Inca One Gold (IO.V) has announced the construction and installation of the two new ball mills at the Chala plant has been completed. The commissioning of the first ball mill is ongoing and now the second mill has been brought online. We are expecting a relatively smooth ramp up stage during the first quarter of this year and are anticipating commercial production to be declared before the end of March.
This also means the era of ‘test-milling’ is over and Chala should be operating on a continuous schedule from here on. Obviously the gold output will still vary a bit and shareholders shouldn’t expect a straight-lined production increase, but we do expect Inca One to be free cash flow positive in the second half of this year.
The company has also announced it signed two more agreements to buy ore from small gold mines in Peru. These two new contracts cover a total delivery of approximately 950 tonnes of ore per month which means the company is on track to have long-term delivery agreements for 1,500 tonnes per month in place which was its aim. No further details have been published, but after visiting the mill site in December it looks like this ore will very likely meet the company’s target grade of 0.8 ounces of gold per tonne of rock.
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Disclosure: The author holds a long position in Inca One Gold. Inca One is a sponsor of the website. Please see our disclaimer for current positions.
