I've been keeping my eye on this company, could be a good one if they can get their financing in place.
LUPAKA GOLD AMENDS AGREEMENT TO FINANCE INVICTA MINE DEVELOPMENT AND MINING OPERATIONS
VANCOUVER, BRITISH COLUMBIA, May 16, 2017 - Lupaka Gold Corp ("Lupaka Gold" or the "Company") (TSXV:LPK, FRA:LQP) announces that it has executed an amendment (the "Amended Agreement") of the definitive Pre-Paid Forward Gold Purchase Agreement (the "Original Agreement") with PLI Huaura Holdings LP ("PLI"), a limited partnership organized under the laws of British Columbia, previously announced on June 30, 2016. The proceeds from the Amended Agreement will be used to fund the completion of development and initiate production at the Company's Invicta Gold Project ("Invicta"). PLI is an investment vehicle controlled by Pandion Mine Finance ("Pandion").
The gross proceeds (the "Gold Prepayment Amount") to be received will be US$7 Million (originally US$6.1 Million), payable in two tranches of US$4.5 Million ("Tranche 1") and US$2,500,000 ("Tranche 2").
The Company has also signed agreements with Franco Nevada which will facilitate the payout of Franco Nevada's royalty agreements on the Invicta property and allow PLI to obtain a first charge on the Invicta concessions. The Company is working to complete the remaining conditions precedent to Tranche 1, with the primary outstanding condition being the signing and recording of a community agreement supporting road access to the Invicta site. Key conditions precedent to the receipt of Tranche 2 include the perfection of PLI's charge against the Invicta concession and the requirement for the Company to raise US$2 Million in additional capital.
As in the Original Agreement, each tranche will have a grace period of 15 months after which the Company will deliver to PLI a total of 22,500 (originally 19,530) ounces of gold for both tranches over the following 45 months. For the repayment ounces, the Company will receive an amount per ounce of gold equal to the market price at the time, less a fixed discount. After the tranches have been repaid, the Company will have no further obligations under the Agreement. During the term of the Agreement, PLI will also share in the upside on any increase in metal prices.
The Company has the right to buy out and terminate the Amended Agreement at any time. The Company's obligations under the Amended Agreement will be secured by a first charge over the Company's assets.
As previously disclosed in the Company's June 30, 2016 announcement concerning the Original Agreement, the Company will pay finders' fees in connection with this financing, subject to TSX Venture Exchange acceptance.
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
Invicta's approved EIA allows for mine production at 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 La Bambas mine 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
