Inca Pacific Resources Inc.
TSX VENTURE : IPR

Inca Pacific Resources Inc.

November 08, 2005 08:30 ET

Inca Pacific Enters into New Agreement with Rio Tinto & Barrick on Antoro Sur

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 8, 2005) - In May 2002, Inca Pacific Resources Inc. (TSX VENTURE:IPR) ("Inca Pacific") entered into an option to purchase the Antoro Sur Copper-Gold project in Central Peru from Rio Tinto Mining and Exploration Limited ("Rio Tinto") and Minera ABX Exploraciones S.A. ("Barrick"). Under the terms of that agreement Inca Pacific could purchase 100% of the Antoro Sur property in consideration of cash payments of US $1,500,000 and work commitments of US $3,000,000 including 11,500 metres of drilling over four years.

On November 3, 2005, Inca Pacific, Rio Tinto and Barrick agreed to modify these terms and enter into a new agreement. The new agreement grants Inca Pacific an exclusive option until March 31, 2006 to acquire 100% of Rio Tinto and Barrick interests in Antoro Sur in consideration of the following payments: a) US $1,400,000 payable as to US$100,000 on November 29th 2005, b) US$1,300,000 on March 31st 2006 and a net smelter return (NSR) royalty on all sales of mineral products from Antoro Sur, payable at 2% NSR in respect of those mineral rights for which there is no other private royalty burden and payable at 1% NSR in respect of those mineral rights for which there is another private royalty burden. In addition, upon exercise of the option, Rio Tinto and Barrick will grant Inca Pacific the right to purchase their NSR royalties at any time for the sum of US$700,000. This new agreement does not contain any work or drilling commitments.

The Antoro Sur property is located in central Peru, approximately 230 km southeast of Lima and 11 km northwest of Huancavelica. Drilling by Inca Pacific in 2003 and 2004 has identified well developed near surface copper and gold mineralization. The drilling has provided evidence of a partially intact, partially eroded secondarily enriched copper "blanket" in a polygonal area at least 900 metres wide and 1050 metres long. The majority of holes drilled to date have intersected copper grades exceeding 0.75% over thicknesses of 10 metres or more. Copper "leachability" tests on samples from the 2004 drill program indicated that solubility of copper ranges from 25% to 94%, with an overall average of about 70%.

INCA PACIFIC RESOURCES INC.

Anthony Floyd, President and Director

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