An investment into a Junior Resource company in the process of developing a promising historic gold property in Northern Peru turned into an opportunity to help develop a Gold processing business when community and regulatory challenges promised to derail the project.
In 2014 the Peruvian Government were in the process of formalizing the Artisanal Mining sector. This presented an opportunity to position the business at the nexus of the process of purchasing gold ore from the regulated Artisanal and Small Scale Gold Mining sector, verifying origin and compliance with International regulations and processing it through to Gold doré for export to international refineries.
A small artisanal operation processing 10 tonnes a day was purchased in Chala in Arequipa Peru as it had applied for permits to process up to 100tpd. Non dilutive bond financing was secured to build out the operation.
Chala One commenced commercial production on February 1, 2015 after successfully upgrading the Chala One plant processing capacity to 100 tonnes per day. The Chala One Plant now constitutes a full-service milling facility, with weighing, sampling and metallurgical test facilities on site, along with crushing, grinding and carbon-leaching circuits, full material handling, desorption, smelting and tailings disposal facilities. The Company purchases gold-bearing material at discount to spot prices from legal small-scale miners after careful and systematic testing. Mineral is either stockpiled or processed to produce loaded carbon which is desorbed and smelted on site to produce its own gold dore.
On August 21, 2018, Inca One acquired Anthem United Inc. which owned 90.14% interest in the 350 tonnes per day (“TPD”) Koricancha ore processing facility in Peru (“Koricancha”), from Equinox Gold Corp. (TSXV: EQX) and certain minority shareholders.
Koricancha is a custom built, fully operational, industrial gold ore processing facility, featuring a carbon-in-pulp gold circuit, strategically situated in the Arequipa region of Peru.It is located at sea level, fully serviced by excellent infrastructure just 10 minutes from the Pan American Highway, within the Nazca-Ocona gold belt in Southern Peru.It is built out and permitted for 350 TPD and has been operating at an average of approximately 135 TPD since January 2018. It has been servicing the small-scale mining sector of Peru for three years and has a stockpile of material currently being processed.
The Koricancha Mill was initially commissioned in 2016 and processes gold bearing ore purchased from legal small-scale and artisanal miners. Under Peruvian law, artisanal miners must send their ore to licensed processing facilities. Koricancha tests the ore and builds relationships with miners who can provide a consistent supply of high-quality mineralized feed. Payments are set at time of purchase at a discount to market, the ore is processed, and then the gold and silver is sold at spot prices for Koricancha’s account.
Koricancha is located 47 kilometers from Inca one’s ore processing facility and should give rise to cost synergies and provide a platform for growth.When fully ramped up the Koricancha ore processing facility has the potential to produce 50,000 to 75,000 ounces of gold annually.
