3rd May, 2013 - Arequipa, Peru
Inca Peruvian Mining Ltd. has plenty of positive progress to report at both the mine and processing facility from the past 60 days. Having changed the subcontractor responsible for completing the processing plant faster than expected, progress has since been made and it is expected to be ready to start by the second week of May. Attention will then turn to testing, grading and calibration of the equipment, a process which is expected to last two weeks before full production is expected to start by the end of May.
Stockpiles of mineral have been accumulating at the mine where exploration and development work continues, including the extension and widening of galleries, installing ventilation equipment and plans to implement a rail system, is ongoing.
The overall capacity of both the mine and the production plant is being ramped up and the cost of this development should be met from operating cash flow. In addition, preliminary assay results averaging more than 20 grams per ton, continue to suggest that the mineral coming out of the two veins currently being mined is significantly richer than previously forecast. Previous estimates from the 43-101 geology report calculated the reserve using a 7 gram per ton average.
Further good news has come from the level of interest being generated from other independent local mines. The processing plant is the only such facility in southern Peru, the nearest alternative is more than 300km away in Chala. Taking on and processing third party mineral is expected to yield operating margins in excess of 40%. The level of demand being generated provides ample justification for increasing processing capacity to 200 or 300 tons per day from the 40 tons per day expected to come on line at the end of the May.
Management will continue, over the remainder of the year, to exert all necessary effort to ramp up capacity and bring deals with proven mineral content to the processing plant to fully exploit our local monopolistic position to drive up revenue via high operating margins.
This dual earning strategy augurs well for the future of Inca Peruvian Mining Ltd.