Lupaka Gold Receives First Tranche Under Amended Invicta Financing Agreement
Lupaka Gold Receives First Tranche Under Amended
Invicta Financing Agreement
Vancouver, British Columbia--(Newsfile Corp. - August 9, 2017) - Lupaka Gold Corp (TSXV: LPK) (FSE: LQP) ("Lupaka Gold"
or the "Company") is pleased to announce that the Company has received Tranche 1 of the US$7,000,000 PLI Financing
Agreement announced in the Company's news release of May 16, 2017. Pursuant to a recent amendment of the PLI Financing
Agreement, the PLI financing proceeds will be provided by PLI in three tranches: Tranche 1 - US$1,600,000 (received, net of
related fees); Tranche 2 - US$2,000,000; and Tranche 3 - US$2,500,000.
With the receipt of Tranche 1, the Company has completed its initial Invicta community payment obligations, has bought back the
Franco Nevada royalties tied to Invicta, and paid the required PLI Financing Agreement-related finders' fees.
Tranche
2
of the PLI Financing
Receipt of Tranche 2 will take place once the Lacsanga Community Agreement is registered in the Public Registry system in
Peru, which is currently in progress.
Tranche
3
of the PLI Financing
With the above-referenced royalty buy-back, Franco Nevada will be terminating its related mortgage security registration against
the Invicta concessions, which will allow PLI to obtain a first charge on the Invicta concessions. The perfection of PLI's first
charge on the Invicta property and the Company raising US$2,000,000 are the only significant conditions precedent remaining
to be completed in order to receive Tranche 3.
"We are pleased to be able to get the Franco Nevada royalty buy-back out of the way and meet our community agreement
obligations", stated Gordon Ellis, CEO. "This will speed up the release of Tranche 3 and assist the Invicta Project to achieve its
objective of production before the end of 2017. We have all of the necessary development, infrastructure and mine upgrade
contracts in place, and we look forward to commencing such work as soon as possible."
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 Gold is a Peru-focused gold explorer and developer with geographic diversification and balance through its interest in
asset-based resource projects spread across three regions of Peru.
Invicta Gold Project
- the Company's 100%-owned Invicta Gold Project is a well-developed, poly-metallic gold-copper
underground deposit located approximately 120 kilometres by road north of Lima.
Management expects to commence
production in 2017 by using third-party mining contractors and utilizing the adit and workings completed by previous owners.
Extraction of mineralized rock would be focused on accessing Invicta's Measured and Indicated resource estimates, which are
comprised of:
Measured - 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 - 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 grading at 0.42%, 45,171k lbs Pb grading at 0.24% and
53,482k lbs of Zn grading at 0.21%.
An Inferred 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 resources are 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 400 tpd.
Cautionary Note Regarding the Invicta Production Decision
The decision to commence 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 mineral 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 rock 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 600 kilometres by road southeast of Lima in the Department of Apurimac, southern Peru, within
which lies the Las Bambas mine (MMG Limited) and the Constancia mine (HudBay Minerals). Historical work on the
disseminated gold zones includes over 170 shallow drill holes and extensive surface trenching, as well as artisanal mining.
Crucero Gold Project
- the Company holds a 100% interest in the Crucero Gold Project located in southern Peru.
Crucero has
an Indicated mineral resource estimate of 1,003,041 ozs Au contained in 30,919,873 tonnes at 1.02 g/t gold (capped) and an
Inferred mineral resource estimate of 1,027,806 ozs Au contained in 31,201,648 tonnes at 1.03 g/t gold (capped).
These
mineral resource estimates have been constrained by a conceptual pit shell in order to support reasonable prospects of
economic extraction as set out in the CIM Definition Standards for Mineral Resources and Mineral Reserves and NI 43-101.
About Pandion Mine Finance
Pandion is the general partner of PLI Huarura Holdings LP and is a mining-focused investment firm backed by MKS PAMP
Group and Ospraie Management, LLC that provides flexible financing solutions to developing mining companies.
FOR FURTHER INFORMATION PLEASE CONTACT:
Gordon L. Ellis, President & C.E.O.
(604) 681-5900
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 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.
Investors are further cautioned that the prices of precious metals can fluctuate in
wide ranges over short periods of time.
The Crucero A-1 mineral resource estimates referred to in this news release are disclosed in the technical report with effective
date January 17, 2013, amended and re-stated October 22, 2013, titled "Technical Report for the Crucero Property, Carabaya
Province, Peru", and prepared by Tetra Tech WEI Inc. and SRK Consulting (Canada) Inc. The Technical Report is available at
www.sedar.com
under Lupaka Gold's profile.
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, including, without
limitation, statements relating to the receipt of and anticipated use of proceeds of the PLI financing, the Company's plans and
intentions for Invicta, the expected benefits from a Company owned processing facility and mineral resource estimates, are
forward-looking statements. Forward-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 payment of the Gold
Prepayment Amount is consummated on the anticipated terms, that 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 Amended Agreement,
that the contemplated Company owned processing facility will, if acquired or constructed, achieve the expected benefits, 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 Invicta 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 expressed 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 the contemplated Company owned processing facility will not be completed or will not achieve
the expected benefits, 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 Amended 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 mills 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 information 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
obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place
undue reliance on forward-looking statements.