Inca One Gold (IO.V) is entering the final phase of the three-phased ramp-up plan at its Chala One plant in Peru. In November, Chaal processed just over 2,200 tonnes of material for an average processing rate of 74 tonnes per day. That’s substantially higher than the 29 tonnes per day in the first three quarters of this year. The total gold production was 1,073 ounces of gold, indicating a recoverable gold value of almost 0.5 ounces per tonne of processed material.
Inca One is definitely getting stronger on a weekly basis and although no financial results have been shared, we expect the company to be breaking even at the current production levels, and once the company reaches the 100 tonnes per day on a steady state basis and starts to process higher grade ore, Inca One should be able to generate a positive free cash flow (which we expect to happen from next quarter on).
We will also continue to focus on the purchased/processed ratio. In order to keep its stockpiles at a constant level, Inca One will need to purchase as much ore as it’s processing. In November, Inca One added 1,970 tonnes to its stock pile, which means the ratio comes in at 89%. We do expect this ratio to increase to 100% after New Year.
We aren’t expecting much from the financial results of the quarter ending in October, but the current quarter should allow Inca One’s results to improve dramatically. We expect Q3, ending in April 2017, to be the first quarter with a positive free cash flow on a company-wide basis. The past few years have been tough for Inca One’s shareholders, but optimism is now definitely allowed again!
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The author has a long position in Inca One Gold. Inca One is a sponsor of the website. Please read the disclaimer
