Vancouver, British Columbia--(Newsfile Corp. - February 13, 2018) - Lupaka Gold Corp. (TSXV: LPK) (FSE: LQP) ("Lupaka Gold" or the "Company") is pleased to announce that the Company has secured the necessary funding required for development of the Invicta Gold Development Project ("Invicta"). Lupaka has received US$2,500,000 in proceeds from Tranche 3 of the total US$7,000,000 Pre-Paid Forward Gold Purchase Agreement (the "Agreement") with PLI Huaura Holdings LP ("PLI"), as well as approximately US$3,000,000 from the sale of 3.1 million shares in GoldMining Inc. ("GoldMining").
Highlights:
- Proceeds of US$2,500,000 received from Tranche 3 of the Agreement with PLI
- Liquidity further increased by US$3,000,000 from the sale of 3.1 million common shares of GoldMining
- Well-funded with a cash balance of approximately $7.6 million
- Rehabilitation, preparation and development work at Invicta underway and to be completed within the next four months
- Preliminary Economic Assessment on track for completion in the first quarter of 2018 ("Q1 2018")
Will Ansley, President and CEO of Lupaka stated: "With a consolidated cash balance of approximately $7.6 million, along with 400,000 free trading shares of GoldMining, the Company remains well funded to deliver on its objectives of advancing the Invicta Gold Development Project towards potential production in the second half of 2018."
Tranche 3 of the Pre-Paid Forward Gold Purchase Agreement
Pursuant to the Agreement, financing proceeds were 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 November 8, 2017); and Tranche 3 - US$2,500,000 (received today). Lupaka Gold has met the key condition required in order to receive US$2,500,000 in proceeds from Tranche 3 under the PLI Agreement. On November 21, 2017 the Company sold the Crucero Gold Project to GoldMining for cash proceeds of $750,000 and 3.5 million common shares. Lupaka has since sold 3.1 million GoldMining shares for proceeds of approximately US$3,000,000, leaving the Company with a balance of approximately 400,000 shares. In addition, negotiations with offtake traders remain ongoing and are expected to be completed within the next three months, alongside the rehabilitation, preparation and development work at Invicta.
In conjunction with the receipt of Tranche 3, and pursuant to an agreement entered into with Red Cloud Mining (the "Agent") dated October 20, 2015, the Company will pay cash consideration of 2.0% of the funds received from PLI and will issue, subject to approval of the TSX Venture Exchange, 122,787 one common share purchase warrants of the Company ("Advisor Warrant"). Each Advisor Warrant will be exercisable to acquire one common share of Lupaka at an exercise price of C $0.255, exercisable for a period of two years, expiring on February 1, 2020. The value of the Advisor Warrants to be issued is equal to 1.0% of the funds received from PLI, with the exercise price set at 30% above the 5-day volume weighted average price (VWAP). A fee of US$150,000 will also be paid to KLR Group LLC.
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 Advisor Warrants and any shares issued pursuant to the exercise of the Advisor Warrants will be subject to a statutory hold period under Canadian securities laws expiring four months and one day after issue.
Preliminary Economic Assessment Update
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 the Company and PLH S.A.C., Invicta's mining contractor.
