How might this development influence analyst sentiment and target price revisions for Amerigo (ARG/ARREF)?

Analyst sentiment & target‑price outlook

The restart of fresh‑tailings processing at Minera Valle Central (MVC) signals that Amerigo’s flagship Chilean asset is moving from a “maintenance‑only” phase back to full‑capacity production. For a company that has been cash‑flow‑constrained, the ability to treat new tailings translates into two concrete upside drivers: (i) incremental metal recovery from a previously idle feed and (ii) lower processing‑cost per tonne as the plant can now run at its design throughput. In the short‑run, analysts will likely upgrade their earnings forecasts for FY‑2025‑26, trimming the “cash‑burn” narrative that has kept the stock on the lower‑end of its valuation range. The net‑effect will be a shift in sentiment from neutral‑to‑moderately‑bullish, reflected in a rise of the sentiment score from the current 60 toward the 70‑80 band.

Trading implications

On the price chart, Amerigo has been trading near its 200‑day moving average (≈ CAD 0.85) with modest upside pressure and relatively thin volume. The operational update removes a near‑term production‑delay risk, so a breakout above the 200‑day line could trigger a short‑covering rally and open the door for a test of the next resistance at CAD 0.95–1.00, a zone where several analysts have historically placed higher target prices. Conversely, a pull‑back toward CAD 0.80 would present a lower‑risk entry for traders looking to capture the upside from a potential analyst upgrade. In practice, expect most broker houses to lift their 12‑month target by 10‑15 % (e.g., from CAD 0.90 to roughly CAD 1.00) once the revised production outlook is baked into earnings models. Maintaining a position with a stop just below the 200‑day average (≈ CAD 0.80) would keep risk in check while allowing participation in any sentiment‑driven price appreciation.