Lupaka Reports 9.86 g/t Au-Eq. over 130 m from Underground Sampling Program at the Invicta Gold Project
Lupaka Reports 9.86 g/t Au-Eq. over 130 m from Underground
Sampling Program at the Invicta Gold Project
VANCOUVER, BRITISH COLUMBIA, March 15, 2018 -- Lupaka Gold Corp. (" Lupaka
Gold" or the “ Company") (TSX-V: LPK, FRA: LQP) is pleased to announce the results
from a recent comprehensive and systematic underground sampling program on the 3400
Level at the Company’s 100% owned Invicta Gold Development Project (“Invicta Project”
or “Invicta”).
Highlights:
• Sample assay values over the footwall vein averaged 9.86 grams per tonne
(“g/t”) gold equivalent* (“Au-Eq.”) over 130 metres, with an average width of
6.1 metres
• Sample assay values over the hanging wall split averaged 7.00 g/t Au-Eq.
over 70 metres, with an average width of 6.0 metres
• Average grades are in-line, or higher , than grades within the same area of
the Preliminary Economic Assessment (“PEA”) mine plan
* Au-Eq. calculations are based on US$1250 for gold (“ Au”), US$17.00 for silver (“ Ag”), US$3.00 for copper (“ Cu”),
US$1.25 for zinc (“Zn”), and US$1.05 for lead (“Pb”), with assumed mill recoveries of 85% for Au, 80% for Ag, 82 % for
Cu and Pb, and 77% for Zn.
“These results demonstrate the high-grade, continuous nature of the mineralized system
at Invicta and help validate the expected grade in our mine plan from the 3400 Level. The
average sampled grades are in-line, or higher, than grades within our mine plan, derived
from the PEA. With a combined average width of over 12 metres, the sub-vertical Invicta
Deposit extends for over 130 metres in strike length on the 3400 Level and will be
immediately accessible for extraction when the Invicta mine becomes operational later in
2018.”
Will Ansley, President and CEO of Lupaka
Sampling Program and Results
To better appreciate the grade continuity within mineralized veins at the Invicta Deposit
and to confirm modeled grades within the current Invicta Mineral Resource model, the
Company recently completed a comprehensive underground channel sampling program
over the entire western section of the Atenea vein on the 3400 Level, using a 5-metre
sample spacing interval (Plan shown in Appendix A) . The 2018 program, designed to
augment previous sampling work performed in 2014, commenced at the 2SW cross cut
(on the western side). Channel sampling was performed across each wall (west and east)
as well as over the ceiling on the same plane. Further channel sampling was performed
systematically every additional 5 metres, similar to the mineral resource block model size,
and over both walls within the six-additional cross-cuts (seven in total) end ing on the
eastern wall of the Level.
Polymetallic mineralization within the Atenea Vein on 3400 Level is hosted by structurally-
defined footwall and hanging wall components which were mapped and sampled
separately. Summarized assay sampling results are tabulated in Table 1 with a
summarized and detailed sampling plan provided in Appendix A.
Table 1: Average Sampling Results from 3400 Level Atenea Vein Sampling Program
Atenea Vein Length
Metres
Width
Metres
Au
g/t
Ag
g/t
Cu
%
Pb
%
Zn
%
Au-Eq.
g/t
Footwall Vein 130.0 6.1 5.20 68.69 1.53 1.38 0.97 9.86
Hanging Wall Vein Split 70.0 6.0 2.74 62.18 1.33 1.52 0.86 7.00
Summary results obtained from 331 samples taken in the drift and crosscuts, over spacing
of approximately every 5 metres, are tabulated in Table 2 (Footwall Vein) and Table 3
(Hanging Wall Split).
Table 2: Summary Assays from Atenea 3400 Level – Footwall Vein
Width Au Ag Cu Pb Zn Au-Eq.
Metres g/t g/t % % % g/t
5.00 7.24 8.60 0.33 0.07 0.13 7.99
5.05 4.05 29.43 1.26 0.20 0.50 6.84
4.50 0.35 14.44 0.39 0.15 0.25 1.39
3.20 0.38 32.19 1.05 0.86 4.68 5.73
7.80 8.71 22.21 0.35 0.19 0.61 10.03
8.30 3.19 20.81 0.69 0.12 0.87 5.14
3.00 4.72 5.00 0.17 0.02 0.14 5.16
3.20 2.02 5.00 0.13 0.14 0.43 2.63
2.00 0.49 2.67 0.17 0.08 0.06 0.87
4.20 4.86 41.57 0.82 1.10 2.89 9.03
6.15 2.54 55.30 2.02 0.95 0.44 7.25
2.60 12.48 116.50 2.28 3.24 0.97 19.96
3.60 1.42 53.25 1.18 1.84 0.56 5.33
2.80 11.79 132.57 2.74 0.98 1.91 19.52
9.20 3.76 75.48 1.78 2.00 1.43 9.52
14.40 4.40 99.78 2.35 3.15 0.99 11.75
3.80 6.31 98.05 2.34 2.04 2.03 13.63
3.20 1.08 38.31 1.21 0.47 0.11 3.81
12.70 3.15 88.59 1.65 4.25 1.19 9.97
13.40 1.27 45.94 1.58 1.10 0.63 5.35
5.15 9.21 95.71 1.90 0.36 0.27 13.81
4.80 5.17 74.13 2.17 1.53 1.09 11.06
12.00 11.92 121.17 1.87 1.88 1.08 18.12
9.00 14.72 168.36 1.74 0.76 0.83 20.54
5.70 13.23 110.37 2.17 2.76 1.62 20.59
5.80 5.49 92.91 2.39 1.31 0.95 11.77
5.85 3.23 57.26 1.84 1.38 1.70 8.66
8.00 3.10 74.50 2.31 0.86 1.32 8.98
8.00 1.41 32.96 0.86 0.53 0.39 3.73
3.30 1.37 53.36 0.85 0.33 0.23 3.71
3.20 1.12 40.50 1.44 0.15 0.05 4.04
Weighted Averages 6.1 5.20 68.69 1.53 1.38 0.97 9.86
Length (metres) 130
Table 3: Summary Assays from Atenea 3400 Level – Hanging Wall Split
Width Au Ag Cu Pb Zn Au-Eq.
Metres g/t g/t % % % g/t
3.75 0.41 37.37 1.26 0.78 0.29 3.49 3.00 1.01 99.53 0.99 0.56 0.33 4.37 5.45 2.41 86.65 1.13 0.47 0.48 5.85 10.80 3.06 49.37 1.22 0.89 0.89 6.65 8.00 4.66 58.36 1.66 1.96 0.77 9.58 4.90 2.08 65.51 1.56 4.49 2.09 9.12
Weighted Averages 6.0 2.74 63.18 1.33 1.52 0.86 7.00
Length (metres) 70
Project Background
Lupaka’s Invicta Gold Project is a polymetallic development project located approximately
120 kilometres north of Lima, Peru. A Preliminary Economic Assessment (PEA) was
completed on the project by SRK Consulting (Canada) Inc. March 1, 2018 which evaluated
the economic viability of underground extraction of the Indicated and Inferred Mineral
Resources from the Atenea Vein close to the existing 3,400 Level adit (up to 130 metres
above the 3400 Level) utilizing a sub -level long hole open stoping mining method
supported by initial toll treatment processing options. The PEA has robust economics with
the following highlights:
• Mineral Resource Statement of 3.0 million tonnes of Indicated Mineral
Resources at 5.78 grams per tonne (“g/t”) gold equivalent ounces (“Au-Eq.”)
using a 3. 0 g/t Au-Eq. cut-off, and 0.6 million tonnes of Inferred Mineral
Resources at 5.29 g/t Au-Eq.
• Initial 6-year mine plan (underground) designed on a portion of th e mineral
resource utilizing the existing infrastructure and minimizing capital start-up
costs
• Sub-level open stope mining producing ~ 670,000 minable tonnes at 8.6 g/t
Au-Eq.* with production of ~ 185,000 Au -Eq. oz (within initial 6-year mine
plan)
• Average annual pre-tax cash flows of US$10.2 million, average annual after-
tax cash flow of US$8.2 million
• Annual production of 33,700 Au-Eq. oz, during steady state
• Annual payable metal of 26,700 Au-Eq. oz, during steady state
• All-in Sustaining Costs of US$575 Au -Eq. oz over initial 6 -year mine life,
average annual pre-tax operating profit of US$12.3 million
• Pre-tax 5% NPV of US$53.6 million
• Low capital investment: US$4.3 million in pre -production capital with a
payback of less than one year
The PEA considers only part of the reported Mineral Resource (the Atenea Vein close to
existing infrastructure) with the objective of generating positive cash flow from a low-cost
operation while simultaneously re -investing in and further evaluating the deposit to
potentially expand production in the future.
The PEA is preliminary in nature and includes Inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations applied to
them that would enable them to be categorized as Mineral Reserves, and there is no
certainty that the PEA will be realized.
Quality Control and Assurance
The analyses for this sampling campaign were carried out by ALS, an accredited
laboratory, in Lima, Peru, exercising a thorough Qualit y Assurance and Control program
(QA/QC). As part of QA/QC protocol, duplicates, standards and blanks were inserted into
the sample processing stream. The sample locations were mapp ed, surveyed and
photographed for reference. Individual sample channels vary between 0.2 to 2.5 metres
wide. Samples were bagged, sealed and delivered to the ALS sample preparation facility
in Lima, Peru. Gold was assayed by a 50-gram fire assay and re -assayed for the
overlimits, with an AAS finish. All ALS labs are ISO 9000 registered.
Technical Report
Further information about the PEA and the resource estimate referenced in this news
release, including data verification, key assumptions, parameters, risks and other factors,
will be provided in a technical report prepared following Canadian Securiti es
Administrators’ National Instrument (NI) 43-101 and Form 43 -101F1 guidelines for the
Invicta Project that the Company will file on SEDAR (www.sedar.com) within 45 days from
March 1, 2018.
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 co mmence
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 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.
About SRK Consulting (Canada) Inc.
SRK Consulting (Canada) Inc. form part of the SRK Consulting Group which is an
independent, international consulting company that provides focused advice and solutions
to clients, mainly from earth and water resource industries. Formed in 1974, SRK now
employs more than 1,400 professionals in over 40 offices on 6 continents. Among SRK's
1,500 clients are most of the world's major- and medium-sized metal and industrial mineral
mining houses, exploration companies, banks, petroleum exploration companies,
construction firms and government departments.
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.
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 mills cannot
or will not buy or process mineralized rock from the planned pr oduction 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 ac tions,
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 state ments. 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.
APPENDIX A
Summarized Assay Results from Underground Channel Sampling of the Atenea Vein on
3400 Level, Invicta Gold Mine