Lupaka Gold Corp.
TSX : LPK

Lupaka Gold Corp.

January 20, 2012 07:00 ET

Lupaka Gold Acquires Minority Interest and Consolidates 100% Ownership in Crucero Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 20, 2012) - Lupaka Gold Corp. ("Lupaka Gold" or "the Company") (TSX:LPK) announces that it has completed the acquisition of the remaining 40% interest in Minera Pacacorral S.A.C., the Company's Peru subsidiary that holds the Crucero Gold Project. As a result, Lupaka Gold now indirectly owns 100% of the Crucero Gold Project.

The Company acquired the remaining 40% interest in Minera Pacacorral S.A.C. from five Peruvian individuals for a total purchase price of US$4 million in cash and 5.2 million Lupaka common shares at a deemed issue price of US$1.00 per share, for a total purchase price of US$9.2 million. As part of the closing of the acquisition, the Company also made early payment of the final US$3 million installment payment that was required to be paid by July 15, 2012 to complete Lupaka Gold's acquisition of its existing 60% interest in Minera Pacacorral S.A.C.

Eric Edwards, President and CEO of Lupaka Gold commented, "The acquisition of the 40% minority interest in Minera Pacacorral S.A.C. and the consolidation of 100% ownership in the Crucero Gold Project is a major milestone for Lupaka Gold, and we are pleased to now provide 100% of the exploration upside at Crucero to our shareholders. By acquiring the remaining shares of Minera Pacacorral S.A.C., we were able to effectively purchase existing gold resource ounces for less than US$19.00 per ounce, based on 40% of the number of uncapped ounces reported in last February's NI 43-101 updated resource estimate."

Prior to the completion of this transaction the Company held an option to acquire the minority interest in Minera Pacacorral S.A.C. at any time up until July 2015. This option was exercisable by paying a cash purchase price determined by a formula based on the number of ounces of gold resources of the Crucero Gold Project and the gold price at the time of the option exercise.

Mr. Edwards continued, "Instead of relying on our right to exercise the option in the future, we structured this early buyout with a combination of cash and shares that protects our cash position with minimal shareholder dilution. We have also eliminated the risk that the option exercise price would increase due to continued exploration success and resource growth on the Crucero property or as a result of higher future gold prices. In addition, we look forward to the continued participation of our Peruvian partners as shareholders of Lupaka Gold."

Following the closing of the acquisition transaction described above, the Company has cash and cash-equivalent investments on hand of approximately $5.8 million. This amount will allow the Company to fund its 2012 exploration and technical programs and general and administrative activities.

Quality Control and Assurance

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.

About the Company

Lupaka Gold is a Vancouver, British Columbia based company that is aggressively exploring and developing the Crucero Gold Project, its 100% indirectly owned 5,500 hectare gold property located in southern Peru. Since commencing active exploration in April 2010, the Company has most recently reported an updated NI 43-101 compliant gold resource in February 2011 (see the Company's most recent technical report on SEDAR at www.sedar.com). In addition to the existing resource, Lupaka Gold has identified several exploration targets within the Crucero Property that display similar anomalous characteristics. Lupaka Gold is led by a strong management team with the proven ability to develop, finance and operate mining projects. The Company completed an initial public offering of its common shares and warrants on the Toronto Stock Exchange on June 28, 2011.

Forward-Looking Information

This news release includes forward-looking statements or information, including statements relating to the sufficiency and use of cash resources. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that that the Company will be able to obtain the necessary supplies, equipment, personnel, permits and local community approval of drilling plans to conduct its planned exploration and development activities without unforeseen cost increases, that the exchange rates of the U.S., Canadian and Peruvian currencies will be consistent with the Company's expectations and that the Company's exploration and other activities will proceed as expected. However, the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Such risks, uncertainties and other factors include that actual results of exploration activities will be different than anticipated,, that the Company may not be able to obtain the supplies, equipment, personnel, permits and local community approval of drilling plans required to pursue its exploration and development objectives at costs that are consistent with the Company's expectations, changes in exploration programs based upon results of exploration; currency fluctuations; increased costs as a result of changes in project parameters; accidents, effects of weather and other natural phenomena and other risks of the mineral exploration industry; political risks and risks related to community relations and activities of stakeholders. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as required by applicable securities legislation.

Contact Information

  • Lupaka Gold Corp.
    Scott Warren
    Manager, Investor Relations
    +1 (604) 637-8787
    www.lupakagold.com