IPR Inca Pacific Resources

Inca Pacific Resources Inc. (TSX VENTURE:IPR) announces that Activos Mineros,
the Peruvian agency responsible for administering the Company's contract with
the Government of Peru ("GOP") has advised the Company that it intends to
withdraw $3M that the Company currently has on deposit as security for its
investment commitments in connection with the Company's Magistral Project.
Activos Mineros claims that the Company did not satisfy its obligation to make
certain investments and minimum levels of expenditure for the 2008 fiscal year
which ended in February 2009. Activos Mineros also asserts that a pre-production
spending guarantee in respect of approximately $24M for the 2009 fiscal year is
required.


During 2008, under its contract with GOP, the Company had the obligation to
invest not less than $12M on certain budgeted activities. With the onset of the
global credit crisis in 2008, the Company modified its planned spending to focus
on engineering and the Environmental and Social Impact Assessment approval
process which was finalized in June 2009. At the same time, the Company applied
to the GOP for an extension to the deadline for bringing the project into
production and a modification to the spending schedule.


Inca Pacific believes that it has honoured its obligations and confirms that it
has spent in excess of the minimum expenditure requirements for the 2008 fiscal
year.


At the same time, the Company is in active negotiations with the GOP to secure
an extension for the deadline for bringing Magistral into production, currently
set at December 31, 2011. The GOP has indicated that it would like the Company
to partner with a party with the financial resources to complete the project and
the Company has been pursuing such an option for some time. In the event the
Company is unable to find such a partner or otherwise satisfy the GOP that such
an extension is warranted, the GOP has the right to require the return of the
central claims constituting the Magistral project without recourse by the
Company. The Company would retain its rights to the surrounding claims that are
necessary for development.


The Company is reviewing its options while continuing to work to resolve the
dispute with Activos Mineros and to bring the negotiations with the GOP to a
satisfactory conclusion.


INCA PACIFIC RESOURCES INC.

James R. Rothwell, President and Chief Executive Officer

Standard & Poor's Listed

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