Lupaka Provides Development Update; Commercial Production Expected in Q3/18
Lupaka Provides Development Update; Commercial Production
Expected in Q3/18
VANCOUVER, BRITISH COLUMBIA, April 17, 2018 -- Lupaka Gold Corp. (" Lupaka
Gold" or the “Company") (TSX-V: LPK, FRA: LQP) is pleased to provide a development
update on the Company’s 100% owned Invicta Gold Development Project (“Invicta
Project” or “Invicta”).
Highlights:
• Main access road construction is 65% advanced, completion expected in
May 2018
• Operations team substantially in place, rehabilitation of the 3400 Level
approximately 50% complete
• 3430 Level cross-cut completed, continuity and consistency of hanging wall
split and footwall zones confirmed between 3400 and 3430 Levels
• 8,000 tonnes of mineralized development material to be toll processed in May
• Project remains o n track and on budget, commercial production at 350
tonnes per day (“tpd”) expected to be reached in the third-quarter of 2018
(“Q3/18”)
• Fully financed for the development of Invicta (refer to February 13, 2018 news
release)
“With our operational team now substantially in place, the development and rehabilitation
of Invicta has rapidly advanced and the Company is well positioned to reach commercial
production, at 350 tonnes per day, during the third quarter of 2018. While continuing to
rehabilitate and develop the Invicta mine, 8,000 tonnes of mineralized development
material will be sent for processing and evaluation at regional toll milling facilities in May,
the proceeds of which will offset development costs. The 3430 Level cross-cut has been
completed and the continuity and consistency of the hanging wall and footwall veins has
been confirmed from the 3400 Level up to the 3430 Level. Sublevel preparation for mining
of the footwall vein between the 3400 and 3430 Levels is progressing well. We are
pleased to report that overall, the project remains on time and on budget.”
Will Ansley, President and CEO of Lupaka Gold
Road Construction Progress
Upgrades to the 28 kilometre main access road, from the paved highway to the Invicta
Project, are approximately 65% advanced. The upgrade work includes widening the road
from four meters to approximately six meters, construction of four by-passes to circumvent
communities and difficult portions of the road where numerous switchbacks occurred, the
development of borrow pits to obtain road surfacing materials, improving the road surface
to allow 30 tonne haulage trucks and heavy machinery to travel, and the installation of
berms and drainage ditches. Along with the reduction of traffic within the communities and
increasing the efficiency of hauling, one of the main and most important benefits of these
improvements is increasing safety conditions.
Heavy rainfall, thick fog, and a delay in obtaining the explosives licence initially impeded
road upgrade productivity; approximately 20% of the length of the road requires blasting
prior to removal with excavators. During December and January the advance rate of road
construction was approximately 150 meters per day , however, the current rate is in the
range of 300 meters per day. Depending on precipitation levels, the Company is targeting
completion of the road project in May 2018.
Invicta Development and Rehabilitation Update
Development and rehabilitation work at Invicta is progressing well and the Company
anticipates it will commence production from the 3400 Level at a rate of 350 tpd in Q3/18.
Recruitment of the key operations team personnel was completed in Q1/18 which included
the Director of Operations, Mine Manager, Chief Geologist, Superintendent of Production
& Mine Planning, and other related technical personnel. The operations team is
overseeing and directing the mining and road contractors, as well as preparing the mine
development and production plans. During the second quarter of 2018, the Invicta camp
facilities will be expanded from 65 people to allow for up to 130 persons.
Figure 1 – Invicta Development Plan (3D – Oblique Long Section)
Several enhancements have been made to the initial mine plan as outlined in the March
2018 Preliminary Economic Assessment (“PEA”). As illustrated in Figure 1 above, two
vertical material transport raises originally contemplated in the PEA have been eliminated,
resulting in a savings of approximately US$ 250,000, through the use of draw points on
the 3400 Level. The 3400 Level will be the main haulage level for mineralized material
and a decision has been made to increase the dimension of 120 metres of the 3400 Level
Material
storage
from 3.5 metres (‘m’) wide x 3.0 m high to 4.5 m wide x 4.0 m high in order to allow access
of 30 tonne haulage trucks, which can then haul directly to the processing plant . Small
mineralized material storage chambers will be constructed underground to ensure a
continuous flow of mineralized material from the mine to the plant. Mineralized material
will be loaded into the waiting truck s from the underground stations on 3400 Level and
travel directly to the process plant, thereby eliminating the need to construct and operate
a reloading platform 26 kilometres from the mine . The investment in widening the 3400
Level is budgeted to be approximately US$500,000, however, direct haulage (avoiding the
use of a reload station) will lower future operating costs and payback on the investment is
estimated to be approximately one year . Furthermore, increasing the dimensions and
haulage capacity of the 3400 Level allows Lupaka to m ore easily increase the mines
output in future years above the current plan of 350 tpd.
Other efforts on the 3400 Level includes replacing and enhancing the existing ground
support systems, installation of services, refuge and vehicle bypasses, and a ventilation
system that includes two raises (2.0 m x 2.0 m) which will provide a continuous flow of
fresh air to the 3400, 3430 and future sublevels, as well as providing secondary egress
points. Approximately 90 meters of the required 180 metres has been rehabilitated on the
3400 Level, and development of the first ventilation raise has commenced.
The 3430 Level cross-cut was completed advancing a total of 149 m, intersecting the
hanging wall split at 133 m and the footwall zone at 142 m. Mineralization in both zones
is visually consistent containing coarse grains of chalcopyrite, sphalerite, and galena, with
the mineralization 30 metres below on the 3400 Level.
Evaluation of Toll Milling Facilities
Approximately 8,000 tonnes of mineralized development material will be sent to regional
toll milling facilities for processing in May, at different throughput levels, in order to assess
the suitability and optimal recoveries available from the plant s. Approximately 2,000
tonnes of mineralized development material is currently stockpiled on surface.
Josnitoro Project
The Josnitoro joint venture agreement (“JV”) with Hochschild Mining plc required the
Company to obtain a community agreement for exploration by March 2018. Lupaka was
unable to obtain a community agreement and requests for an extension with Hochschild
were unsuccessful, resulting in termination of the JV . As the focus for the Company
continues to be the advancement of Invicta into production, no significant activities were
performed on the JV, and there were no carrying costs associated with the property.
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 $12 million of capital has been spent by previous owners
on development and infrastructure 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 existing adit and workings. The Invicta project is fully permitted and community
agreements are in place.
The potential underground operation will be focused on underground extraction of
Indicated Mineral Resources and Inferred Mineral Resources from the Atenea vein within
close proximity to the existing 3400 Level adit (up to 130 metres above the 3400 Level).
Invicta’s approved EIA allows for mine production of up to 1,000 tpd, although the current
mining plan is targeting 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”) are based on economic models prepared by the Company in conjunction with
management’s knowledge of the property and the existing estimate of Indicated and
Inferred Mineral Resources on the property , supplemented by the 2018 PEA . 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 constructio n or ongoing
mining operations are m ore difficult or m ore 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.
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 Dan
Kivari, PEng., Director of Operations of the Company, and a Qualified Person as defined
by National Instrument 43 -101. Mr. Kivari has verified the scientific and technical
information, including sampling, analytical and operational data underlying the information
or opinions contained in this news release.
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 s tatements of historical fact, included herein, including, 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 anticip ated 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. 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 repayment of the
PLI Financing 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 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 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 a nd 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 th e 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 ris k 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 streng then 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 minerali zed 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 tho se 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 requi red by applicable securities laws. Investors
should not place undue reliance on forward-looking statements.