Inca One buys Peru mill from Equinox Gold in ‘transformative acquisition’

Inca One has entered into a definitive purchase agreement to acquire 100% ownership of Athem United, which owns a 90.14% interest in the 350 t/d Koricancha ore processing facility, in southern Peru, from fellow TSX-V-listed miner Equinox Gold.

The Koricancha plant, in the Nazca-Ocona gold belt about 50 km from Inca One’s operations, is servicing the small-scale mining sector. The plant is currently operating at 150 t/d and will immediately more than double the throughput of Inca One to about 250 t/d. The acquisition will expand Inca One’s permitted capacity to 450 t/d.
In the past six months, the Koricancha plant produced 10 767 oz of gold and revenue of $14.4-million.

“The transaction is aligned with our long-term growth objectives and is an important milestone in the consolidation we foresaw in the processing space,” said Kelly.
The 3.5% gold stream currently payable by Koricancha will be terminated and, as a result, production from the plant will not be subject to any precious metal stream or royalties.
The transaction entails cash and shares totalling C$16.3-million, less any recoverable taxes. Equinox will and SA Targeted Investing Corp will each acquire a 19.99% interest in Inca One following the transaction.
The disposal of the Koricancha mill fits with Equinox’s strategy of focusing on its Aurizona and Castle Mountain gold mines.
“Further to the recently announced copper company spinout, this transaction allows Equinox Gold to retain upside exposure to Koricancha as a meaningful stakeholder of Inca One while staying consistent with the company’s strategy of building and operating significant gold projects,” commented Equinox CEO Christian Milau .
“Combining Koricancha with the operations of Inca One achieves operating efficiencies and meaningful scale in an industry characterised by smaller, single-asset operations, and provides a strong foundation for Inca One to build an industry leader in the Peruvian gold milling space,” he added.
Closing of the transaction is subject to the approval of the TSX-V and satisfaction or waiver of other customary closing conditions.