IKN: Lupaka Gold Corp (LPK.to) and Dundee Securities

1/11/12

Lupaka Gold Corp (LPK.to) and Dundee Securities

Dundee is smarter than the average* brokerage and today is quicker off the mark than the average* Canadian house in identifying an interesting early-stage junior. This is the link that'll take you to the PDF report on Lupaka Gold Corp (LPK.to) and it's worth a read, too. Here's how the note starts and for full disclosure, your author is long this stock and it's also one we've pointed to in The IKN Weekly. Take it away, Dale Mah of Dundee:

Building Ounces Through Discovery
We are adding Lupaka Gold to our Mineral Exploration Watch List. Lupaka Gold currently trades at an Enterprise Value (EV) of approximately $42/oz based on its current 60% ownership of the 1.2 million ounce Crucero Gold Project in Peru. Since the initial NI43-101 compliant resource was completed in February 2011, the company has drilled over 7,000 metres and has expanded the mineralized envelope along strike and at depth. In our opinion, drill results indicate potential growth of 40% bringing the size of the A-1 zone to approximately 1.6 million ounces which remains open to the north and at depth.

Looking For Another A-1

The Crucero Project is located high up in the Peruvian Andes and to advance the project, Lupaka must be successful in establishing a multi-million ounce gold resource. The extent of mineralization of the main A-1 zone requires additional drilling but from the information available, the total size is not likely to exceed 1.8 million ounces. Fortunately, Crucero contains an additional ten anomalies (A-2 to A-11), many of which are similar in size and share geochemical and geophysical signatures as A-1.
A Robust Resource, Almost 1 g/t at the Lowest Cut-Off
Drilling to date has established several higher grade sections in excess of 9 g/t. Typical open pit resources use a lower cut-off grade of 0.3 g/t which increases tonnage but lowers overall grade. The A-1 resource inventory shows 760,000 ounces at 1.6 g/t using a 1.0 g/t cut-off. Even at the lowest 0.25 g/t cut-off, A-1 contains 1.3 million ounces of gold grading 0.94 g/t.