Lupaka Gold Corp ("Lupaka Gold" or the "Company")
(TSX:LPK)(LMA:LPK)(FRANKFURT:LQP) is pleased to announce significant progress
toward initiating a small-scale mining operation at the Invicta Gold Project at
an initial planned rate of 300 tonnes per day ("tpd") by the end of Q1-2015.
License and certificate applications
The Company has filed the necessary applications for certificates and licenses
to support underground mining operations at the Invicta Gold Project. The
package of applications was submitted under the existing mining permit, an
Environmental Impact Assessment permit for Mining Operations granted in December
2009 (the "EIA") from the Ministry of Mines & Energy of the Government of Peru
("MEM"). Certificate and license applications include conceptual mine
engineering, mine ventilation, mine safety, haulage of mined mineralized rock,
and other permits. Permits for the purchase, storage and transportation of
explosives have also been filed with the SUCAMEC National Agency.
The Company approached the MEM earlier this quarter to evaluate amending the
existing EIA or apply for a small mine operation permit. The MEM advised the
Company that no amendment is necessary, and that the Company could apply for all
necessary licenses and certificates under the existing EIA to start commercial
operations. Additionally, by utilizing the existing EIA, no additional or new
public workshop or comment period is required. The Company expects that the
necessary certificates and licenses will be received within the next three to
four months, and within the original project schedule of commencing commercial
operations by the end of Q1 2015.
In addition to the EIA, the Invicta Gold Project is also permitted for a power
line, and has a water license and community agreement with Santo Domingo de
Apache (the community that holds the surface rights covering the project), as
well as a closure plan and archeological certificate.
Mining contractor proposals
The Company has received proposals from several underground mining, development
(including mine safety, alternate escapes, and ventilation circuit upgrades),
haulage and road construction contractors. Contractors were invited to bid
depending on specific experience and qualifications, including technical
capability, safety performance, environmental and community responsibility,
availability and other factors. These contractors have conducted all necessary
site visits and have submitted their bids for the project. The decision to
select contractors will be made later this summer with the intent to mobilize
underground contractors in Q3 2014.
Mr. Eric Edwards, Lupaka Gold's CEO, commented that "the Invicta Gold Project
team is making good progress towards commencing a small-scale commercial
production at the Invicta Gold Project and I am confident that our production
timetable will be met."
As reported on March 17, 2014, the Company intends to commence production at an
initial rate of 300 tpd by using the existing 1.2 km of tunnels developed by
previous owners, utilizing contracted third-party mining and a low-cost and
scalable sub-level open stoping mining method, development and haulage, and
selling the mineralized rock to a local mill for processing. Production is
planned to initially target some of the highest grade gold and copper
mineralization within the Atenea Vein, which contains the majority of the
current Invicta gold resource. The Company also intends to pursue further
drilling from underground, concurrent with production, with the objective of
expanding and upgrading the current inferred mineral resources and providing
additional data to guide control and direction decisions for future mining
operations.
The current Invicta resource estimate shows a Measured mineral resource of
131,000 tonnes grading 6.65 grams per tonne ("g/t") gold equivalent for 28,000
contained ounces of gold available from the in-situ development - see Table 1
below. As well, the current Invicta resource shows an Indicated mineral resource
of 8,513,000 tonnes grading 3.43 g/t gold equivalent for 939,000 contained
ounces of gold and an Inferred mineral resource of 2,534,000 tonnes grading 2.90
g/t gold equivalent for 236,000 contained ounces of gold. See Table 1 below and
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. ("SRK Technical Report"), which is available at
www.sedar.com under Lupaka Gold Corp's profile.
Table 1: Invicta Gold Project: Summarized extract from the SRK Technical Report,
detailing the above-mentioned resource estimate
----------------------------------------------------------------------------
Resource Tonnes
Zone Category (000's) Metal Grade
------------------------------------------------
AuEq Au Ag
(g/t) (g/t) (g/t) Cu (%) Pb (%) Zn (%)
----------------------------------------------------------------------------
Total - Measured 131 6.65 4.29 31.71 0.73 0.39 0.38
All Zones Indicated 8,513 3.43 2.09 15.65 0.42 0.24 0.28
M + I 8,644 3.48 2.13 15.90 0.43 0.24 0.29
Inferred 2,534 2.90 1.61 12.02 0.46 0.27 0.18
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Resource Tonnes
Zone Category (000's) Contained Metal (000's)
------------------------------------------------
AuEq Oz Au Oz Ag Oz Cu Lbs Pb Lbs Zn Lbs
----------------------------------------------------------------------------
Total - Measured 131 28 18 133 2,119 1,110 1,105
All Zones Indicated 8,513 939 573 4,285 79,048 45,171 53,482
M + I 8,644 967 591 4,418 81,167 46,281 54,587
Inferred 2,534 236 131 979 25,879 14,891 9,854
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(i)Notes:
-- Mineral Resources are not Mineral Reserves and do not have demonstrated
economic viability. There is no certainty that all or any part of the
Mineral Resources estimate will be converted into a Mineral Reserves
estimate;
-- Resources stated as contained within potentially economically mineable
underground solids stated above a 1.3g/t Au Equivalent cut-off;
-- The resource is 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;
-- Mineral resource tonnage and contained metal have been rounded to
reflect the accuracy of the estimate, and numbers may not add due to
rounding; and
-- Mineral resource tonnage and grade are reported as diluted to reflect a
potentially minable underground selective mining unit of 3.0m.
Measured and Indicated mineral resource mineralization will initially be
targeted by the planned production plan. The mineral resources estimated in the
SRK Technical Report are derived from block models. Table 2 below shows blocks
of mineralization identified by those block models as Measured or Indicated
mineral resource that are immediately accessible from the existing tunnel and
cross-cut work.
Table 2: Invicta Gold Project: Resource Block Model Mineralization Accessible
from Existing Infrastructure
Invicta Elevation Tonnes Width Au Ag Cu Pb
Block Model m T m g/t g/t % %
----------------------------------------------------------------------------
3359 159,751 18.36 6.43 33.25 1.13 0.25
3383 154,010 13.53 5.48 29.74 0.84 0.37
3407 163,812 14.92 5.26 40.89 0.91 0.56
3431 101,200 7.91 5.2 45.31 0.94 0.55
3455 81,431 14.22 4.32 38.45 0.89 0.26
--------------------------------------------------------------
Total 660,204 14.27 5.47 36.82 0.95 0.4
---------------------------------------------------
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The decision to commence production at the Invicta Gold Project and the
Company's plans for a mining operation as disclosed herein (the "Production
Decision and Plans") was 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.
Inferred mineral resources are considered too speculative geologically to have
the economic considerations applied to them that would enable them to be
categorized as mineral reserves.
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.
As of May 31, 2014 Lupaka Gold had cash reserves of $2.2 million, sufficient to
conduct planned exploration work and fund its operations during 2014, excluding
the capital requirements needed to put the Invicta Gold Project into production.
Presently, the Company is evaluating several financing alternatives for
obtaining the Invicta Gold Project's capital funding requirements.
Lupaka Gold currently has three projects occupying different stages of
exploration and development.
The Company's 100% owned Invicta Gold Project (central Peru) has near-term
underground gold and poly-metallic production potential. The Company plans to
implement a small-scale mining operation and complete permitting, development
and engineering with production to commence by the end of Q1-2015.
Lupaka Gold's flagship exploration project is the Crucero Gold Project, its
5,500 hectare gold property located in southern Peru. Crucero has a growing
indicated and inferred gold mineral resource, and the Company is actively
exploring the property to identify future drill targets.
In November 2013, the Company optioned the Josnitoro Gold Project from
Hochschild Mining PLC. The project is located approximately 600 kilometres by
road southeast of Lima in the Department of Apurimac, southern Peru. Historical
work on the disseminated gold zones includes over 170 shallow drill holes and
extensive surface trenching.
As a result of the Company's 2012 acquisition of Andean American Gold Corp., the
Company also holds a strategic 17% stake in Southern Legacy Minerals Inc.
("SLM") (TSX VENTURE:LCY), owner of the AntaKori copper-gold deposit located in
northern Peru. SLM management announced on May 20, 2014 that it has agreed to
merge SLM with Regulus Resources Inc. (TSX VENTURE:REG) - see www.slminerals.com
for additional details.
Qualified Person
The technical information in this document has been reviewed and approved by
Julio Castaneda, MAIG, the President of Lupaka Peru, a Peruvian subsidiary of
the Company, and a Qualified Person as defined by National Instrument 43-101.
Forward Looking Information and Regulatory Endnotes
This news release contains "forward-looking statements" and "forward-looking
information" within the meaning of applicable securities regulations in Canada
and the United States (collectively, "forward-looking information"). The
forward-looking information contained in this news release is made as of the
date of this news release. Except as required under applicable securities
legislation, the Company does not intend, and does not assume any obligation, to
update this forward-looking information. Forward-looking information in this
news release includes all of the plans and expectations described above
regarding initiating mining operations at the Invicta Gold Project (the "planned
production"), including but is not limited to: the timing and cost of completing
pre-production mine development; the mineralizations to be targeted; the
existence of high-grade mineralizations and the depth of any such mineralization
from the existing tunnels on the project; the Company's plans for shipping and
selling mineralized rock from the planned production; all statements regarding
the permits necessary for the planned production and the timing and conditions
of receiving those permits; mining methods to be used for the planned production
and the costs thereof; the date by which the Company expects the planned
production to commence; and all quantities and rates of production.
Forward-looking information also includes statements as to the sufficiency of
current cash reserves to pay for planned exploration and to fund future
operations (including funding needed to put the Invicta Gold Project into
production), as well as estimates of mineral resources. Often, but not always,
forward-looking information can be identified by the use of words such as
"plans", "expects, "is expected", "budget", "scheduled", "projects",
"estimates", forecasts", "intends", "anticipates", or "believes", or the
negatives thereof or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "would", "might", or "will"
be taken, occur or be achieved.
The forward-looking information contained in this news release is based on
certain assumptions that the Company believes are reasonable, including, with
respect to the planned production: that pre-production mine development can be
completed in the time and for the cost projected; that the Company will be able
to fund expenses of the planned production from its current cash reserves; that
mineralizations on the 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; that supplies,
equipment, personnel, permits and local community approvals required to develop
and conduct the planned production will be available on reasonable terms; that
the Company will not experience any material accident, labour dispute, or
failure of equipment. The Company's assumptions with respect to mineral resource
estimates include all of the key assumptions and parameters on which such
estimates are based, as described in the technical report referred to in this
news release. 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; the risk that actual results of
exploration activities will be different than anticipated; 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Lupaka Gold Corp.
Investor Relations
+1 (604) 681-5900
www.lupakagold.com
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