Inca One Gold Acquires The Koricancha Processing Facility In Peru

VANCOUVER, BC - Inca One Gold Corp. has entered into a definitive purchase agreement to acquire 100% ownership of Anthem United Inc. (Anthem), which owns a 90.14% interest in the 350 tonnes per day (TPD) Koricancha ore processing facility in Peru (Koricancha), from Equinox Gold Corp. for cash and shares totaling approximately $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.

In connection with the Transaction, the 3.5% gold stream currently payable by Koricancha will be terminated and, as a result, production from Koricancha will not be subject to any precious metal streams or royalties thereby maximizing revenues for our shareholders. Additionally, Equinox will be entitled to one seat on the Company's Board of Directors and an equity participation right equal to their ownership so long as they hold in excess of 9.9% of Inca One's outstanding shares. Inca One will also grant Equinox security over the non-interest bearing deferred payments by way of a pledge of the shares of Anthem.

Koricancha is a custom built, fully operational, industrial gold ore processing facility strategically situated in the Arequipa region of Peru.  It is located at sea level, fully serviced by excellent infrastructure just 10 minutes from the Pan American Highway, within the Nazca-Ocona gold belt in Southern Peru.  It is permitted for 350 TPD and currently operating at 150 TPD. In the past six months, the Koricancha plant has produced 10,767 ounces of gold and revenue of US$14.4 million. Koricancha was first commissioned in July 2015 under the ownership of Anthem United Ltd. and achieved commercial production on October 1, 2015.  It has been servicing the small-scale mining sector of Peru for three years and has a stockpile of material currently being processed.  The fully integrated plant features a carbon-in-leach (CIL) gold circuit, and it is a condition of the Transaction that there will be at least US$3 million of existing working capital in place that Inca One will deploy toward ore purchases as required. 

Inca One President and CEO, Edward Kelly, said, "The acquisition of the producing Koricancha Mill is a strategic and transformative acquisition for Inca One.  It instantly elevates the Company from a small producer to a major player among publicly traded gold processing companies.  Inca One significantly increases its permitted capacity and more than doubles our current throughput. The transaction is aligned with our long-term growth objectives and is an important milestone in the consolidation we foresaw in the processing space. We look forward to working with the operating team at Koricancha. We also welcome Equinox as a business partner and significant shareholder in Inca One going forward."

Christian Milau, CEO of Equinox, commented, "We are pleased to partner with Inca One on this transaction. While Koricancha is no longer a core asset for Equinox, it is highly complementary to Inca One's existing operations in Peru and will deliver both increased scale and operating efficiencies. We intend on being a long-term and supportive shareholder of Inca One as their experienced team focuses on establishing the Company as an industry leader in the Peruvian gold milling space."