We met with Darryl Jones, CFO of Lupaka Gold (LPK.V) in Vancouver for an update on its plans to bring the Invicta Gold Project into production. As you might remember from our numerous reports on the company, Lupaka is currently focusing on generating cash flow before the end of this year by bringing the poly-metallic project in production.

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The achievements so far

Halfway May, Lupaka Gold announced it had started the mining activities as the company intended to mine a few hundred tonnes and ship those to the mill as a bulk sample. According to CFO Jones, approximately 300 tonnes have already been stockpiled at the mine site now, and another 300 tonnes has been mined inside the mine. This would suggest that the bulk sample could be upsized.

As said before, the ore will be trucked to an existing toll mill which is approximately 340 kilometers away from the Invicta mine. Lupaka has contracted a 180 tonnes per day mill which currently has approximately 100 tonnes per day of available capacity. That’s obviously less than the 350 tonnes per day Lupaka is eyeing to produce at Invicta but don’t forget that this is just the first step.

We are currently awaiting to see the assay results from the mined tonnage (Lupaka has sampled the ore before it will be sent to the mill). We wouldn’t be surprised to see the average grade of these tonnes to be a bit higher than the average 6.65 g/t AuEq that has been previously disclosed. Lupaka obviously cannot give a proper guidance so we’ll have to be patient and wait for the assay results.

The financing side

It’s not a secret that Lupaka Gold will need additional cash to fund the remaining capital expenditures at Invicta and to make sure it has approximately $2-2.5M in working capital to bridge the gap until concentrate sales revenue begins coming in. Lupaka’s management is obviously very reluctant to raise equity at the current share price, so it’s still looking to raise the necessary cash through either a debt issue or a streaming agreement. As the Invicta Gold Project is a poly-metallic mine it shouldn’t be too hard to find someone who’s willing to pre-pay for the delivery of, for instance, their projected copper production.

Right now, this might very well be what’s causing the downward movement and holding the share price back. The market knows Lupaka will need some more money to cover all capital expenditures and working capital requirements and some market participants are still betting on an equity raise, which is still unlikely and only a last resort.


Lupaka is currently upgrading the mine access road and should be trucking its bulk sample from the Invicta Gold Project to the mill by early July. We are eager to see the average grade of this bulk sample and we could expect Lupaka to see some cash inflow after processing 400 tonnes or more of ore. It won’t be huge (we’d expect something in the $100,000 region), but surely it will be a nice addition to the treasury.

Disclosure: Lupaka Gold is a sponsoring company. Please see our disclaimer for current positions.

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