Inca Pacific Resources Inc.
TSX VENTURE : IPR
BVLAC : IPR

Inca Pacific Resources Inc.
Compania Minera Milpo S.A.A.
BVLAC : MILPOC1

Compania Minera Milpo S.A.A.

September 06, 2011 10:20 ET

Compania Minera Milpo S.A.A. to Acquire Inca Pacific Resources Inc.

VANCOUVER, BRITISH COLUMBIA AND LIMA, PERU--(Marketwire - Sept. 6, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Inca Pacific Resources Inc. (TSX VENTURE:IPR)(BVLAC:IPR) ("Inca Pacific") and Compañía Minera Milpo S.A.A. (BVLAC:MILPOC1) ("MILPO") announce that they have entered into a definitive arrangement agreement (the "Agreement") dated September 5, 2011 with respect to a proposed acquisition by MILPO of all of the issued and outstanding common shares of Inca Pacific (the "Transaction"). The Transaction will be structured as a statutory arrangement under the provisions of the Business Corporations Act (British Columbia).

Transaction Details

Under the terms of the Agreement, shareholders of Inca Pacific will be entitled to receive C$0.61 in cash for each common share (each, a "Share") of Inca Pacific held (the "Consideration"). The Consideration represents a 84.8% premium to the closing price of the Shares on the TSX-V on August 31, 2011, being the last day the Shares traded on the TSX-V prior to the date hereof, and a 132.4% premium to the volume weighted average closing price of the Shares on the TSX-V over the 30 trading days ended August 31, 2011. In addition, holders of options to acquire Shares (each, an "Option") will be entitled to receive a cash payment in respect of each Option held equal to the excess, if any, of C$0.61 over the applicable exercise price of such Option. There are currently 56,647,728 Shares and 1,444,198 Options outstanding. All out-of-the-money Options will be cancelled.

Further details regarding the proposed Transaction shall be provided in a management information circular (the "Circular") which will be mailed to holders of the Shares and Options in connection with the special meeting to approve the Transaction (the "Meeting"). Inca Pacific expects to complete and mail the Circular in the coming weeks and plans to hold the Meeting in late October. The Transaction is expected to close shortly thereafter.

Inca Pacific's officers and directors and certain arm's length holders of Shares, representing in aggregate approximately 25.6% of the votes eligible to be cast by holders of Shares and Options at the Meeting, have entered into a lock-up and support agreement with MILPO whereby they have agreed to vote their Shares and Options in favour of the Transaction.

Closing of the Transaction, as contemplated by the Agreement, is subject to a number of conditions and approvals which include approval of at least 66 2/3% of the votes cast by holders of Shares and Options at the Meeting, court approval of the arrangement and the approval of all relevant regulatory authorities and third parties. Inca Pacific has agreed not to solicit or initiate any discussion regarding any other business combination or sale of material assets. Inca Pacific has also granted MILPO a right to match any superior proposal made by a third party and will pay a termination fee of C$1.25 million to MILPO if the Agreement is terminated in certain events, including if Inca Pacific recommends or approves a competing acquisition proposal or enters into an agreement with a third party with respect to any acquisition proposal.

The board of directors of Inca Pacific has unanimously approved the Transaction and will recommend the Transaction to the holders of Shares and Options in the Circular. The board of directors of Inca Pacific has received an opinion from Raymond James Ltd. that the Transaction is fair, from a financial point of view, to the holders of the Shares.

Any current or future holders of 10% or more of the outstanding Shares may be subject to Peruvian capital gains tax on a disposition of such Shares. Any such persons are advised to consult with their tax advisors.

Blake, Cassels & Graydon LLP, Hernández & Cia and Estudio Grau are acting as legal counsel to Inca Pacific. TD Securities Inc. is acting as financial advisor and McCarthy Tétrault LLP and Estudio Muñiz, Ramirez, Perez-Taiman & Olaya are acting as legal counsel to MILPO.

About Inca Pacific

Inca Pacific is a mineral exploration company with an experienced team dedicated to preserving its rights and investment in a substantial copper/molybdenum exploration project in Peru, seeing the project developed and evaluating additional exploration opportunities in the project's district.

About MILPO

MILPO is a Peruvian mining company headquartered in Lima and listed on the Lima Stock Exchange. The company was founded in 1949 and is controlled by Votorantim Metais Ltda.

MILPO is engaged in the exploration, development, and mining of zinc, copper, lead, silver and gold. It operates four mines in Peru: the El Porvenir and the Atacocha mines, located in Pasco; the Chapi mine, located in Moquegua, and the Cerro Lindo mine, located in Ica. In addition, MILPO operates the Ivan mine and refinery, located in Antofagasta, Chile. Also, MILPO has a strong pipeline of exploration projects at different development stages and is working to expand its operational footprint.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain information contained in this news release, including any information relating to the proposed Transaction and Inca Pacific, may be deemed "forward-looking". All statements in this news release, other than statements of historical fact, that address events or developments that Inca Pacific expects to occur, are considered "forward-looking information". These statements relate to future events and reflect Inca Pacific's expectations regarding the Transaction and the business prospects and opportunities of Inca Pacific. These forward-looking statements reflect Inca Pacific's current internal projections, expectations or beliefs and are based on information currently available to Inca Pacific. In some cases forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", or the negative of those terms or other comparable terminology. Assumptions upon which such forward-looking information (regarding completion of the Transaction) is based include that Inca Pacific and MILPO will be able to satisfy the conditions in the Agreement, that the required approvals will be obtained from the securityholders of Inca Pacific, that all third party regulatory and governmental approvals to the Transaction will be obtained and all other conditions to completion of the Transaction will be satisfied or waived. Although Inca Pacific believes that the forward-looking information contained in this news release is based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. Inca Pacific expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.

This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Inca Pacific Resources Inc.
    Michael Winn
    CEO
    604-687-3727

    MILPO
    Francisco Ismodes Mezzano
    (51-1) 710-5517