This updated resource estimate includes the assay results from all 72 holes drilled (totalling 22,959 metres) within the A-1 Zone, including the 18 holes drilled in the A-1 Zone (7,579 metres) during the 2012 exploration program that was completed on December 31, 2012.
2013 Resource Estimate Methodology
The updated resource estimate in this news release has been prepared by Gregory Mosher of Tetra Tech. Mr. Mosher is a Qualified Person for the purposes of NI 43-101. The geological interpretation of the A-1 Zone has not been substantially modified from the model used in previous resource estimates: the zone has been modeled as a single geological solid that represents a grade shell that contains gold values generally greater than 0.1 g/t. This grade represents a natural and reasonably sharp boundary between unmineralized and continuously mineralized rock, although minor intervals with a grade of less than 0.1 g/t gold have been incorporated within the solid. These lower-grade intervals were not physically excluded from the geological solid by modification of the boundaries of the solid because it is improbable that they could be effectively segregated during mining and as well, the block model interpolation process accounts for these intervals and they can subsequently be identified and discounted on the basis of grade thresholds applied to the resource tabulation.
During 2012, Lupaka geologists carried out lithological logging of most of the holes that have been drilled in the A-1 Zone. This work enhanced the previous understanding of the geological control of the distribution of gold within the Zone but has not resulted in a modification of the geological model used for resource estimation because gold distribution is not sufficiently constrained by lithology to permit the adoption of a lithological model without significant sacrifice of resource of potential economic significance.
On the basis of the operating costs and cut-off grades used in a number of open pit gold mines in Peru and elsewhere, a lower grade threshold of 0.4 g/t gold is considered reasonable for this type of deposit in this type of location. The resource at this lower limit is considered as the base case and is highlighted in Table 1. Using ordinary kriging and at a lower threshold of 0.4 g/t, the A1 Zone is estimated to contain an Indicated resource of about 31.4 million tonnes with an average, capped grade of 1.01 g/t gold (approximately 1.02 million Troy ounces) and an Inferred resource of about 37.2 million tonnes with an average, capped grade of 1.00 g/t gold (approximately 1.2 million Troy ounces). For the current estimate, the capping level was re-assessed to take into account the additional data acquired, and a capping level of 17 g/t gold continues to be appropriate. Bulk density measurements of three core samples from drill hole CR-01 were made by SGS Analytical Laboratories in Lima. The average bulk density of these three measurements (2.86, 2.82, and 2.93) is 2.87.
Greg Mosher is an employee of Tetra Tech, a "qualified person" as defined by National Instrument 43-101 and independent of Lupaka Gold as defined by Section 1.5 of NI 43-101. He has reviewed and approved the scientific and technical information contained in this news release. Mr. Mosher has verified the technical and scientific information including sampling, analytical and test data underlying the information or opinions contained in this news release. A technical report supporting this disclosure will be filed under the Company's profile on SEDAR (www.sedar.com ) within 45 days of this news release.
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