distribution of four cents a share. But it frequently approves special payments, such as the $0.16 per share dividend that was paid on April 20.
Tax implications: Amerigo is a Canadian company, so distributions are eligible for the dividend tax credit.
Who it’s for: This is a stock for aggressive income investors who are willing to accept higher risks in return for an above-average yield and capital gains potential.
How to buy: The shares are actively traded, with a daily average volume of about 727,000.
Summing up: This is an unusual pick for the conservative Income Investor newsletter but one that I think offers superior long-term potential.
Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.