Vancouver, BC / November 8, 2017 /JMN Wire / Lupaka Gold Corp. ("Lupaka Gold" or the "Company") (TSXV:LPK, FRA:LQP) is pleased to announce that the Company has received US$2,000,000 in proceeds from Tranche 2 of the total US$7,000,000 Pre-Paid Forward Gold Purchase Agreement (the "Agreement") with PLI Huaura Holdings LP ("PLI"). Pursuant to the Agreement, the financing proceeds will be provided by PLI in three tranches: Tranche 1 - US$1,600,000 (received on August 9, 2017, net of related fees); Tranche 2 - US$2,000,000 (received today); and Tranche 3 - US$2,500,000.
Tranche 2 of the Pre-Paid Forward Gold Purchase Agreement
A condition for receipt of Tranche 2 was the registration of the Lacsanga Community Agreement in the Public Registry system in Peru, which was completed on November 6, 2017.
In conjunction with the receipt of Tranche 2, and pursuant to an agreement entered into with Red Cloud Mining dated October 20, 2015 (the "Agent"), the Company will pay cash consideration of 2% of the funds received from PLI and will issue, subject to approval of the TSX Venture Exchange, 263,238 Advisor Warrants at a price of $0.175, exercisable for a period of two years, expiring on November 7, 2019. The value of the Warrants to be issued is equal to 1% of the funds received from PLI, with the exercise price set at 30% above the 5-day VWAP.
The Agent is an Arm's Length party to the Company and is considered an "accredited investor" as such term is defined in National Instrument 45-106. The Warrants and any shares issued pursuant to the exercise of the warrants will be subject to a statutory hold period under Canadian securities laws expiring four months and a day after issue.
Tranche 3 of the Pre-Paid Forward Gold Purchase Agreement
With the perfection of PLI's first priority lien on the Invicta property and registration of the Lacsanga Community Agreement now complete, the only significant conditions precedent remaining to be completed in order to receive Tranche 3 are the requirements to put a mineral offtake agreement in place and to raise an additional US$2,000,000 from other sources. As announced on September 19, 2017 the Company has entered into an agreement to sell the Crucero Gold Project to GoldMining Inc. for total proceeds of approximately $6,000,000 million ($750,000 in cash and 3,500,000 shares of GoldMining). Proceeds from the sale of Crucero will be used to satisfy the requirements of Tranche 3, and to provide additional working capital flexibility as the Company proceeds with the development of the Invicta Gold Project.
Invicta Gold Development Project - the Company's 100%-owned Invicta Gold Development 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 2018 by using third-party mining contractors and utilizing the adit and workings completed by previous owners.
Extraction of mineralized rock will be focused on accessing Invicta's Measured and Indicated resources, which have been estimated to be:
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 350 tpd.
