Penny stock Inca Minerals (ASX:ICG) will be closing down its operations in Peru after failing to yield any progress with potential partners for its Riqueza project.
The company said on Friday it will now shift its focus back down under.
The Riqueza project, while holding promise for significant mineral deposits – namely copper – has been challenging to sustain due to high operating costs and a complex regulatory environment in Peru, per Inca’s explanation to shareholders.
Despite efforts over the past 18 months to secure funding and joint venture partnerships, no viable options emerged.
Why, exactly, isn’t entirely clear, but it can’t be denied the economy is tough right now no matter where you are.
With ongoing costs outweighing potential benefits and no certainty of finding a funding partner, Inca Minerals has opted to focus its exploration efforts within Australia and manage its expenses more wisely.
Yet another company pivoting towards cost discipline – something which we saw in a litany of 1HFY24 reports from companies far larger and even part of the ASX50.
As part of winding down its operations in Peru, Inca Minerals will be dusting off completely and putting the Riqueza project up for total sale to interested parties.
Discussions with potential buyers have already begun.
Assets such as property, plant, and equipment will be sold to cover wind-up expenses, including compensating consultants and settling outstanding liabilities.
By reducing Inca Minerals’ monthly expenditures and eliminating the largest cost base at its Peruvian operations – the company is now freed up and ready to redirect its exploration activities and focus within Australia.
ICG has been trading at 0.6 cents.