Inca One Gold Corp has entered into a definitive purchase agreement to acquire 100% ownership of Anthem United, which owns a 90.14% interest in the 350 t/d Koricancha ore processing facility in Peru, from Equinox Gold Corp for cash and shares totalling approximately C$16.3 million, less any IGV tax credits collected to the benefit of Inca One.
Koricancha lies some 50 km from Inca one’s ore processing facility and should give rise to cost synergies and provide a platform for growth. Highlights of the Koricancha acquisition:
- 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%
- Increases revenues: historical revenues for the three months ending April 30, 2018 for Inca One and Koricancha were approximately $3.5 million and $6.5 million respectively
- Icreases production: immediately more than doubles Inca One’s current throughput from 100 to some 250 t/d
- Cost synergies: reduction in Canadian corporate overhead unit costs, reduction in duplicate regional offices, centralized purchasing and operating efficiencies
- Platform for growth: Koricancha is permitted to 350 t/d with current throughput of 150 t/d, providing excess capacity to increase consolidated throughput by 80% to 450 t/d
- Diversifies production: the acquisition of Koricancha adds a second Peruvian processing facility
- Significant working capital addition: additional working capital to fund ore purchases de-risks operations at both plants
- 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.
