Lupaka GOLD Initiates Development of Invicta GOLD Project
LUPAKA GOLD INITIATES DEVELOPMENT OF INVICTA GOLD
PROJECT
VANCOUVER, BRITISH COLUMBIA, January 22, 2018 -- Lupaka Gold Corp. ("Lupaka
Gold" or the “ Company") (TSXV:LPK, FRA:LQP) is pleased to provide an update on
operational advancements associated with the Invicta Gold Development Project
(“Invicta”, or “Invicta Project”).
Highlights:
• Mining contractor selected, mobilization has commenced and expected to take 2-
3 weeks
• Rehabilitation, preparation and initial development of Invicta will commence in
February 2018 with 3 crews, new adit and 3430 Level to be constructed
• Bulk samples to be extracted and sent to toll -milling facilities in order to test and
optimize metallurgical recoveries and concentrate quality
• Road construction resumes after holiday period and is approximately 20%
complete
• PEA on track for completion in the first quarter of 2018 (“Q1 2018”)
Mining Contractor Commences Rehabilitation, Preparation and Development Work
PLH S.A.C. (“ PLH”), the mining contractor selected for the Invicta Project, has
commenced mobilization activities that will take 2-3 weeks to complete. By early February
2018, the Company anticipates PLH will have established three crews at site focused on:
• Rehabilitation of the existing 3400 Level including widening access points,
reinforcing ground support, and the installation of services;
• Driving a new access drift from surface to develop the first sublevel for mining and
a cross-cut at the 3430 Level. This new access point, when connected by the
raise from the 3400 Level, will complete the ventilation circuit and provide a
secondary egress from underground;
• Preparing initial development on the 3430 Level access to the mineralized zone.
Sampling will be performed and cross -referenced with the block model . B ulk
samples will be sent to toll -mill facilities to test and optimize throughput rates,
metallurgical recoveries, and concentrate quality.
The rehabilitation, preparation and initial development activities are expected to be
completed mid-2018.
Road Construction Progress Update
To avoid disruption with local communities over the holiday period, and maintain safety
standards, road construction was temporarily suspended from December 22, 2017 until
January 5, 2018. Progress now continues on three fronts and project is approximately
20% complete. Efforts to date have been primarily focused at the top section of the road
in advance of the rainy season and in constructing bypasses around local communities.
Pictures of the road construction program can be found on our website under the following
link: http://www.lupakagold.com/s/photogallery.asp?ReportID=809914
Preliminary Economic Assessment
Further to the announcement on November 28, 2017, the Company has engaged SRK
Consulting Canada Inc. (“SRK”) as the lead contractor to prepare a Preliminary Economic
Assessment (“PEA”) on Invicta. The PEA remains on track for completion in Q1 2018 and
will be used as a basis for additional development by PLH.
Related Party Transaction
In December 2017, the Company sold 200,000 of its Goldmining Inc. (TSXV: GOLD)
shareholdings, which were received as consideration for the Company’s November 2017
sale of the Crucero Project, to Mr. Will Ansley, CEO of the Company. This transaction was
made in order to take advantage of an allowable, one -time block -sale under the Sale
Purchase Agreement with Goldmining Inc.
The sale of the Goldmining shares is considered to be a "related party transaction" as
defined under Multilateral Instrument 61-101 ("MI 61-101”) because it involves a director
and officer of the Company, Mr. Ansley. The transaction was exempt from the formal
valuation and minority shareholder approval requirements of MI 61-101 in reliance on the
exemptions set forth in sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market
value of the Goldmining shares nor the consideration for the Goldmining shares exceeded
25% of the Company’s market capitalization (as determined in accordance with MI 61 -
101). The Company did not fi le a material change report more than 21 days before the
expected closing of the sale of the Goldmining shares as the details of the sale and the
participation therein by Mr. Ansley were not settled until shortly prior to closing and the
Company wished to close on an expedited basis for sound business reasons.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as the term
is defined in the policies of the TSX Venture Exchange) accepts responsibility for
the adequacy of this news release.
About Lupaka Gold
Lupaka is an active Canadian-based company focused on creating shareholder value
through discoveries and strategic development of its assets in some of the most prolific
mining regions of Peru.
Invicta Gold Development Project – 100% owned, the Company’s flagship project is an
advanced stage gold-copper polymetallic underground deposit located approximately 120
kilometres north of Lima. Over $15 million of capital has been spent by previous owners
on development and infrastructur e at Invicta , and m anagement expects to commence
potential production in the second half of 2018 by using third-party mining contractors and
utilizing the adit and existing workings. The Invicta project is fully permitted and community
agreements are in place.
The potential underground operation will be focused on accessing Invicta’s Measured and
Indicated mineral resources, which was prepared by SRK Consulting (US) Inc. in 2012
estimated as:
Measured mineral resource - 131,000 tonnes grading 6.65 grams per tonne (“g/t”) gold
equivalent for 28,000 contained ounces (“ozs”) of gold, from: 18,000 ozs Au grading at
4.29 g/t, 133,000 ozs Ag grading at 31.71 g/t, 2,119k lbs Cu grading at 0.73%, 1,110k lbs
Pb grading at 0.39% and 1,105k lbs of Zn grading at 0.38%.
Indicated mineral resource - 8,513,000 tonnes grading 3.43 g/t gold equivalent for 939,000
contained ozs of gold, from: 573,000 ozs Au grading at 2.09 g/t, 4,285,000 ozs Ag grading
at 15.65 g/t, 79,048k lbs Cu grad ing at 0.42%, 45,171k lbs Pb grading at 0.24% and
53,482k lbs of Zn grading at 0.21%.
An Inferred mineral resource estimate of 2,534,000 tonnes grading 2.90 g/t gold equivalent
for 236,000 contained ozs of gold has also been established.
The 2012 Mineral Resource Estimate was stated at a 1.30 g/t gold equivalent cut ‐off.
Metal prices assumed for the gold equivalent calculation are US$1,500/oz for gold,
US$32.50/oz for silver, US$3.90/lb for copper, US$1.05/lb for lead and US$1.00/lb for
zinc. The gold equivalent calculation assumes 100% metallurgical recovery, and does not
account for any smelting, transportation or refining charges. See further disclosure
regarding the calculated gold equivalent cut-off grade, as below.
Invicta’s approved EIA allows for mine production of 1,000 tpd, although the current mining
plan is limited to 350 tpd.
Cautionary Note Regarding the Invicta Production Decision
The decision to commence potential production at the Invicta Gold Project and the
Company’s plans for a mining operation as referenced herein (the “Production Decision
and Plans”) were based on economic models prepared by the Company in conjunction
with management’s knowledge of the property and the existing estimate of measured,
indicated and inferred miner al resources on the property. The Production Decision and
Plans were not based on a preliminary economic assessment, a pre-feasibility study or a
feasibility study of mineral reserves demonstrating economic and technical viability.
Accordingly, there is increased uncertainty and economic and technical risks of failure
associated with the Production Decision and Plans, in particular the risk that mineral
grades will be lower than expected, the risk that construction or ongoing mining operations
are more difficult or more expensive than expected, the risk that the Company will not be
able to transport or sell the mineralized material it produces to local custom toll mills on
the terms it expects, or at all; production and economic variables may vary considerably,
due to the absence of a detailed economic and technical analysis according to and in
accordance with NI 43-101.
Josnitoro Gold Project – the Company holds an option to earn a 65% interest on this
project from Hochschild Mining PLC. The project is located approximately 800 kilometres
by road southeast of Lima in the Department of Apurimac, southern Peru, within the
Andahuaylas-Yaury Belt, in which the Las Bambas mine (MMG Limited) and the
Constancia mine (HudBay Minerals) are located. Historical work on the disseminated gold
zones includes over 170 shallow drill holes and extensive surface trenching, as well as
artisanal mining.
FOR FURTHER INFORMATION PLEASE CONTACT:
Will Ansley, President & C.E.O.
Tel: (416) 862-5257
or visit the Company’s profile at www.sedar.com or its website at www.lupakagold.com
Qualified Person
The technical information in this document has been reviewed and approved by Julio
Castañeda Mondragon, MAIG, the President of Lupaka Gold Peru S.A.C. , a Peruvian
subsidiary of the Company, and a Qualified Person as defined by National Instrument 43-
101. Mr. Castañeda has verified the scientific and technical information, including
sampling, analytical and test data underlying the information or opinions contained in this
news release.
The Invicta Gold Project mineral resource estimates referred to in this news release are
disclosed in the technical report dated April 16, 2012, titled "Technical Report on
Resources, Invicta Gold Project, Huaura Province, Peru" (the “Invicta Technical Report”),
and prepared by SRK Consulting (U.S.) Inc., which is available at www.sedar.com under
Lupaka Gold Corp's profile. The metal prices used to calculate the gold equivalent cut-off
grade in the Invicta Technical Report are based on prices at the time. Investors are
cautioned that current metal prices are now lower and as a result, the above -referenced
cut-off grade could be materially affected based on current prices. I nvestors are further
cautioned that the prices of precious metals can fluctuate in wide ranges over short
periods of time.
Cautionary Statements Regarding Forward Looking Information
All statements, trend analysis and other information contained in this press release relative
to anticipated future events or results constitute forward -looking statements. All
statements, other than statements of historical fact, included herein, includin g, without
limitation, statements relating to improvements in the road to the Invicta Project and its
anticipated benefits and the timing of completion of the improvements, the timing of the
commencement of potential production from the Invicta Project and the generation of cash
therefrom, the anticipated methods of production, the receipt of and anticipated use of
proceeds of the PLI Financing, the Company’s plans and intentions for Invicta, mineral
resource estimates , are forward -looking statements. Forwa rd-looking statements are
based on assumptions, estimates and opinions of management at the date the statements
are made that the Company believes are reasonable, including: that the repayment of the
PLI Financing is consummated on the anticipated terms, t hat the supplies, equipment,
personnel, permits, and local community approvals required to conduct the Company's
planned pre-production and development activities will be available on reasonable terms,
that the Company will be able to comply with the delivery and other obligations in the PLI
Financing Agreement, that results of exploration activities will be consistent with
management's expectations and that the Company will not experience any material
accident, labour dispute, or failure of equipment and with respect to the planned mining
operations at Invicta; that pre-production mine development can be completed in the time
and for the cost projected; that the Company will be able to obtain funding for planned
production expenses; that mineralization at I nvicta will be of the grades and in the
locations expected; that the Company will be able to extract and transport mineralized
rock efficiently and sell the mineralized rock at the prices and in the manner and quantities
expected; that permits will be received on the terms and timeline expected and that other
regulatory or permitting issues will not arise; that mining methods can be employed in the
manner and at the costs expected and that such methods yield the results the Company
expects them to. However , forward -looking information involves known and unknown
risks, uncertainties and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performance or achievements e xpressed or implied by the forward -looking information.
Such risks, uncertainties and other factors include, among others: all of the risks
described in this news release; failure of the PLI Financing to complete on the proposed
terms or at all, including due to the Company’s inability to complete the conditions
precedent, the risk that actual results of exploration and development activities will be
different than anticipated; that the Company will not be able to comply with the delivery or
other obligations in the PLI Financing Agreement and the risk that PLI will enforce its
security over the Company’s assets, including its mineral properties; that cost of labour,
equipment or materials will increase more than expected; that the future price of gold will
decline; that the Canadian dollar will strengthen against the U.S. dollar; that mineral
resources are not as estimated; unexpected variations in mineral resources, grade or
recovery rates; risks related to shipping mineralized rock; the risk that local mi lls cannot
or will not buy or process mineralized rock from the planned production for the prices
expected or at all; risk of accidents, labour disputes and other risks generally associated
with mineral exploration; unanticipated delays in obtaining or failure to obtain community,
governmental or regulatory approvals or financing; and all of the risks generally associated
with the development of mining facilities and the operation of a producing mine, as well as
the risks described in the Company’s annual i nformation form, which is available on
SEDAR at www.sedar.com. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to differ materially from those
described in forward-looking information, there may be other factors that cause actions,
events or results to not be as anticipated, estimated or intended. There can be no
assurance that forward-looking information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements. Readers
are cautioned not to place undue reliance on forward -looking information due to the
inherent uncertainty thereof. Lupaka Gold does not undertake any obligatio n to update
forward-looking statements except as required by applicable securities laws. Investors
should not place undue reliance on forward-looking statements.