- Published: 07 September 2012
- Written by Editor
Lupaka Gold Intercepts 18 Metres at 7.29 g/t Gold and 124 Metres at 1.39 g/t Gold at Crucero Gold Project. Exploration Drilling Commences on Chaska Zone
Lupaka Gold Corp. ("Lupaka Gold" or "the Company") (TSX:LPK) announces that it has received assay results on the first five drill holes completed since the 2012 drilling program commenced on its Crucero Gold Project in southeast Peru.
Holes DDH-54 and DDH-56 have returned some of the highest grades over continuous widths reported to date, including 18 metres at 7.29 gpt gold. DDH-19 contains a significant width of 124 metres at 1.39 gpt gold in the southern portion of the mineralized envelope. The results confirm that the A-1 Zone is continuous and open to the north along strike and at depth.
The Company also reports that exploration drilling has commenced on the Chaska Zone (also known as the A-3, A-4, A-5 Zones) approximately two kilometres to the east of the A-1 resource zone in an area of significant geochemical and geophysical anomalies.
Significant intercepts from four of these first five holes are reported below, and additional results are reported in Table 1 of this news release (all figures are in metres, except Gold grams per ton ("g/t"):
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Total Intersection Gold
Drill Hole Depth From To Intercept g/t
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DDH-19 480.40 22.00 28.00 6.00 2.31
145.00 269.00 124.00 1.39
including 231.00 247.00 16.00 3.07
446.00 456.00 10.00 1.13
DDH-54 320.20 135.00 153.00 18.00 7.29
including 143.00 151.00 8.00 10.13
DDH-55 336.30 326.00 330.00 4.00 3.13
DDH-56 340.00 141.00 164.00 23.00 3.80
including 148.00 160.00 12.00 6.66
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Eric Edwards, President and CEO of Lupaka Gold commented, "The results from holes DDH-54 and DDH-56 are compelling as we have not seen these higher grades over these kinds of significant widths in any of our previous historical drilling."
Mr. Edwards continued, "In DDH-19 we drilled to a depth of 480 metres and found multiple sections of strong mineralization throughout the hole, including 124 metres at 1.39 g/t gold. The recent drilling results suggest that the A-1 Zone deposit may contain higher-grade veins and breccias through the Crucero mineralized envelope."
Summary results are presented in Table 1 for A-1 Zone drill holes numbered 19, 53, 54, 55 and 56. Hole DDH-53 was drilled down dip from DDH-54 and encountered minor sections of mineralization.
The new outline of the A-1 mineralized envelope, along with the drill hole locations and projected to surface, is shown below:
http://media3.marketwire.com/docs/l96m.pdf
The Company currently has two diamond core drill rigs on the A-1 Zone, for the purpose of resource expansion. Additionally, a third diamond drill rig is operating at the Chaska Zone. The drill performance to date, of approximately 3,300 metres in eight holes, has been better than planned. Consequently, the Company is on target to meet its planned 8,000 metres of diamond core drilling for the 2012 drill program.
Status of the Business Combination with Andean American Gold Corp.
On July 16, 2012, the Company and Andean American Gold Corp. ("Andean American") (TSX VENTURE:AAG) entered into a definitive Arrangement Agreement to complete a combination (merger) of the two companies to create a new Peru-focused gold exploration and development company. Under the terms of the business combination, Andean American shareholders will receive 0.245 shares of Lupaka for each share of Andean American owned, resulting in the shareholders of Andean American owning approximately 45.2% of Lupaka upon the completion of the business combination.
Lupaka and Andean American management believe that the business combination will result in significant benefits to the shareholders of each company, including:
-- Creating a Peru-focused gold explorer with combined Measured, Indicated
and Inferred resources;
-- Geographic diversification and balance through an asset base spread
across three regions of Peru, while taking advantage of country-wide
synergies, relationships and expertise;
-- Exploration focus on the potential of the Crucero gold project, with a
view to drive shareholder value through the addition of new estimated
resources and discoveries on 10 additional targets within the project
area;
-- Andean American's Invicta Gold Project has near-term underground gold
and poly-metallic development potential with limited regional
exploration to date, and has the potential to realize value through
development with or without a joint venture or a sale of the project;
-- Exposure to the substantial and prospective AntaKori copper-gold deposit
through a strategic 17% stake in Southern Legacy Minerals Inc.;
-- A platform to pursue further accretive acquisitions; and
-- Complementary on-site management teams and in-country experience
offering relative strengths in exploration, permitting, community
relations and development.
The respective management information circulars for Lupaka and Andean American have been filed on SEDAR and were mailed to respective shareholders on August 28th. Lupaka Gold and Andean American have received conditional approval of the transaction from the TSX and the TSX Venture Exchange, respectively. The shareholders of Lupaka Gold and Andean American will each be asked to approve the transaction at their respective special shareholder meetings to be held September 21, 2012. If the required shareholder, court and regulatory approvals are obtained and the other conditions to completion of the transaction are satisfied, the transaction is expected to close on or about October 1, 2012. Lupaka shareholders are encouraged to read the Lupaka information circular dated August 22, 2012 for additional details.
The boards of directors of both Lupaka and Andean American have determined that the proposed business combination is in the best interests of their respective companies, based on a number of factors, including a fairness opinion received from their respective financial advisor, the details of which are provided in the management information circulars sent to shareholders of Lupaka and Andean. Each company's board of directors unanimously approved the terms of the proposed business combination and has recommended that their respective shareholders vote in favour of the transaction.
About the Company
Lupaka Gold is aggressively exploring and developing the Crucero Gold Project, its 5,500 hectare gold property located in southern Peru. The Company, based in Vancouver, Canada, is project operator and holds a 100% indirect interest in the property. Since commencing active exploration in April 2010, the Company has reported NI 43-101 compliant gold resource estimate updates in the first quarter of 2011 and 2012 (see the Company's most recent technical report on sedar.com). In addition to the existing resource estimate, Lupaka Gold has identified a number of exploration targets within the Crucero Project that display similar anomalous characteristics.
Quality Control and Assurance
The analyses for this drilling campaign were carried out by SGS in Lima, Peru, exercising a thorough Quality Control and Assurance program (QA/QC). As part of QA/QC protocol, duplicates, standards and blanks were inserted into the sample processing stream. The core was photographed for reference, logged and mineralized sections were sawed in half. Sample lengths vary between 0.5 to 2.0 metres. Half core samples were bagged, sealed and delivered to SGS offices in Juliaca, Peru, an accredited laboratory. The remaining core is stored at the company's warehouse in Arequipa for reference. Gold was assayed by a 50 gram fire assay with an AAS finish. All SGS labs are ISO 9000 registered.
William Burstow, Lupaka Gold's consulting geologist and a "qualified person" as defined by National Instrument 43-101, has reviewed and approved the scientific and technical information contained in this news release, and has verified the data disclosed in this news release, including sampling, analytical and test data underlying the information or opinions contained in this news release.
Forward-Looking Information
This news release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable securities regulations in Canada and the United States (collectively, "forward-looking information"). The forward-looking information contained in this news release is made as of the date of this news release. Except as required under applicable securities legislation, the Company does not intend, and does not assume any obligation, to update this forward-looking information. Forward-looking information includes, but is not limited to, statements with respect to mineral resource estimates, the 2012 Crucero Project Drill Program, the anticipated effect of completed drill results on the Crucero Gold Project, planned work programs, future upgrading of mineral resources and expected outcomes, and a business combination with Andean American Gold Corp. (the "Business Combination") Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects, "is expected", "budget", "scheduled", "estimates", forecasts", "intends", "anticipates", or "believes", or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will" be taken, occur or be achieved.
The forward-looking information contained in this news release is based on certain assumptions that the Company believes are reasonable, including, with respect to mineral resource estimates, the key assumptions and parameters on which such estimates are based, that the current price of and demand for gold will be sustained or will improve, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed on reasonable terms, that supplies, equipment, personnel, permits and local community approvals required to conduct the Company's planned exploration and development activities will be available on reasonable terms, that results of exploration activities will be consistent with management's expectations, that the Company will not experience any material accident, labour dispute, or failure of equipment, that the Business Combination will be approved by the shareholders of Lupaka Gold and Andean American and that the companies will receive all necessary judicial and regulatory approvals to complete the Business Combination.
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 factors include, among others, risk that actual results of exploration activities will be different than anticipated, 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, risk of accidents, labour disputes and other risks generally associated with mineral exploration and unanticipated delays in obtaining or failure to obtain community, governmental, judicial, regulatory or shareholder approvals, or financing. 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.
Table 1
Crucero Gold Project
A-1 Zone Drill Results
------------------------------------------------------------------------
Total
Depth From To Intercept Gold
Metres Metres Metres Metres g/t
------------------------------------------------------------------------
DDH-19 480.40 22.00 28.00 6.00 2.31
66.00 72.00 6.00 0.98
145.00 269.00 124.00 1.39
including 143.00 178.00 35.00 1.50
including 200.00 250.00 50.00 1.95
including 256.00 269.00 13.00 1.30
357.00 377.00 20.00 0.83
including 372.00 376.00 4.00 1.50
409.00 412.00 3.00 1.14
417.00 420.00 3.00 1.51
446.00 456.00 10.00 1.13
DDH-53 351.00 276.00 278.00 2.00 1.57
320.00 323.00 3.00 0.91
DDH-54 320.20 135.00 153.00 18.00 7.29
including 143.00 151.00 8.00 10.13
157.00 158.00 1.00 1.14
DDH-55 336.30 267.00 271.00 4.00 1.16
326.00 330.00 4.00 3.13
DDH-56 340.00 141.00 164.00 23.00 3.80
Including 148.00 160.00 12.00 6.66
------------------------------------------------------------------------
Hole Locations
East North Elevation Azimuth Inclination
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DDH-19 410828.7 8432888.7 4,453.8 59 degrees - 60 degrees
DDH-53 410678.9 8433430.2 4,414.0 236 degrees - 60 degrees
DDH-54 410678.3 8433429.9 4,414.0 236 degrees - 45 degrees
DDH-55 410664.2 8433459.4 4,411.8 236 degrees - 60 degrees
DDH-56 410664.2 8433459.4 4,411.8 236 degrees - 45 degrees
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(i) The Company does not have sufficient geological data to determine true
widths of the intercepts
Contacts:
Lupaka Gold Corp.
Scott Warren
Manager, Investor Relations
+1 (604) 681-5900
www.lupakagold.com
