Inca One Gold (IO.V) has raised an additional C$500,000 in debt through SC Strategy Consult which was also instrumental in the initial C$5.5M debt financing for the company. The cash will be used to purchase additional ore to process at its Chala One mill which is still ramping up towards its target of 100 tonnes per day. The debt carries a 14% coupon and an 8% finders fee will be payable, which makes this quite an expensive form of financing. However, if Inca One had the choice between either issuing this debt or turning potential long-term clients away, then it’s the best decision the company could have made.
Additionally, the company has also signed another ore purchase agreement whereby an unnamed mining company will deliver approximately 400 tonnes per month to the Chala One plant. The expected average grade of this ore is 0.95 ounces of gold per tonne which is higher than the 0.8 oz/t Inca One has been targeting. 45% of the monthly capacity of 3,000 tonnes has now been covered by long-term ore supply agreements, and the company is zeroing in on its target of 1,500 tonnes per month being delivered under long-term ore agreements.
The ramp up at the Chala One plant seems to be going extremely smooth and we are looking forward to see a production update sometime soon.
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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.
