Inca One Gold (IO.V) has announced it entered into a binding agreement with Montan Mining (MNY.V) and Goldsmith, the owners of the mill optioned by Montan Mining, to acquire that specific mill to boost its production capacity. Inca One will issue Montan 7 million shares and pay C$354,000 in cash and will issue 12.3 million shares to Goldsmith to acquire the entire mill.
This seems to be a pretty good deal as Inca One is acquiring yet another mill facility for shares + cash with a total value of just C$2.7M and that’s definitely cheaper than trying to permit and build a new mill. Additionally, the Montan mill is located just 40 kilometers away from the Chala processing plant so we see a lot of synergy advantages here.
We will provide an extensive update report on this acquisition next week after we discuss this agreement with Inca One’s management team, but we have the impression Inca One Gold will be one of the few toll milling companies in Peru that will develop sufficient economies of scale to become a dominant company in the Peruvian toll milling space.
We will be visiting Inca One’s Chala plant next month and will very likely also drive up to the newly-acquired Montan processing facility.
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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.
