VANCOUVER, BC, Aug 14, 2015 (Marketwired via COMTEX) —
Lupaka Gold Corp. (“Lupaka Gold” or “the Company”) (LPK)
(bvl:LPK) (frankfurt:LQP) reports performance highlights and
financial results for the six months ended June 30, 2015.
The following is taken from the Company’s Consolidated Financial
Statements and Management’s Discussion and Analysis, both of which
are filed at www.sedar.com.
Overall Performance
The Company’s events of note for the six months ended June 30, 2015
and to date are as follows:
-- The Company announced on April 9, 2015 that it had received approval
from the community of Lacsanga to proceed with development and other
pre-production activities at the Invicta Gold Project which affect their
community;
-- On February 25, 2015, the Company announced that it had been granted a
Certificate of Mining ("COM") permit for mining and development work
activities at the Invicta Gold Project; and
-- The Company announced on February 17, 2015 that its common shares would
be delisted from the Toronto Stock Exchange after the close of trading
that day and immediately listed on the TSX Venture Exchange with no
interruption in trading. The decision to move to TSX.V was made to
reduce the Company's costs of maintaining its listing and for greater
flexibility as the Company pursues its growth strategy;
Lupaka Gold’s common shares trade in Canada on the TSX.V and in Peru
on the Bolsa de Valores de Lima (“BVL”, otherwise known as the Lima
Stock Exchange) under the symbol LPK, and in Germany on the Frankfurt
Exchange (“FRA”) under the symbol LQP.
Outlook
The Company’s immediate priority is to obtain additional capital
financing to sustain its administration and development activities,
including the capital financing needed to commence commercial
operations and generate cash flow from the Invicta Gold Project. With
virtually all of the necessary permits and contractor and community
agreements in hand, management is focused on obtaining the financing
necessary to put the Invicta Gold Project into production as planned.
Additionally, the Company will continue to assess its mineral
exploration and development opportunities for the Crucero Gold
Project and the Josnitoro Gold Project, and conduct related
activities as available cash resources allow.
Financial Highlights
All amounts are in Canadian Dollars unless otherwise stated.
Financial results for the six months ended June 30, 2015 and 2014 are
summarized as follows:
Six months ended
June 30
($000's)
-----------------------
2015 2014
---------- ----------
Operating expenses
Exploration 1,804 1,584
General and administration 603 883
---------- ----------
Operating loss 2,407 2,467
(Gain) impairment loss on available-for-sale
financial asset - 301
Finance income - interest (5) (14)
Foreign exchange loss (gain) 8 (27)
---------- ----------
Loss for the period 2,410 2,727
---------- ----------
Loss per share - Basic and diluted $0.03 $0.03
---------- ----------
Exploration expenses
Following is a summary of project expenditures for the six months
ended June 30, 2015:
----------------------------------------------------------------------------
In thousands of dollars Crucero Invicta Josnitoro Total
------------------------------------
Camp, community relations and related
costs 119 903 - 1,022
Project administration, concession
fees and other 286 368 128 782
-------------------------------------- ------------------------------------
405 1,271 128 1,804
--------------------------------------
Exploration expenses relate to the Peru operations of the Company and
totalled $1,804,000 for 2015, compared to $1,584,000 for 2014, a net
increase of $220,000 for the period, which reflects: increased camp,
community relations and related costs of $1,150,000 for 2015 compared
to $976,000 for 2014, with the increase of $174,000 primarily being a
result of an increase in Invicta pre-construction activities and
Josnitoro community relations costs, offset by an aggregate decrease
in Crucero exploration activities; increased project administration
costs of $652,000 for 2015 compared to $555,000 for 2014, with the
increase of $97,000 primarily being a result of an increase in
Invicta pre-production expenditures incurred, offset by net decreases
in severance of Crucero Gold Project employees and SBC costs; all
offset by a decrease in technical reports, assays, and related costs
to $Nil for 2015 compared to $51,000 for 2014, as no such costs were
incurred.
General and administration expenses – all such expenses relate to the
Canadian operations of Lupaka Gold and totalled $603,000 for 2015
compared to $883,000 for 2014, with the decrease of $280,000 being
mainly the result of decreases in: shareholder and investor relations
(“IR”) expenses to $164,000 for 2015 compared to $280,000 for 2014, a
decrease of $116,000, reflecting IR cost reductions relative to the
first six months of 2014, when there was an investor relations
program focused on the establishment of a European investor presence
in the Company’s shareholder base, and a decrease in IR staffing
costs and other individually insignificant cost decreases totalling
$8,000; professional and regulatory fees to $84,000 for 2015 compared
to $136,000 for 2014, a decrease of $52,000 which reflects a
reduction in corporate legal and Peru listing-related sponsorship
fees, and a decrease in advisory, audit and legal and transfer agent
costs; salaries and benefits totalled $276,000 for 2015 compared to
$327,000, a decrease of $51,000, which reflects a $17,000 higher
allocation of Canada senior management costs to Invicta for 2015 and
reduced SBC expenses for 2015; and reduced office and general, and
travel costs of $61,000 due to reduced office lease and corporate
travel costs.
A snapshot of the Company’s balance sheet is as follows:
Liquidity and Capital Resources
--------------- --------------
June 30, December 31,
In thousands of dollars 2015 2014
----------------------------------------- --------------- --------------
Cash and cash equivalents 43 2,239
Working capital (defined as current
assets less current liabilities) (1,088) 1,242
Total assets 28,648 30,663
Total liabilities 1,640 1,539
Shareholders' equity 27,009 29,124
----------------------------------------------------------------------------
The principal changes in the Company’s cash during the six months
ended June 30, 2015 were as follows:
-- Cash used in operating activities in the six months ended June 30, 2015
was $2,196,000 ($2,723,000 - six months ended June 30, 2014),
principally to fund the Company's loss for the period of $2,410,000
($2,727,000 - six months ended June 30, 2014) which was offset by non-
cash charges including depreciation of $58,000 ($86,000 - six months
ended June 30, 2014) and share-based compensation of $57,000 ($122,000 -
six months ended June 30, 2014), as well as a net increase of $134,000
in non-cash working capital (decrease of $501,000 - six months ended
June 30, 2014). In the six months ended June 30, 2014, there was an
impairment loss of $301,000 recorded on the Company's investment in
Southern Legacy ($Nil - six months ended June 30, 2015).
-- Net cash used in investing activities in the six months ended June 30,
2015 totalled $33,000, compared with net cash from investing activities
of $250,000 in the six months ended June 30, 2014. The Company's
purchases of equipment totalled $33,000 in the six months ended June 30,
2015 ($34,000 - six months ended June 30, 2014) and in the six three
months of 2014, the Company sold equipment for net proceeds of $284,000
($Nil - six months ended June 30, 2015).
Total current liabilities as at June 30, 2015 totalled $1,256,000
($1,159,000 – December 31, 2014), comprised of accounts payable and
accrued liabilities, mostly for community and Invicta project-related
obligations, and $383,000 of provisions for reclamation ($380,000 –
December 31, 2014), the difference being attributable to a change in
foreign exchange rates in 2015.
At present, the Company’s operations do not generate positive cash
flows and its financial success is dependent on management’s ability
to discover economically viable mineral deposits. The mineral
exploration and development processes can take many periods and is
subject to factors that are beyond the Company’s control.
In order to finance the Company’s exploration programs and to cover
administrative and overhead expenses, the Company has typically
raised capital through equity financings. Many factors influence the
Company’s ability to raise funds, including the health of the
resource market, the climate for mineral exploration investment, the
Company’s track record, and the experience and calibre of its
management. Actual funding requirements may vary from those planned
due to a number of factors, including the progress of exploration
activities. Management believes it will be able to raise capital as
required in the long term, but recognizes there will be risks
involved that may be beyond its control.
The Company has implemented various cost-cutting measures, primarily
in the areas of administration, investor relations, project
development and camp and related areas for the Crucero and Josnitoro
Gold Projects. Additionally, management continues to evaluate capital
financing alternatives which are available to fund the estimated US$2
Million of remaining pre-production expenditures needed to put the
Invicta Gold Project into production in 2015.
As at June 30, 2015, the Company’s aggregate common share capital was
$57,360,000 ($57,360,000 – December 31, 2014) representing 92,545,110
issued and outstanding common shares without par value (92,545,110 –
December 31, 2014).
As at June 30, 2015, the Company has 8,372,500 share purchase
warrants outstanding at an exercise price of $0.30 and expiring on
August 7, 2017. During the six months ended June 30, 2015, 612,500
share purchase warrants at an exercise price of $1.87 expired on
February 12, 2015.
As at June 30, 2015, the Company has 7,916,750 stock options
outstanding at exercise prices of $0.13 to $3.22.
About the Company
Lupaka Gold is a Peru-focused gold explorer and developer with
geographic diversification and balance through its interest in
asset-based resource projects spread across three regions of Peru.
Lupaka Gold currently has three projects occupying different stages
of exploration and development.
The Company’s 100%-owned Invicta Gold Project (central Peru) has
near-term underground gold and poly-metallic production potential.
The Company plans to implement a small-scale mining operation and
complete permitting, development and engineering with production to
commence in 2015.
Lupaka Gold’s flagship exploration project is the Crucero Gold
Project, its 5,500 hectare gold property located in southern Peru.
Crucero has a growing indicated and inferred gold resource, and the
Company is actively exploring the property to identify future drill
targets.
In November 2013, the Company optioned the Josnitoro Gold Project
from Hochschild Mining PLC. The project is located approximately 600
kilometres by road southeast of Lima in the Department of Apurimac,
southern Peru. Historical work on the disseminated gold zones
includes over 170 shallow drill holes and extensive surface
trenching.
Forward Looking Information and Regulatory Endnotes
This news release contains “forward-looking statements” and
“forward-looking information” within the meaning of applicable
securities regulations in Canada and the United States (collectively,
“forward-looking information”). The forward-looking information
contained in this news release is made as of the date of this news
release. Except as required under applicable securities legislation,
the Company does not intend, and does not assume any obligation, to
update this forward-looking information. Forward-looking information
includes, but is not limited to, statements with respect to
exploration plans and timing for Crucero, the grant of social license
and exploration plans for Josnitoro, a potential mining operation at
Invicta and estimates of mineral resources. Often, but not always,
forward-looking information can be identified by the use of words
such as “plans”, “expects, “is expected”, “budget”, “scheduled”,
“projects”, “estimates”, forecasts”, “intends”, “anticipates”, or
“believes”, or the negatives thereof or variations of such words and
phrases or statements that certain actions, events or results “may”,
“could”, “would”, “might”, or “will” be taken, occur or be achieved.
The forward-looking information contained in this news release is
based on certain assumptions that the Company believes are
reasonable, including with respect to mineral resource estimates, the
key assumptions and parameters on which such estimates are based,
that that the current price of and demand for gold will be sustained
or will improve, that general business and economic conditions will
not change in a material adverse manner, that financing will be
available if and when needed on reasonable terms, that supplies,
equipment, personnel, permits and local community approvals required
to conduct the Company’s planned exploration and development
activities will be available on reasonable terms, that results of
exploration activities will be consistent with management’s
expectations and that the Company will not experience any material
accident, labour dispute, or failure of equipment. However,
forward-looking information involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking information. Such factors include,
among others, risk that actual results of exploration activities will
be different than anticipated, that cost of labour, equipment or
materials will increase more than expected, that the future price of
gold will decline, that the Canadian dollar will strengthen against
the U.S. dollar, that mineral resources are not as estimated,
unexpected variations in mineral resources, grade or recovery rates,
risk of accidents, labour disputes and other risks generally
associated with mineral exploration and unanticipated delays in
obtaining or failure to obtain community, governmental or regulatory
approvals or financing. Although the Company has attempted to
identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking
information, there may be other factors that cause actions, events or
results to not be as anticipated, estimated or intended. There can be
no assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ materially
from those anticipated in such statements. Readers are cautioned not
to place undue reliance on forward-looking information due to the
inherent uncertainty thereof.
This announcement contains certain forward looking statements,
including such statements within the meaning of Section 27A of the US
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. In particular, such forward looking
statements may relate to matters such as the business, strategy,
investments, production, major projects and their contribution to
expected production and other plans of the Company and its current
goals, assumptions and expectations relating to its future financial
condition, performance and results.
Forward-looking statements include, without limitation, statements
typically containing words such as “intends”, “expects”,
“anticipates”, “targets”, “plans”, “estimates” and words of similar
import. By their nature, forward looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that will or may occur in the future. Actual results,
performance or achievements of the Company may be materially
different from any future results, performance or achievements
expressed or implied by such forward looking statements. Factors that
could cause or contribute to differences between the actual results,
performance or achievements of the Company and current expectations
include, but are not limited to, legislative, fiscal and regulatory
developments, competitive conditions, technological developments,
exchange rate fluctuations and general economic conditions. Past
performance is no guide to future performance and persons needing
advice should consult an independent financial adviser.
The forward looking statements reflect knowledge and information
available at the date of preparation of this announcement. Except as
required by the Listing Rules and applicable law, the Company does
not undertake any obligation to update or change any forward looking
statements to reflect events occurring after the date of this
announcement. Nothing in this announcement should be construed as a
profit forecast.
strongFOR FURTHER INFORMATION PLEASE CONTACT: /strongLupaka Gold Corp. Investor Relations +1 (604) 681-5900 e-mail: gold@lupakagold.com or visit the Company's website at www.lupakagold.com
SOURCE: Lupaka Gold Corp.
mailto:gold@lupakagold.com http://www.lupakagold.com
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