LUPAKA GOLD RECEIVES FIRST TRANCHE UNDER AMENDED INVICTA FINANCING AGREEMENT
VANCOUVER, BRITISH COLUMBIA, August 9, 2017 - Lupaka Gold Corp ("Lupaka Gold" or the "Company") (TSXV:LPK, FRA:LQP) is pleased to announce that the Company has received Tranche 1 of the US$7,000,000 PLI Financing Agreement announced in the Company's news release of May 16, 2017. Pursuant to a recent amendment of the PLI Financing Agreement, the PLI financing proceeds will be provided by PLI in three tranches: Tranche 1 - US$1,600,000 (received, net of related fees); Tranche 2 - US$2,000,000; and Tranche 3 - US$2,500,000.
With the receipt of Tranche 1, the Company has completed its initial Invicta community payment obligations, has bought back the Franco Nevada royalties tied to Invicta, and paid the required PLI Financing Agreement-related finders' fees.
Tranche 2 of the PLI Financing
Receipt of Tranche 2 will take place once the Lacsanga Community Agreement is registered in the Public Registry system in Peru, which is currently in progress.
Tranche 3 of the PLI Financing
With the above-referenced royalty buy-back, Franco Nevada will be terminating its related mortgage security registration against the Invicta concessions, which will allow PLI to obtain a first charge on the Invicta concessions. The perfection of PLI's first charge on the Invicta property and the Company raising US$2,000,000 are the only significant conditions precedent remaining to be completed in order to receive Tranche 3.
"We are pleased to be able to get the Franco Nevada royalty buy-back out of the way and meet our community agreement obligations", stated Gordon Ellis, CEO. "This will speed up the release of Tranche 3 and assist the Invicta Project to achieve its objective of production before the end of 2017. We have all of the necessary development, infrastructure and mine upgrade contracts in place, and we look forward to commencing such work as soon as possible."
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 2017 by using third-party mining contractors and utilizing the adit and workings completed by previous owners.
Extraction of mineralized rock 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") 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 - 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 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 resources are 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 400 tpd.
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 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.
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 Las Bambas mine (MMG Limited) 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 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 support reasonable prospects of economic extraction as set out in the CIM Definition Standards for Mineral Resources and Mineral Reserves and NI 43-101.
About Pandion Mine Finance
Pandion is the general partner of PLI Huarura Holdings LP and is a mining-focused investment firm backed by MKS PAMP Group and Ospraie Management, LLC that provides flexible financing solutions to developing mining companies.
FOR FURTHER INFORMATION PLEASE CONTACT:
Gordon L. Ellis, President & C.E.O.
(604) 681-5900
or visit the Company's profile at www.sedar.com or its website at www.lupakagold.com
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