Inca Peruvian Mining Ltd. has invested into a joint venture opportunity with a project in southern Peru which consists of up to a 30% ownership with the joint venture partner. The ownership percentage depends upon the funds raised for the project. This project has history of artisan miners working on the property. The development and extension of an access road on the concession has recently revealed new access points to some veins.
The joint venture partner began processing the mineral in August, 2012. Over the course of operating the mine, we expect production to ramp up significantly.
Investments into the project have been used to improve the site structurally such as roads, tunnels and shafts. We are also looking to improve the processing facilities and incorporate bigger machinery and equipment that will allow mining and production to reach the projected levels.
Initial earth works at the Angostura site commenced in December 2011 and mining production commenced in June 2012 after weather setbacks delayed mining. While our joint venture partner is contracted with a number of local processing plants, located between 50 to 120 miles from the mine, service and reliability issues as well as the cost of transportation have lead to our joint venture partner to build their own processing facility within 15 kilometers of the mine.
Over the course of operating the mine, we are aiming for production to ramp up to several hundred tonnes of ore per day. Production increases have to be aligned with processing capacity and will be phased in over the coming 12-24 months of the project. We currently project that the cost of mining, freight, and processing will be less than 1/3 of the market price per gold ounce upon completion of the new processing plant. This is based on a 6 g/ton mineral; however we have many assays showing higher concentrations, with this in mind, it is quite possible that the costs could be reduced to a 1/4 or less per ounce.
Based on several hundred tons of processed mineral and a dozen assays we expect the mine to average between 6 and 12 grams per tonne. Assays over the past few months have delivered very positive results of between 9 and 23 grams per tonne. Management’s current focus is to overcome the short term delays, production and processing bottlenecks in order to generate returns for investors.
The Angostura mine has a NI 43-101 geology report which has a very positive inferred mineral resource of gold. The recommendation from the report was to continue exploring the mine and selling mineral as we go. This strategy is the most economically viable for this type of project.