Inca Pacific pulls long Magistral intercepts (September 13, 2004)

Vancouver — Drill results from the Magistral project in Peru’s Ancash district indicate impressive copper-molybdenum mineralization.

The project is owned by Inca Pacific Resources (IP-V), which has been active in the area since the late 1990s. The company has a bankable feasibility study under way on Magistral and expects to make a development decision by mid-2006.

The present, initial phase of the feasibility is focused on field work and infill drilling. An updated mineral resource estimate and scoping study are planned for late 2004.

“We’re well into the initial phase, which will consist of about eight-thousand metres of drilling, or thirty-two holes,” says Inca Pacific President Anthony Floyd.

The latest results, from the central portion of Magistral and the Chavin sector, show significant copper-molybdenum values. Highlights include the following:

— hole 92 — 274 metres (from 12 metres) grading 0.37% copper and 0.032% molybdenum (0.5% copper-equivalent), including 27.5 metres of 1.06% copper and 0.01% moly (1.11 copper-equivalent);

— hole 93 — 407.4 metres (from 8 metres) of 0.846% copper and 0.081% moly (1.17% copper-equivalent), including a near-surface, higher-grade interval of 136 metres grading 1.07% copper and 0.071% (1.354% copper-equivalent), plus deeper sections of 70 metres at 1.515% copper-equivalent and 103 metres at 1.053% copper-equivalent.

Three holes in the central portion of the Magistral system all confirmed the central, lower-grade core of the porphyry, while the two holes that tested the Chavin zone outlined a potentially large, higher-grade section.

“About twenty-five per cent of the value of this deposit is in molybdenum, so we’re greatly encouraged that moly prices are staying so strong,” says Floyd.

Copper and molybdenum mineralization at Magistral occurs in an overlapping porphyry-skarn environment and is related to a granodiorite intrusive in a sequence of calcareous sediments.

The porphyry mineralization, as characterized in the Chavin zone, is typified by quartz stockworks and some sheeted vein systems, commonly about 100 metres thick, straddling the contact of the intrusive.

Skarn mineralization consists mainly of disseminated-to-veined sulphides (with local semi-massive-to-massive sulphides) consisting of chalcopyrite, pyrrhotite, pyrite, and some moly and magnetite. This style of mineralization is most evident adjacent to steeply dipping intrusive contacts.

Magistral is at the northern end of the Cordillera Blanca mineralized belt, about 160 km northwest of the 500-million-tonne Antamina copper-moly-zinc-silver skarn deposit.

Magistral has a measured and indicated resource of 64 million tonnes grading 0.78% copper, 0.053% moly and 4.2 grams silver per tonne. An additional inferred resource of 42 million tonnes at 0.68% copper, 0.05% moly and 3.6 grams silver has been outlined.

Inca Pacific acquired Magistral from the Peruvian government in late 1998 in an auction of mineral projects. The requirement to spend US$2.1 million and pay US$750,000 by January 2002 has been met. The company had optioned the project to copper producer Anaconda Peru, which earned a 51% interest by spending US$5.75 million over three years. Inca Pacific re-acquired the interest from Anaconda in early 2004 for US$2.1 million. The company has until January 2008 to complete the feasibility study and bring the project to production. The government retains a variable royalty (equating to an net smelter return) of 0.5-3%, dependent on metals prices.

Inca Pacific has 77 million shares outstanding and trades in the 10-per-share range.