Inca One Gold (IO.V) has announced a gold production of 1,659 ounces in May and June, which is more than twice as much compared to the same months last year. This is a decent result considering the company was operating at a throughput of just 60 tonnes per day which is 5% higher than in Q1 of this calendar year but still below the nameplate capacity of the Chala One mill of 100 tonnes per day.
The company recovered approximately 0.45 ounces of gold per tonne of rock which means it’s processing mineral with an average grade below its 0.7-0.8 oz/t target, but this could easily be explained by the fact A) Inca One is ‘re-ramping up’ towards the 100 tonnes per day and B) the bad weather has disrupted the supply of gold-bearing rock to the Chala One plant.
The deliveries of mineralized rock have now picked up again, and Inca One now also has more financial flexibility to purchase more rock as it closed the final t ranche of a C$2.2M financing, priced at C$0.10 per unit. Insiders have participated for 2.8 million units of this financing (C$280,000).
Whilst Inca One is working towards increasing its production rate, it’s also looking at the other side of the equation as it’s also trying to cut costs where possible. As Chala One has now been connected to the power grid, the energy expenses should be reduced quite substantially as being powered by the grid will obviously be much cheaper than using diesel generators. Chala is currently able to cover 2/3rd of its energy needs from the powerline whilst it should be able to reach the 100% mark once the regional power supplier upgrades the grid at and around Chala which is expected to be completed in the coming months.
There have also been some changes on the corporate front as Oliver Foeste has resigned as Inca One’s CFO, and he will be replaced by Kevin Hart, the corporate controller of Asanko Gold (AKG, AKG.TO). Inca One also reshuffled its board of directors as it appointed Rodney Stevens and Adrian Morger to the board. Both gentlemen seem to have extensive experience in the financial side of the mining sector and we expect them to provide valuable input as Inca One is ramping up its gold production rate again.