VANCOUVER, BRITISH COLUMBIA, October 6, 2016 -- Lupaka Gold Corp ("Lupaka Gold" or the "Company") (TSXV:LPK, FRA:LQP) is pleased to provide an update regarding its three development projects, as follows:
Invicta Gold Project ("Invicta")
Invicta continues to move forward and we anticipate start-up of on-site work shortly. Although the Pre-Paid Forward Gold Purchase Agreement with PLI Huaura Holdings LP was signed on June 30, 2016, the actual receipt of funding has experienced some significant delays due to a number of items such as clarification of tax issues, re-structuring of pre-existing royalty agreements on the Invicta property and the very slow process of formally registering the liens and mortgages required under the financing agreement.
As soon as funding is received, the Company intends to ramp-up to a 350 tonnes per day ("tpd") production rate as soon as reasonable while processing all mineralized material on a contract basis. Once a steady-state 350 tpd production rate is established, expansion potential and a timetable for the construction of Invicta's own processing facility will be developed.
Please also see "Cautionary Note Regarding the Invicta Production Decision" below.
Josnitoro Gold Project ("Josnitoro")
Lupaka Gold is also moving forward with its Josnitoro project, a joint venture with Hochschild Mining.
Company geologists have visited the Josnitoro site and confirmed historical geologic mapping and conducted a limited confirmation sampling program. Company geologists sampled the disseminated gold halo zone, obtaining values of 9 grams gold per tonne ("g/t") at surface, and sampled the central copper skarn zone receiving values of 1.76% copper and 1.2 g/t gold.
Please see the Company's news release dated November 26, 2013 for further information on Josnitoro and the Hochshild Joint Venture.
The Company is now focusing on the core copper/gold skarn zone where the former Josnitoro owner, Minerales del Suroeste S.A., reported high-grade sampling results for copper (of 3 to 9 percent) from samples taken in 2008 from existing mining works and from the sacks of mineral rock accumulated by artisanal miners from a four km long corridor. Currently this area is being mined by local artisanal miners on a small scale of a few hundred tonnes per day. Processors and off-takers for the artisanal miners' mineralized rock report consistent high-grade (of 2 to 5 percent) copper with gold being delivered to two different plants that are processing material from the copper skarn.
Readers are cautioned that the historical sample results and the related reported grades and the sampling, analytical and test data underlying the historical sample results and reported grades have not been verified by the Company. Further, the samples were selectively collected and may not have been subjected to modern quality assurance and quality control measures, and therefore the results may not be representative or reliable.
The Company will be stepping up its exploration of the property after the rainy season ends in early 2017.
Crucero Gold Project ("Crucero")
Crucero contains a pit constrained indicated/inferred resource estimate which is reported below. Geochem and rock samples indicate that additional gold anomalies may be present along strike both north and south of the main zone. Lupaka Gold is currently entertaining joint venture proposals for the Crucero property.
Gordon Ellis, President and CEO commented, "The Company has three good properties, each of which has either a defined resource or ongoing small-scale mining over potentially large deposits." Mr. Ellis further commented that "After a number of years of challenging market conditions to find sufficient funding, we look forward to further exploring and developing these assets at a much accelerated rate in today's improving metals markets."
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 2016 by using third-party mining contractors and utilizing the adit and workings completed by previous owners.
Mining operations 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") gold equivalent, 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 gold equivalent, 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%.
Inferred - 2,534,000 tonnes grading 2.90 g/t gold equivalent for 236,000 contained ozs gold equivalent, from: 131,000 ozs Au grading an average of 1.61 g/t, 979,000 ozs Ag grading at 12.02 g/t, 25,879k lbs Cu grading at 0.46%, 14,891k lbs Pb grading at 0.27% and 9,854k lbs of Zn grading at 0.18%.
The resources are stated at a 1.30 g/t gold equivalent cut‐off contained within potentially economically mineable mineralized solids. 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
Invicta's approved EIA allows for mine production at 1,000 tpd although the current mining plan is limited to 400 tpd.
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 La Arena mine (Tahoe Resources) 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, a 5,500 hectare gold property 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 confirm reasonable prospects of economic extraction as set out in the CIM Definition Standards for Mineral Resources and Mineral Reserves and NI 43-101.
FOR FURTHER INFORMATION PLEASE CONTACT:
Lupaka Gold Corp.
+1 (604) 681-5900
or visit the Company's profile at www.sedar.com or its website at www.lupakagold.com
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. Other than the scientific and technical information regarding Josnitoro which has not been verified as discussed above, 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", and prepared by SRK Consulting (U.S.) Inc., which is available at www.sedar.com under Lupaka Gold Corp's profile.
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 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 preliminary 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.
Quality Control and Assurance
The analysis for Lupaka Gold's assays of surface samples from the Josnitoro Gold Project was carried out by ALS Chemex Laboratories in Lima, Peru, exercising a thorough Quality Assurance and Quality Control program (QA/QC). As part of QA/QC protocol, duplicates, standards and blanks are inserted into the sample processing stream. The sample locations were photographed for reference and logged with field notes and GPS locations. The samples were broken in half, with half kept for hand specimens and half submitted for assay. The assay samples were bagged, sealed and delivered from Lupaka Gold's Lima office to ALS Chemex Laboratory location in Lima, Peru. The remaining hand specimens are kept at the Company's Lima office for reference. Gold was assayed by a 50 gram nominal weight fire assay and the other 41 elements were assayed by ICP-MS methods with aqua regia digestion. ALS Chemex is an accredited laboratory, ISO 9000 registered.
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, a Company owned processing facility, potential mineralization on the properties in which the Company has an interest, the Company's exploration and development plans 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 PLI Financing is consummated on the anticipated terms and the stated timing, 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 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; 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 on the Invicta project 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 Agreement and the risk that PLI Huaura Holdings LP 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.