Then in December 2013, the company terminated its exploration business and pivoted into a primary gold processing company. “If we want to lower risk and maximize leverage for our shareholders, we must concentrate our efforts in expanding our toll milling business,” Kelly said about the move.
Since pivoting it has made further acquisitions to grow its business and gain a significant share of the market.
So, Inca One’s growth strategy is to use synergistic acquisitions to grow its processing capacity and thus grow revenue.
Since 2015, when it started commercial operations in Peru, it has grown the top line by about 20 percent per annum.
Its plants are currently operating at about 35% of capacity so there’s plenty of room to increase production and sales.
In May 2020, commenting on the company’s growth prospects, Edward Kelly, president and CEO said, “Last year we operated at approximately 150 tonnes per day (tpd) and we produced 25,000 oz (ounces) of gold. We have 300 tpd to fill and we expect to do that over the next 12-24 months which could potentially take us to 75,000 to 80,000 oz.”
Because the company now has all its fixed cost infrastructure in place, increasing production should grow profits exponentially due to economies of scale.
On a sector level, Peru's small-scale mining sector has grown over 80% since 2001 and is worth over USD1 billion dollars.
Given that Peru has even more silver reserves than gold, and silver processing uses the same processing infrastructure as gold, silver processing could be a growth area in the future.
ENVIRONMENTAL IMPACT SENSITIVITY
Being home to a section of the Amazon Rainforest, the world’s largest tropical rainforest, makes Peru sensitive to environmental scrutiny.
And because small-scale mining activities in Peru had a reputation for widespread environmental damage, Inca One's processing plants are strategically located in the desert along the Peruvian coast to minimize their environmental impact.
Furthermore, the government continuously monitors the plants to ensure ongoing compliance with environmental safety standards.
CREDIBLE MANAGEMENT TEAM
According to the company, Inca One has assembled an operating team with deep industry knowledge and roots in Peru.
As global concerns about the COVID-19 pandemic recede and countries reopen their economies, high unemployment and rising geopolitical tensions continue to drive uncertainty.
Consequently, investors are moving into gold for its safe-haven status and gold stocks are poised to advance in the near term.
However, you may not be keen on physical gold holdings.
Therefore, consider an investment in Inca One Gold, a Canadian-based gold producer operating two, fully permitted, gold ore processing facilities in Peru.
As the largest gold processor of ore from legal small-scale miners, Inca One commands a significant share of the Peruvian toll milling market.
Its processing facilities currently operate below capacity so there’s ample room to increase production and grow both the top and bottom line.
Inca One Gold Corp. trades in the U.S. (OTCMKTS: INCAF), Germany (Frankfurt:SU9), Canada (TSX.V:IO), and Chile (SSEV:IOCL).
Please read our full disclaimer by clicking here. Statements regarding the Company which are not historical facts are "forward-looking statements" that involve risks and uncertainties. Such information can generally be identified by the use of forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative thereof or similar variations. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements due to factors such as: (i) fluctuation of mineral prices; (ii) a change in market conditions; and (iii) the fact that future operational results may not be accurately predicted based on this limited information to date. Except as required by law, the Company does not intend to update any changes to such statements. Caddy Stocks believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. This article shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.