Expert Trader Samuel Leach: Mythical Peruvian 'El Dorado' May Yet Be Discovered

(Credit: Expert Trader Samuel Leach: Mythical Peruvian 'El Dorado' May Yet Be Discovered) Expert Trader Samuel Leach: Mythical Peruvian 'El Dorado' May Yet Be Discovered
February 23
10:04 AM 2021

Stock and Forex Trader Samuel Leach from Samuel and Co Trading, recognised as one of Yahoo Finance's Top Traders To Follow in 2020, ranked 7th in the Fintech Disruptor Awards (2020) and the subject of "The Real Forex Trader" documentary, had this to say about investing in Gold and Inca One Gold Corp.

American essayist, Ralph Waldo Emerson, once wrote: "The desire of Gold is not for Gold. It is for the means of freedom and benefit". Irrespective of Gold's merits, this statement may well be true. Whilst the world continues to sail through tumultuous socio-economic seas, largely but not exclusively due to the COVID-19 Pandemic and the ramifications of the global response, Gold should continue to be a central part of an investor's portfolio with a view to mitigating the high level of risk in the broader market.

I have written previously that in addition to Gold's traditional mitigating role, there is reason to believe that Gold will increase in value significantly and prove to be a good investment in its own right. Leigh Goehring of Goerhring and Raozencwajg Associates has stated that Gold may rise above $10,000 an ounce in the foreseeable future, after a series of phases in what is currently a bull market. His predicted interim benchmark is $5,000 an ounce. Citi is pointing to $2,500 and US Global Investors leadership are pointing towards $4,000. 

Evidence for these golden predictions is the expected further stimulus packages required to support national economies in the recovery from the COVID-19 pandemic, and that higher levels of inflation are being predicted by a number of commentators arising from the constrained supply and the scope for increased restrictions and regulations. 

Within this context, I have looked in-depth at investment in Gold mining companies, particularly Inca One Gold Corp (TSXV: IO)(OTC: INCAF).

Inca One is a Canadian-based gold producer which operates two processing facilities exporting to the European market. It operates as a royalties enterprise bringing smaller mining undertakings to market.  

Nonetheless, its Chala One and Kore One facilities may prove to be critical in the Peruvian precious metal market. Chala has the capacity to process 150 tons per day, located in a high-grade mining district with a high concentration of small-scale mining operations, with multi-delivery letter of agreement with many. Kore One offers an additional 350 tons per day capacity, with equal operational benefits to its sister Chala One plan, with growth capacity beyond its current operational activity. 

Inca One has supplied healthy stock returns of up to 400% but is arguably still undervalued. After 3 consecutive years of increased production and sales, quarter 4 results indicate year 4 could yet be on the cards, with 3% increased revenue against Q4 2019 and it has processed 11,459 tons, giving an average of 125 tones per day. Inca One is proving to be a leading processor in Peru, itself one of the largest producers of Gold globally. Inca One's operations suit the widespread small-scale Peruvian gold production and has the potential of $150 million per annum in revenue, promising great growth potential with 65% unused plant capacity yet. 

Gold processing has faced increased demand with tens of thousands of new small-scale mining undertakings entering under a 2020 Peruvian formalisation amnesty.  Processing increased 81% from Q3 to Q4 2020 with 11,459 tons processed. 

Inca Gold One Corp has experienced mining leadership in mineral extraction, including Mark St John Wright the VP Operations and New Projects and Kevin Hart as Chief Financial Officer,  which bodes well for robust Corporate Governance within a mineral extraction context. 

I consider further research in Inca Gold One Corp is merited for the following reasons: 

  1. Gold is already trading strongly at $1,825 with expectations of a rally to $2,500 or beyond, powered by stimulus packages and inflationary pressures;

  2. Inca One Gold Corp has posted $100 million of sales in its first 5 years, with three consecutive years of increased production and sales and targeting a fourth;

  3. Inca Gold One Corp is looking to be the largest publicly traded processors in Peru, the 6th largest Gold producing nation, with the approximate capacity for 450 tons output per day;

  4. Inca Gold One Corp operates an innovative royalties company being the delivery mechanism for many of Peru's small-scale mining enterprises. Gold 'Dore' is processed and then sold to European refineries.

Reflecting on these factors, Gold and companies like Inca Gold One Corp are worth a further review - see its website for your own due diligence. 

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