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Inca One Gold acquires Koricancha Processing Facility in Peru

Mining News - Published on Thu, 19 Jul 2018

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Inca One Gold Corp announced on July 13, 2018 that it entered into a definitive purchase agreement to acquire 100% ownership of Anthem United Inc, which owns a 90.14% interest in the 350 tonnes per day Koricancha ore processing facility in Peru, from Equinox Gold Corp for cash and shares totaling approximately CAD 16.3 million, less any IGV tax credits collected to the benefit of Inca One. Koricancha is located approximately 50km from Inca one's ore processing facility and should give rise to cost synergies and provide a platform for growth. All dollar amounts in this press release are presented in Canadian dollars and all dollar amounts and production numbers reflect 100% of the Koricancha operations unless otherwise stated. The Purchase Agreement is an arms-length transaction and there are no finder's fees payable in relation to the Purchase Agreement.

Highlights of the Koricancha acquisition:

1. Accretive acquisition before synergies: anticipated increases in Inca One's revenues based on the three months ended April 30, 2018 of 186% and throughput by 150%, while increasing shares outstanding by only 75%.
2. Increases revenues: historical revenues for the three months ending April 30, 2018 for Inca One and Koricancha were approximately USD 3.5 million and USD 6.5 million respectively.
3. Increases production: immediately more than doubles Inca One's current throughput from 100 tonnes per day to approximately 250 TPD.
4. Cost synergies: reduction in Canadian corporate overhead unit costs, reduction in duplicate regional offices, centralized purchasing and operating efficiencies.
5. Platform for growth: Koricancha is permitted to 350 TPD with current throughput of 150 TPD, providing excess capacity to increase consolidated throughput by 80% to 450 TPD.
6. Diversifies production: the acquisition of Koricancha adds a second Peruvian processing facility.
7. Significant working capital addition: additional working capital to fund ore purchases de-risks operations at both plants.
8. Enhances scale and capital markets profile: Equinox, a new significant and supportive long-term shareholder that is a leader in the mining space, will hold 19.99% of the common shares of the Company post completion.

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Posted By : Rabi Wangkhem on Thu, 19 Jul 2018
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