Lupaka Gold (LPK-T) now indirectly owns 100% of the Crucero gold project in southeastern Peru, after buying the remaining 40% stake of a subsidiary that held the deposit for US$9.2 million in cash and stock.
The Vancouver-based company got its hands on the project through Minera Pacacorral S.A.C. It paid its Peruvian subsidiary US$4 million in cash and 5.2 million shares priced at US$1 apiece.
The company’s president and CEO Eric Edwards describes the acquisition of the 40% interest in Minera Pacacorral and the consolidation of 100% ownership in Crucero as a “major milestone” for the company, which became publicly listed last June.
The acquisition allowed the company to buy the project’s existing gold resource for less than US$19 per oz., says Edwards. That figure is based on 40% of the number of uncapped ounces reported in last February’s updated resource estimate.
Crucero’s A-1 zone hosts 786,583 oz. gold in indicated resources from 21.9 million tonnes grading 1.12 grams gold per tonne, if uncapped the grade and gold ounces increase slightly.
It also has 406,773 oz. gold in the inferred category from 13.5 million tonnes grading 0.93 gram gold. Both categories used a cut-off grade of 0.4 gram gold and are capped.
As part of the acquisition, Lupaka has made an early payment of US$3 million to complete the existing 60% acquisition of Minera Pacacorral. It initially had until mid-July 2012 to make that instalment.
After earning the 60% interest, the company had an option to buy the remaining minority stake in the subsidiary by July 2015,
but chose to exercise the option now.
Edwards says the reason for the early buyout was to reduce the risk that the option exercise price would increase due to ongoing exploration success and resource growth at the project or as a result of higher future gold prices.
Following the recent transaction, the company has about $5.8 million in cash and equivalents. This amount should be enough to fund its 2012 exploration and technical programs.
For 2012, Lupaka has an 11,000-metre drill program planned. It completed 9,000 metres of drilling last year.
On the consolidation news, the company’s shares slipped 3.8% to close Jan. 20 at $1.00 per share.
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