Well, it looks like the gold investors are finally waking up. On Wednesday, the GDX had another big day, breaking the most recent downtrend line on high volume. Now this could be just another fluctuation, but we are seeing more and more of these types of moves into mining stocks.
Most people are now realizing that inflation isn’t going to be as easy to handle as the Fed would like us to believe. And with the stock indices teetering on the edge of a cliff right now, where else is there to go but gold and gold mining stocks?
Some might say crypto. But Crypto is still quite inaccessible, not to mention highly confusing, to your average investor. So a vast amount of money will be looking for a place to go, and a lot of it will move into gold stocks.
Now you could just buy gold, but often a better way to invest in precious metals is to buy the companies that profit from higher gold prices. That’s why you might want to take a look at one stock that is uniquely positioned to profit from this exodus from stocks into gold.
The Golden Middle Man
Inca One Gold Corp. (INCAF) is a gold producer that operates two fully integrated gold mineral processing plants in Peru.
With a permitted operating capacity of 450 tonnes per day, Inca One is the largest public gold trading processor in Peru.
Recent Stock Performance
The company’s stock trades on the over-the-counter market under ticker INCAF. The stock’s one-month return at the time of writing was 15.38%, while the stock generated around 11% over the last six months. For the past year, the stock has been ranging between $0.4 and $0.3 per share.
How does Inca One Gold make money?
Miners bring in raw minerals to the company’s Chala One and Kori One plants in Peru. The company purchases ores at a discount from the spot market but only after carefully testing and grading them to determine their value. The stockpile of minerals is then processed to create Gold doré (gold and silver alloy bar), which is then exported to refining companies.
On average, the company turns over its inventory every 3 to 4 weeks. Since its inception in 2015, the company has produced over 100,000 ounces of gold and generated over US$125 million inrevenues. The company produced a record-high 3,648 ounces of gold in December 2021.
Key Recent Developments
In the second quarter of 2022, the company got a non-dilutive gold repayment facility worth $9 million from OCIM Precious Metals AG. The company used $4.6 million of the $6 million first tranche of the facility to purchase gold mill feed. During Q2 2021, ore processing, gold production, gold quantity sold, and revenue, all reported a significant rise. In December 2021, the company got the second tranche of $3 millon of the gold repayment facility, which will be used to purchase gold mill feed for producing more gold.
● The company has a significant growth potential as it has only utilized roughly 35% of its total permitted capacity, which means that 65% of the permitted capacity can still be utilized.
● The company doesn’t have to worry about the environmental impact of its operations as its facilities are located in deserted areas, and it doesn’t have any hazardous impact on the environment.
● The company’s plants and the production methodologies have environmental benefits. For every 95,000 ounces of minerals it processes, it stops over 1 ton of mercury pollution by preventing artisanal miners from processing gold feed using traditional old-fashioned methods.
● The company has access to a virtually stable supply of mineral gold feed as it doesn’t mine the minerals by itself. The company doesn’t have to spend its resources on mining, and the risk of mining is borne by the miners. Also, the higher the amount of cash the company spends, the larger quantity of gold mineral feed it can purchase and increase its gold production. So, the company can increase its production just by injecting more cash to buy the gold ore.
● The company also has an online bullion store where it sells gold coins to retail customers and generates additional profit.
Why Should You Consider Investing In Inca One Gold?
1. The company’s business model supports the local community of miners, is environment friendly, and provides you a steady exposure to gold.
2. The Peruvian mining sector has been growing at over 80% annually since 2011, which provides Inca One with plenty of growth opportunities.
3. The company is currently utilizing only 35% of its total permissible production capacity, which means that if the company is able to resolve cash bottlenecks, it can expand its productions and generate higher revenues.
4. The company has little investment risk as it doesn’t invest in large scale mining projects. While this does limit its capacity to earn huge profits, the downside risk is limited as well.
Investors who want to get exposure to gold can consider investing in small cap gold stock Inca One Gold Corp. Its business model is relatively less risky and is aptly positioned to attain further growth as is evident from its past financial results. The company’s inventory turnover is decent, and, with more capital injection, it can increase its mineral ore feed to produce more gold and generate cash flows for its shareholders.
Please read our full disclaimer by clicking here. Statements regarding the Company which are not historical facts are “forward-looking statements” that involve risks and uncertainties. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements due to factors such as: (i) fluctuation of mineral prices; (ii) a change in market conditions; and (iii) the fact that future operational results may not be accurately predicted based on this limited information to date. Except as required by law, the Company does not intend to update any changes to such statements. Caddy Stocks believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. This article shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state. CaddyStocks.com, is owned by LeadGopher LLC, which is being compensated to conduct investor awareness advertising and marketing campaigns for some of the companies it profiles. This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy and compensation disclosure statement by clicking here.