Inca One Announces Extension of Stay Period and DIP Loan Agreement

Rhea-AI Summary

Inca One Gold Corp (TSXV: INCA.H, OTC: INCAF) has announced an extension of its Stay Period under the Companies Creditors Arrangement Act (CCAA) until August 26, 2024. The company has also secured a Debtor-In-Possession Term Loan (DIP Loan) of up to US$1 million for working capital and CCAA-related costs.

The DIP Loan includes two tranches: US$750,000 and US$250,000, with a 5% drawdown fee and 20% annual interest rate. In connection with the loan, Inca One will issue 5 million share purchase warrants at C$0.10 per share, valid for 12 months.

The company's plants are currently on care and maintenance as it prepares to restart operations post-CCAA. Inca One is using this period to restructure existing liabilities and secure new funding, aiming to capitalize on the robust gold price and strengthening precious metals market.

Positive

• Secured DIP Loan of up to US$1 million for working capital and CCAA-related costs
• Extended Stay Period until August 26, 2024, providing more time for restructuring
• Preparing to restart operations post-CCAA proceedings
• Potential to benefit from robust gold prices and strengthening precious metals market

Negative

• Company forced to enter CCAA proceedings, indicating financial distress
• Both plants currently on care and maintenance, not generating revenue
• High interest rate of 20% per annum on the DIP Loan
• Potential dilution for existing shareholders due to issuance of 5 million warrants

Vancouver, British Columbia--(Newsfile Corp. - August 1, 2024) - INCA ONE GOLD CORP. (TSXV: INCA.H) (OTC Pink: INCAF) (FSE: SU92) ("Inca One" or the "Company") announces that, further to the Company's June 4, 2024 and June 14, 2024 press releases, on July 25, 2024 and pursuant to the Companies Creditors Arrangement Act ("CCAA"), the Supreme Court of British Columbia extended the Stay Period under a Second Amended and Restated Initial Order (the "Second ARIO") until August 26, 2024.

DIP Loan

The Second ARIO approved the Company to enter into an interim financing to be provided by a private lender in the form of a Debtor-In-Possession Term Loan ("DIP Loan") for the principal sum of up to US$1 million.

The DIP Loan will be for general working capital, including legal, restructuring, administrative and general corporate costs in connection with the CCAA proceedings and the Court approved cashflows.
The DIP Loan will have priority security ranking over all secured creditors.

The terms of the DIP Loan will allow Inca One to drawdown funds in two tranches, the first in the amount of US$750,000 and the second in the amount of US$250,000. Each tranche is subject to a 5% drawdown fee payable at the time of each drawdown. Interest accrues at a rate of 20% per annum calculated monthly and undrawn amounts are subject to a 2% standby charge, both are payable upon maturity. The maturity date is the earliest of, the date on which the lender demands repayment after the occurrence of an event of default, the implementation of a Court approved Plan of Arrangement and Compromise within the CCAA proceedings, the termination of the CCAA proceedings and November 30, 2024.

In connection with the DIP Loan, the Company will issue an aggregate of 5,000,000 share purchase warrants (the "Warrants") to the lender. Each Warrant entitles the holder to purchase one common share of the Company at an exercise price of C$0.10 for a period of 12 months from the issue date.

Since the Company was forced to enter CCAA, it has made significant efforts to reduce costs. Currently both plants are on care and maintenance and preparing to restart operations once the Company emerges from CCAA proceedings.

With a robust gold price and strengthening precious metals market Inca One is using the time granted by the CCAA process to restructure its existing liabilities and secure a significant new funding package.

Additional information regarding the CCAA proceeding can be found on the Monitor's website at http://cfcanada.fticonsulting.com/incaone.

About Inca One

Inca One Gold Corp is an established gold producer operating two permitted, gold mineral processing facilities in Peru. The Company possesses a combined 450 TPD permitted operating capacity at its two fully integrated plants, Chala One and Kori One, generating over US$200 million in sales from its processing operations. Inca One is led by an experienced and capable management team that has established the Company as a trusted leader in servicing permitted, Artisanal and Small-scale Gold Miners (ASGM). Peru is one of the world's largest producers of gold, and its ASGM sector is estimated by government officials to be valued in the billions of dollars annually. Through the Company's partnerships with the UN backed PlanetGold Program and the Swiss Better Gold Initiative, Inca One supports the sustainable development and mining practices of the ASGM sector and the responsible gold supply chain from mine to market. To learn more, visit www.incaone.com.

Figure 1. Inca One's gold processing facilities in Peru (left: Chala One facility; right: Kori One facility

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2645/218612_c20afeab14e489d8_001full.jpg

On behalf of the Board,

Edward Kelly
President and CEO
Inca One Gold Corp.

For More Information Contact:

Konstantine Tsakumis
ktsakumis@incaone.com
604-568-4877

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/218612

FAQ

What is the current status of Inca One Gold Corp's CCAA proceedings?

Inca One Gold Corp (INCAF) has received an extension of its Stay Period under CCAA until August 26, 2024, and has secured a DIP Loan of up to US$1 million for working capital and CCAA-related costs.

How much is Inca One Gold Corp's (INCAF) new DIP Loan and what are its terms?

Inca One Gold Corp's DIP Loan is for up to US$1 million, with two tranches of US$750,000 and US$250,000. It has a 5% drawdown fee, 20% annual interest rate, and matures by November 30, 2024, or earlier under certain conditions.

What is the current operational status of Inca One Gold Corp's (INCAF) plants?

As of August 1, 2024, Inca One Gold Corp's plants are on care and maintenance. The company is preparing to restart operations once it emerges from CCAA proceedings.

How many warrants is Inca One Gold Corp (INCAF) issuing in connection with the DIP Loan?

Inca One Gold Corp is issuing 5 million share purchase warrants in connection with the DIP Loan. Each warrant allows the purchase of one common share at C$0.10 for 12 months from the issue date.