Inca Pacific pulls long Magistral intercepts (August 31, 2004)

Vancouver – The latest set of assays from Inca Pacific Resources’ (IP-V) drilling on the wholly owned Magistral project, located in the Pallasca Province of the Ancash District of Peru, has delivered impressive copper-molybdenum mineralization.

Active in the project area since the late-1990s, the company has a bankable feasibility study (BFS) underway on Magistral and expects to have a development decision by mid-2006.

The present, initial phase of the BFS is comprised of further surface fieldwork and infill drilling leading to an updated mineral resource estimate and scoping study by late-2004.

Reviewing the Phase 1 program, Inca Pacific President Anthony Floyd stated "We’re well into the program; the plan here is a total of 8,000 metres of drilling in this phase, around 32 drill holes."

The latest series of drill results, targeting the central portion of Magistral and the Chavin sector, have delivered further, significant copper-molybdenum mineralization. Results include:

• Hole PM-92 A 274 metre intercept (from 12 metres) from the central part of the Magistral system returned 0.37% copper and 0.032% molybdenum (0.5% copper equivalent), including 27.5 metres of 1.06% copper and 0.01% molybdenum (1.11 copper equivalent) at the end of the hole;
• Hole PM-93 This hole on the Chavin sector intersected an impressive 407.4 metres (from 8 metres) grading 0.846% copper and 0.081% molybdenum (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), and deeper sections of 70 metres of 1.515% copper equivalent and 103 metres of 1.053% copper equivalent;

Of this latest round of drilling, the three holes in the central portion of the Magistral system all confirmed the central, lower grade core of the porphyry. Meanwhile, the two holes testing the Chavin zone have outlined a potentially large, higher-grade section of the deposit.

Anthony Floyd further stated "Part of this program has been to identify where’s the best mineralization, closest to the surface. That’s why we are pretty happy with a lot of the results that have come out of this program, because there has been a focus on near surface resources, and high-grade in the early years of these kinds of these operations makes a huge difference."

"About 25% of the value of this deposit is in molybdenum, so we’re also greatly encouraged in moly prices staying so strong" continued Floyd.

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

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

Inca Pacific acquired Magistral from the Peruvian Government in late-1998 through 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, who earned a 51% interest by spending US$5.75 million over three years. Inca Pacific reacquired 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 NSR) of 0.5-3%, dependent on metals prices.

Inca Pacific reports 77 million shares outstanding, with the issue recently trading in the 10 per share range.