The supply agreement with PPX is the latest and most significant partnership secured by Inca One in its first six years of commercial operations
The Igor Project is permitted for up to 350TPD. (Credit: Pixabay/PublicDomainPictures)
INCA ONE GOLD announced that it has, through its subsidiary, signed a one year Ore Purchase Agreement (OPA) for 40,000 tonnes of gold-bearing material with a subsidiary of PPX Mining.
Under the terms of the OPA, PPX will deliver 40,000 tonnes, approximately 110 tonnes per day (“TPD”) of gold-bearing material during the first year, with a minimum grade of 8 grams of gold per tonne to the Company’s Kori One processing facility. Initial shipments will commence during Q3 from gold-bearing material that is currently on PPX’s stockpile. Additionally, and in line with the Peruvian Government decree announced on June 4, 2020 outlining a staged restart of industrial activity across the country, PPX is in the process of restarting production at its Igor Project in order to ramp-up to previous production levels.
The Igor Project is permitted for up to 350 TPD and has approximately 223,000 ounces of measured and indicated resources and 77,000 ounces of inferred resources (please see the NI 43-101 Report on the Igor Project on the PPX website or on SEDAR). PPX has been operating in Northern Peru for three years and has been looking to build a relationship with a government approved processing facility that has excess capacity to process their material and scale up as production at the Igor Project increases.
“We are extremely pleased to secure a significant contract and establish this new relationship with a recognized and proven mining operator in Peru,” stated Edward Kelly, President and CEO of Inca One Gold. “To provide context, Inca One processed 55,000 tonnes of material in 2019, and this contract represents approximately 73% of last years’ total throughput. In other words, the OPA provides supply for approximately 25% of the total milling capacity of our two plants. As licensed miners and ore processors, we both value transparency, business ethics and intend to build out a significant and mutually profitable business relationship.”
Additional terms include Inca One providing a secured, advance payment based on certain milestones for up to US$400,000 to PPX, as well as other customary conditions such as early termination fees and repayment options for both parties. In the event PPX does not deliver 20,000 tonnes in the first year, the supply contract will be extended to a total of 80,000 tonnes by the end of the second year.
As part of Inca One’s growth strategy, it has always been a mandate to secure ore from multiple sources. This supply agreement with PPX is the latest and most significant partnership secured by the Company in its first six years of commercial operations. It will provide a steady and secured ongoing mill feed to Inca One and builds a mutually beneficial relationship for two long time operators in Peru.
Source: Company Press Release