tsxv: io - inca one gold corp. · 2020-06-29 · • processing in calendar 2019 also reached an...
TRANSCRIPT
TSXV: IO / OTC: INCAF / Frankfurt: SU9.F
July 2020
Forward Looking StatementsThis presentation includes forward-looking statements which are not historical facts but instead address future events and conditions which by their verynature, involve inherent risks and uncertainties. Such information can generally be identified using forward-looking wording such as “may”, “expect”,“estimate”, “anticipate”, “intend”, “believe” “potential” and “continue” or the negative thereof or similar variations.
Forward-looking information in this presentation includes, but is not limited to, intended acquisitions, upgrades and production at milling facilities,financing plans, use of proceeds and estimated net income. Actual results in each case could differ materially from those currently anticipated in suchstatements due to factors such as: (i) fluctuation of mineral prices and exchange rates; (ii) change in market conditions; (III) the fact that the Company’sdevelopment and factors affecting it may be very different from other companies; (iv) availability and quality of mill feed; (v) regulatory and politicaldevelopments and (vi) future operational results may not be accurately predicted based historical results and on information to date.
Forward-looking statements and other information contained herein concerning the metals and mining industry and Inca One’s general expectationsconcerning the industry are based on estimates prepared by management using historical data from publicly available industry sources as well as fromprivate sources, industry analysis and on assumptions based on data and knowledge of the this industry which the Company believes to be reasonable.However, certain data is inherently imprecise. While Inca One is not aware of any misstatements regarding any industry data presented herein, theindustry involves risks and uncertainties and is subject to change based on various factors. There is no certainty the projections will be met.
Our forward-looking information is based on the beliefs, expectations and opinions of management on the date the statements are made. We do notassume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than asrequired by applicable law. A number of factors could cause actual results to differ materially from the results discussed in the forward-lookingstatements including, but not limited to, changes in general economic, political and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actualresults will be consistent with these forward-looking statements. Investors should not place under reliance on these forward-looking statements.
Future-Oriented Financial InformationIn addition this presentation contains future-oriented financial information (“FOFI”). The purpose of the FOFI is to provide prospective investors withinformation pertaining to the Company’s longer-term objectives. Readers should be cautioned that information may not be appropriate for otherpurposes.
CurrencyUnless otherwise indicated, all dollar values herein are in Canadian dollars.
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About Inca One
Inca One Gold Corp is a gold producer operating two, fully permitted, gold mineral processingfacilities in Peru. The Company produced nearly 25,000 ounces of gold from its operations in2019 and has generated over US$100 million in revenue over the last five years. Inca One, nowin its sixth year of commercial production, is led by an experienced and capable managementteam that has established the Company as a trusted leader in servicing governmentpermitted, small scale miners in Peru. Peru is the world’s sixth-largest producer of gold and itssmall-scale mining sector is estimated by government officials to be valued in the billions ofdollars annually. The company possesses a combined 450 tonnes per day permittedoperating capacity at its two fully integrated plants, Chala One and Kori One, and is targeting afourth consecutive year of increased production and sales growth.
Company highlights include:
➢ First publicly traded gold processing company to complete permitting under Peru’s formalization legislation.
➢ Largest public trading processor in Peru with 450 TPD permitted capacity.
➢ Over US$100 million sales in first 5 years of operations ($35M sales in 2019).
➢ Three consecutive years of increased production and sales.
➢ Experienced in house, full time management team and trustworthy Peruvian team.
➢ Ideally positioned for scale and growth with 65% unused plant capacity.
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Why Peru?• The most important players in the mining industry currently have
operations in Peru:
➢ Newmont, Glencore, Teck, BHP Billiton, Rio Tinto, Barrick, Freeport McMoRan
• Peru is among the top producers in the following commodities:
➢ Copper: 2nd with 12.1% of global production
➢ Gold: 6th with 5.1% of global production
➢ Zinc: 2nd with 11.2% of global production
➢ Silver: 2nd with 16.6% of global production
➢ Lead: 4th with 6.5% of global production
• Investment flows into the mining sector over the next years are expected at US$ 59.5B.
• Peru is well positioned in mining space with vast reserves:
➢ Silver, 1st
➢ Zinc & Copper, 3rd
➢ Gold, 7th
• Politically and economically stable - pro-business environment.
• Second best credit rating in LatAm:
➢ Investment Grade since 2008
• Outperformer of the LatAm Region with an outstanding macroeconomic environment:
➢ Peru´s forecast growth rate above LatAm
➢ Low and stable inflation
Source: Ministerio de Energía y Minas (MEM)
4%
7%
10%12%
18%
0%
5%
10%
15%
20%
Gold Lead Copper Zinc silver
% o
f W
orl
d R
ese
rves
Peru’s Reserves
4.1%
2.5%
3.7%4.0% 3.9% 3.9% 3.9%
-0.6%
1.3%
2.0%
2.8% 2.8% 2.8% 2.8%
-1%
0%
1%
2%
3%
4%
5%
2016 2017 2018E 2019E 2020E 2021E 2022E
%
Peru LatAm
Real GPD Growth Rate: Peru vs LatAm
12% 13%15%
17%
12%
16%
12%14%
24%21% 20%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
% o
f to
tal p
rod
uct
ion
151.6
140.1
146.8
153151.1
145
2013 2014 2015 2016 2017 2018
FMT
Gold Mining in Peru
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G O L D P R O D U CT I O N
2018 PRODUCTION BREAKDOWN BY REGION
REPORTED SMALL SCALE GOLD PRODUCTION
Peru was the 6th largest producer of gold in 2018, with 145 fine metric tonnes (“FMT”), roughly 5
million oz.
La Libertad, Cajamarca and Arequipa among the regions with the largest production (63% of total
Peruvian production).
Small scale mining is widespread across Peruvian Andes and represented @ 20% of all 2018 reported
Peruvian gold production.
1,242,109
1,104,795
777,694
414,488
358,608
1,091,513
LA LIBERTAD
CAJAMARCA
AREQUIPA
AYACUCHO
MADRE DE DIOS
OTHER REGIONS
ounces
Source: Ministerio de Energía y Minas (MEM)
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• As a result of small-scale mining activity, there is aneed for gold processing mills.
• It is estimated that at least 15,000 TPD of ore is beingproduced by this group of miners, with average headgrades of 0.5 ounces per tonne processed.
• +82% increase in production since 2001 (from 547 k ozto 996 k oz).
• Mill plants are regulated by the Mining Law (approvedby D.S. N° 014-92-EM) and the Small and ArtisanalMining Formalization and Promotion Law (N° 27651).
• Only fully permitted plants are operating in the marketand gold supply to these plants only comes fromformal miners or those in the process of formalizationunder Peruvian Laws.
• The plants are continuously monitored by thegovernment.
• They are strategically located in desert locations alongthe Peruvian coast in order to minimize itsenvironmental impact.
• Sales reported to the Tax Authority (SUNAT).
• Competition to retain key gold suppliers leads to fastand fair payments and to highly efficient operations.
THE NEED FOR PLANTS
KEY PLAYERS IN THE MARKET
OWNERCAPACITY
TPDLOCATION
Chala/Kori Inca One 450Chala/Yauca
LaytarumaMinera
Laytaruma350 Yauca
Veta Dorada Dynacor 330 Chala
Small Scale Mining Sector
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The Processing Model
Sale and Export
Mineral Delivery
Measure and Test
Purchase and Stockpile
Process Material
Harvest and Smelter
01
02
03
04
05
06
Miner delivers mineral to Chala
One/Kori One plants.
Careful, systematic testing
prior to mineral purchase is done
to determine grade and recovery.
Mineral is purchased at
discount to spot price and
stockpiled.
Gold doré is sold and
exported to Europe.
Carbon is harvested and
gold/silver concentrate is
desorbed, then smelted
into gold doré.
Mineral is processed and gold
inventory turns over approximately
every 3-4 weeks.
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CHALA ONE KORI ONE
Location Arequipa Arequipa
Permitted Operating Capacity
100 TPD 350 TPD
Tonnes Processed 2019 22,941 29,243
Gold Produced 2019 (oz)
12,304 12,546
Average OperatingGrade 2019 (oz/tonne)
0.60 0.50
Tailings
Upgraded and increased tailings
capacity with room for further expansion
Recently upgraded and increased tailings
capacity with room for further expansion
47km betweenChala One and
Kori One
Chala One
Kori One
Processing Facilities
Inca One Ore Collection
Depot
Lima
Note: above production figures are reported here on a calendar basis.
Plant Photos: Chala One & Kori One
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Kori One plant - TanksKori One plant – Ball mills and Crusher circuit
Chala One plant – Ball millsChala One plant – North west view
Operations - Deliveries & Processing
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Mar.19 Apr.19 May.19 Jun.19 Jul.19 Aug.19 Sep.19 Oct.19 Nov.19 Dec. 19 Jan. 20 Feb. 20 Mar. 20
Deliveries 4742 4201 3491 3735 4022 4651 4470 4518 4873 4901 2491 4768 2284
Processing 4917 4238 2912 3774 4056 4129 5090 3986 4533 5147 2942 3188 3521
0
1000
2000
3000
4000
5000
6000
Ton
nes
Monthly Analysis
• Above chart shows consolidated ore deliveries and production (in tonnes) on a calendar basis over trailing 13 months.
• Deliveries in the calendar 2019 were an all time high for the company reaching 52,602 tonnes, averaging 4,384 tonnes per month (t/m), up 16% YOY from 2018 deliveries (45,527 tonnes, average 3,794 t/m).
• Processing in calendar 2019 also reached an all time high of 52,184 tonnes, averaging 4,349 t/m, up 19% YOY from 2018 totals (43,786 tonnes, average 3,649 t/m).
• Daily throughput in calendar 2019 averaged 143 tpd.
• Deliveries and processing dropped in January 2020 due primarily to seasonal delays, but picked up in February 2020, only to slow greatly in March as emergency measures enacted by Peruvian government restricted transportation of material across country due to Covid-19 pandemic.
Operations - Gold Production
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• Above chart shows gold produced (in ounces) over prior 8 calendar quarters on a consolidated basis.
• Production reached all time high in calendar Q4 2018 as additional capacity came online from Koricancha facility, purchased in August 2018.
• Calendar Q1 2019 drop in production a direct result of an extended rainy season directly impacting production and affecting deliveries of mineral throughout Peru lasting into Q2 2019.
• Gold production in calendar Q4 2019 (5,924 oz) decreased 32% YOY from Q4 2018 (8,739 oz) and decreased 9% over prior Q3 2019 (6,532 oz).
• Inca One’s gold production hit an all time high in calendar 2019 producing (24,850 oz) an increase of 42% YOY from calendar 2018 production (22,050 oz).
• Gold production in Q1 2020 impacted by seasonal delays and effects of emergency measures enacted by Peruvian government, restricting transportation of material for processing.
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Gold Produced 4297 6138 8739 7063 5331 6532 5924 5283
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Ou
nce
s
Gold Production
Operations - Sales
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Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Sales (US$M) 3.53 5.65 8.94 11.57 8.41 5.55 10.37 9.85
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00U
SD
Revenue
• Chart above shows gold sales (USD) over prior 8 fiscal quarters on a consolidated basis (note April 30 year end).
• Q1 fiscal 2019 sales growth notable as Chala One surpassed its quarterly production target for the first time.
• Q2 fiscal 2019 sales reflect consolidated revenues generated from both Chala One and Kori One plants.
• Q3 fiscal 2019 sales show strong growth (30% QOQ); Inca One recorded highest quarterly sales to date and first profitable quarter.
• Q4 fiscal 2019 highlights include 138% increase in sales over comparable quarter (Q4 fiscal 2018).
• Fiscal 2019 highlights include $34.6 M annual sales (all time high) over fiscal 2018 ($13.2M), an increase of 162% YOY.
• Gross operating margins of $2.3 M fiscal 2019 as compared to gross operating loss of $0.3 M in fiscal 2018.
Note: above sales figures are as reported in the Company’s financial statements and MD&A with fiscal year end of April 30th.
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Share Structure Share Structure As of July 27, 2020
Issued and Outstanding 32.5 M
Warrants 1.6 M
Options 1.9 M
Fully Diluted 36.1 M
Market Cap $17.3 M
Key People
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Edward Kelly
Kevin Hart
Mark Wright
Ivan Salas
Adrian Morger
Bruce Bragagnolo
Eduardo Paredes
Rodney Stevens
PRESIDENT, CEO AND DIRECTOR
CFO VP OPERATIONSCOUNTRY MANAGER
DIRECTOR PLANTS
CHAIRMAN OF THE BOARD
DIRECTOR DIRECTOR
Over 15 year career in capital markets
managing and running firms in a diverse range of
sectors from natural resource to
technology. Held Senior
Management positions and
directorship with several public
companies on the TSXV Exchange.
Over 20 years of international experience in
finance, administration and
governance for mining companies listed on the TSX
and NYSE. Formerly Corporate
Controller for Asanko Gold Inc.
Trained as a research chemist &
process engineer with experience in
heavy industry, metal purification
and extraction. Fast Moving Consumer
Goods sector expertise in product
research & development,
production, logistics and distribution.
Executive with proven experience in
B2B and business management, with
12+ years of managerial
achievements, directing and
accelerating growth from start-ups
through to transnationals in
Peru, with specific experience in Mining and Energy sectors.
Mining executive, co-founder and former CEO of
Timmins Gold Corp, a Mexican-focused gold producer, and
co-founder and former CEO of
Silvermex Resources Ltd, a silver explorer
acquired by First Majestic Silver in
2011 for a market capitalization of
$120 million.
CFA charter holder with over 10 years experience in the capital markets. While at Salman
Partners, Mr. Stevens was
recognized by Starmine in 2007,
as a top-rated analyst for the
metals and mining industry.
Over 20 years as professional metallurgist
optimizing production of multiple
commodities, including Gold and
Silver. Began career with Barrick (Pierina) overseeing all aspects of plant construction & start up; 15 years
with Newmont (Yanacocha) as Asst
Superintendent overseeing daily ops for plant producing +1M oz gold/year.
European based asset manager with
20+ years experience in the banking industry. Worked as Fund
Manager Alternative Investments at Internationale
Fonds Service AG. In 2009, he founded
Everest Wealth Management AG,
followed in 2015 by Falknis Wealth
Management AG.
Contact Information
Head Office
850 -1140 West Pender St.
Vancouver, BC V6E 4G1
604-568-4877
Peru Office
Calle los tulipanes N°147
Office 503
Urbanización Lima, Polo Hunt
Surco, Lima 33 - Perú
(+51) 1 717-4388 / 4387
Investor Relations
Konstantine Tsakumis
604-568-4877
www.incaone.com