VANCOUVER, Jan. 22, 2018 /CNW/ - Lupaka Gold Corp.
("Lupaka Gold" or the "Company") (TSXV:LPK, FRA:LQP)
is pleased to provide an update on operational advancements
associated with the Invicta Gold Development Project
("Invicta", or "Invicta Project").
Highlights:
- Mining contractor selected, mobilization has commenced and
expected to take 2-3 weeks
- Rehabilitation, preparation and initial development of Invicta
will commence in February 2018 with 3
crews, new adit and 3430 Level to be constructed
- Bulk samples to be extracted and sent to toll-milling
facilities in order to test and optimize metallurgical recoveries
and concentrate quality
- Road construction resumes after holiday period and is
approximately 20% complete
- PEA on track for completion in the first quarter of 2018
("Q1 2018")
Mining Contractor Commences Rehabilitation, Preparation and
Development Work
PLH S.A.C. ("PLH"), the mining contractor selected for
the Invicta Project, has commenced mobilization activities that
will take 2-3 weeks to complete. By early February 2018, the Company anticipates PLH will
have established three crews at site focused on:
- Rehabilitation of the existing 3400 Level including widening
access points, reinforcing ground support, and the installation of
services;
- Driving a new access drift from surface to develop the first
sublevel for mining and a cross-cut at the 3430 Level. This new
access point, when connected by the raise from the 3400 Level, will
complete the ventilation circuit and provide a secondary egress
from underground;
- Preparing initial development on the 3430 Level access to the
mineralized zone. Sampling will be performed and cross-referenced
with the block model. Bulk samples will be sent to toll-mill
facilities to test and optimize throughput rates, metallurgical
recoveries, and concentrate quality.
The rehabilitation, preparation and initial development
activities are expected to be completed mid-2018.
Road Construction Progress Update
To avoid disruption with local communities over the holiday
period, and maintain safety standards, road construction was
temporarily suspended from December 22,
2017 until January 5,
2018. Progress now continues on three fronts and project is
approximately 20% complete. Efforts to date have been
primarily focused at the top section of the road in advance of the
rainy season and in constructing bypasses around local
communities.
Pictures of the road construction program can be found on our
website under the following link:
http://www.lupakagold.com/s/photogallery.asp?ReportID=809914
Preliminary Economic Assessment
Further to the announcement on November
28, 2017, the Company has engaged SRK Consulting Canada Inc.
("SRK") as the lead contractor to prepare a Preliminary
Economic Assessment ("PEA") on Invicta. The PEA
remains on track for completion in Q1 2018 and will be used as a
basis for additional development by PLH.
Related Party Transaction
In December 2017, the Company sold
200,000 of its Goldmining Inc. (TSXV: GOLD) shareholdings, which
were received as consideration for the Company's November 2017 sale of the Crucero Project, to Mr.
Will Ansley, CEO of the Company.
This transaction was made in order to take advantage of an
allowable, one-time block-sale under the Sale Purchase Agreement
with Goldmining Inc.
The sale of the Goldmining shares is considered to be a "related
party transaction" as defined under Multilateral Instrument 61-101
("MI 61-101") because it involves a director and officer of the
Company, Mr. Ansley. The transaction was exempt from the
formal valuation and minority shareholder approval requirements of
MI 61-101 in reliance on the exemptions set forth in sections
5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value
of the Goldmining shares nor the consideration for the Goldmining
shares exceeded 25% of the Company's market capitalization (as
determined in accordance with MI 61-101). The Company did not
file a material change report more than 21 days before the expected
closing of the sale of the Goldmining shares as the details of the
sale and the participation therein by Mr. Ansley were not settled
until shortly prior to closing and the Company wished to close on
an expedited basis for sound business reasons.
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 $15
million of capital has been spent by previous owners on
development and infrastructure at Invicta, and management expects
to commence potential production in the second half of 2018 by
using third-party mining contractors and utilizing the adit and
existing workings. The Invicta project is fully permitted and
community agreements are in place.
The potential underground operation will be focused on accessing
Invicta's Measured and Indicated mineral resources, which was
prepared by SRK Consulting (US) Inc. in 2012 estimated as:
Measured mineral resource - 131,000 tonnes grading 6.65 grams
per tonne ("g/t") gold equivalent for 28,000 contained ounces
("ozs") of gold, 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 mineral resource - 8,513,000 tonnes grading 3.43 g/t
gold equivalent for 939,000 contained ozs of gold, 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%.
An Inferred mineral resource estimate of 2,534,000 tonnes
grading 2.90 g/t gold equivalent for 236,000 contained ozs of gold
has also been established.
The 2012 Mineral Resource Estimate was stated at a 1.30 g/t gold
equivalent cut‐off. 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. See
further disclosure regarding the calculated gold equivalent cut-off
grade, as below.
Invicta's approved EIA allows for mine production of 1,000 tpd,
although the current mining plan is limited to 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") were based on economic models prepared by the Company
in conjunction with management's knowledge of the property and the
existing 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
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.
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.
The Invicta Gold Project mineral 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" (the "Invicta Technical
Report"), and prepared by SRK Consulting (U.S.) Inc., which is
available at www.sedar.com under Lupaka Gold Corp's profile. The
metal prices used to calculate the gold equivalent cut-off grade in
the Invicta Technical Report are based on prices at the
time. Investors are cautioned that current metal prices
are now lower and as a result, the above-referenced cut-off grade
could be materially affected based on current prices.
Investors are further cautioned that the prices of
precious metals can fluctuate in wide ranges over short
periods of time.
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
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. 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 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 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 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.
SOURCE Lupaka Gold Corp.